Topic: Credit / Working Capital Management

Subject: Frequency of Credit Reviews
Jaicky Tammam
Member: 2013
Posts:3
Submitted on 07-30-13 10:21 pm
Message:
I'm looking for some feedback regarding members experience with the frequency of customers credit reviews. For many years, our policy has been to require all customers with a credit limit above $1MM to have an annual review. Customers with lower credit limits have reviews that are less frequent depending on the country they are located in.
I have lost senior resources, and am not being allowed to hire replacements. I am exploring alternatives to the current policy in order to remain compliant with policy since at the moment, I am way behind on performing credit reviews, and non compliant with existing policy.

I would appreciate any thoughts
 
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Replies
Greg Stoch
Member: 2013
Posts: 11

Subject: Re:Frequency of Credit Reviews

Submitted on 08-13-13 9:45 am.
Message:
If you're not able to backfill staff whose responsibility it was to review history on your customer base, that certainly puts you in a bind (no, you can't spend money on staff but you'll get in trouble if you don't get done what was done before with a larger staff...).

Have you considered, or can you consider, using tools of external resources that gather credit risk information for all companies? A company I was considering for similar functions in the past can be found at http://www.agilisinternational.com/ They can perform a monthly review of companies' paying history, credit risk, banking activities (if I recall correctly), and can combine all these data into a "risk score" for you. There are other companies that do similar work, so you might look into that option. As it becomes a contract resource, it's easier to shut it off if it doesn't work that it would be to lay off staff if you had hired them.

 
John Anderson
Member: 2003
Posts: 2

Subject: Re:Frequency of Credit Reviews

Submitted on 09-16-13 5:12 pm.
Message:
Were you able to rectify this situation?
If not, I will respond with a couple of suggestions.
 
Jaicky Tammam
Member: 2013
Posts: 3

Subject: Re:Frequency of Credit Reviews

Submitted on 09-16-13 8:06 pm.
Message:
I think we may have solved the issue, but I'm open to suggestions
 
Bob Randall
Member: 2010
Posts: 1

Subject: Re:Frequency of Credit Reviews

Submitted on 09-17-13 12:20 pm.
Message:
Since adding h/c is not an viable option and not knowing your "budget" to address this issue, perhaps you can arrange to secure the needed financial information and/or data points to assess the "risk" from a third party? What about Credit Risk Monitor (CRM), or Global Credit Service, I have subscribed to their services in the past and they were both very useful.

Another resource to consider is contacting Credit Research Foundation (CRF) - their web site is, www.crfonline.org. Perhaps they can provide other options, other than hiring additional "bodies" to review the credit file and be assured you are extending the right level of trade credit while mitigating any known risks.
 
Jaicky Tammam
Member: 2013
Posts: 3

Subject: Re:Frequency of Credit Reviews

Submitted on 09-17-13 3:55 pm.
Message:
I already use Credit Risk Monitor, D&B, Credit Reform in Europe. My issue is getting to perform the reviews by their due date in order to comply with policy. I think we're just just going to add a discretionary period to the review date, so that as long as the review is done within 3 months of the due date, its in compliance with policy.
 
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