Warning: Sagging credit indicators are likely to have a significant effect on procurement functions, experts say.

The Credit Manager’s monthly Index, a measurement that’s broadly accepted by businesses, hit a record low in October. The index is a compilation of economic impacts that influence credit and collection professionals.

“(It) revealed an increasing sense of doom among the participants, mirroring conditions in the rest of the economy,” one economist quoted in the report said, painting a grim picture.

As business conditions deteriorate, vendors and procurement pros will find it increasingly difficult to find credit.

“Perhaps most troubling though is the disruption in the financial markets which has severely curtailed the availability of credit,” the economist continued. “As a result, which credit managers are so clearly telling us, not only is the economy bad, but the credit situation is making it even worse.”

Your best bet?

Be prepared to work with the Credit department or your A/P department to negotiate more flexible terms for credit, to keep goods and/or services going out and coming in.

Also, check with vendors to see if there are any incentives for “playing ball” and making it easier for them.

The key to surviving these troubled times is flexibility. When given a choice, bending is the best strategy – to keep from breaking.

Tags: collection, credit, procurement