Accounts Receivable Management......what's more important: Credit or Collections?

When I was the Credit Manager for an instrument manufacturer,  we tended to favor Credit

Analysis systems/processes vs Collections  systems/processes. Later on, when I was heading

Accounts Receivable Management for a software company, it was vice versa.

 

The questions is...what's more important?  What's better for your career? Credit....or.....Collections?

 

Well....I think it may depend on the costs involved in creating the product you're selling.

Heavy duty manufacturing involves significant up front  and on going costs to create the product.

On the other hand, software costs are mostly during the early development stages, then taper off as the software matures.

 

So, in my experiences, there's a tendency to be more conservative, in granting credit to "harder core" manufacturing customers vs software customers.   Conversely,  in software companies, there is greater emphasis on collections vs credit.

 

At least...that's my theorem.  Anyone out there in disagreement or agreement?   One thing for sure,

collections software is still needed to complete the circle of accounts receivable management. If you

granted credit too easily (and who hasn't?) you need to get your money sooner vs. later.   Lowering

DSO and improving Accounts Receivable Collections never hurt anyone's career, regardless of industry.