what credit management tools are available to the credit manager?
Suppliers that deliver goods and/or services on credit will have to manage this credit risk to ensure that payment is received on time. Several tools come to the aid of today's credit manager. These can be used as additional security to existing credit management procedures. If no procedures are in place, these tools can assist in setting these up.
One of the most important credit management tools is reliable up to date buyer information. A supplier only sees one side of his buyer. Independent information is essential for efficient credit management.
A buyer may be sound, but the country he is in may be experiencing problems. Country reports detect trends and alert exporters before serious problems arise in a particular country.
Suppliers need to manage their outstanding receivables. This can be done through complex financial solutions. Alternatively companies can insure against bad debts through a Receivables Insurance policy, obtain detailed market intelligence, implement ledger management, factor, or seek professional help in recovering debts.
Pro-active debt collection procedure has a high success rate. A buyer may be in difficulty, but the supplier can still control payments, provided professional debt collection procedures are in place. Most Receivables Insurance companies either offer debt collection services, or have partnered with specialised collections firms.
By transferring receivables, this financial technique makes it possible for companies to fund all or some of their invoices and thus cover their operating capital requirements; obtain cover against their customers' insolvency; obtain payment of receivables with shorter payment terms; obtain information on their customers' financial soundness; outsource or vary their administrative expenses; and optimize current assets and liabilities.