A Reference site for entrepreneurs looking for information about credit management.
Credit management
- What is the importance of optimised credit management ?.
- Why does a company decide to outsource credit management?
- How does CRiON optimise a credit assessment ?
- How does CRiON optimise a payment reminder procedure?
- What are the most important pitfalls when setting up the standards to measure the performance of your credit management?
- What is the optimal organisation form of credit management in a company with multiple subsidiaries?
- How can training in credit management be tailored to the needs of my company?
- Are the contributions of CRiON restricted to simple, one-time advice ?
- When setting up a client assessment system what do most companies frequently overlook?
What is the importance of optimised credit management ?.
Turnover can only become profit when your debtor has fully paid for your product or service. It is of outmost importance that payment takes place within the agreed upon time limit.
Your debtor paying later than agreed upon (or not paying at all), costs your company a lot of money. Consequently, it may be necessary to request payment or, in extreme cases, resort to legal debt collection.
A perfectly organised credit management contributes to a better assessment of your credit risks as well as to a better collection of your debts, increasing the efficiency of your company and its usable capital.
Why does a company decide to outsource credit management?
A company may be confronted with a temporary or a structural credit management problem.
A company can have a temporary problem like short-term payment delays, lack of personnel or lack of practical knowledge in the field of credit management. Companies in these situations can rely on CRiON’s credit managers. These managers will assess the credit risks, take on the debtors efficiently, guarantee the continuity of debt collection actions and critically screen debt collection in order to give additional advice.
When a thorough change in the organisation takes place, external help is often very necessary. Far reaching reorganisation measures and new implementation procedures can be optimally monitored by CRiON’s project managers. They help to streamline processes of change, minimize resistance and implement more efficient, more effective working methods.
How does CRiON optimise a credit assessment ?
CRiON first makes a thorough analysis of all open standing items taking into account sector and product specifications and fluctuations. By using the most appropriate information sources, credit assessments are brought up to date by CRiON’s experienced credit managers. From this perspective, your company’s staff can receive further training, propositions can be made and your company can slowly move to structural changes and IT applications. This concept also enables you to optimize your risk levels with certain groups of debtors so that your company can grow in safety.
How does CRiON optimise a payment reminder procedure?
After the analysis of the current procedure, adjustments are made depending on the nature, frequency and contents of the payment reminders. The judicial means of defence (property prerogative, sales conditions and order confirmations) are closely scrutinised. The payment reminder procedure is adapted to the specific rules and regulations of the debtors’ country. CRiON will further fine tune both the judicial and the and non judicial procedures.
What are the most important pitfalls when setting up the standards to measure the performance of your credit management?
The most common pitfalls are:
- Choice of the right indicators
- Benchmarking the competitors
- Equilibrium between financial and non financial indicators
- Use of consistent performance standards within a diversity of business units
- Taking into account the stakes of a diversity of shareholders
- Consistent use of standards across the globe
What is the optimal organisation form of credit management in a company with multiple subsidiaries?
When deciding whether or not to opt for centralisation or decentralisation of the credit management department within a company with subsidiaries, attention should be paid to the different elements and to the relative importance attributed to these elements. The choice of organisation form is company specific and dependent on the strategy and the priorities of a company.
How can training in credit management be tailored to the needs of my company?
By first conducting a personalised audit prior to the training, the CRiON auditor gains insight in the specific situation of your company, its needs and problems. The results of the audit are then used to develop a tailored training programme.
Are the contributions of CRiON restricted to simple, one-time advice ?
Certainly not. Consulting should also be resulting. If you wish we can put our recommendations into practical actions and training sessions.
When setting up a client assessment system what do most companies frequently overlook?
Most companies put forth a good amount of effort to set up their own assessment system.
Shareholders, management and staff are in the end very satisfied about a high performance system which enables them to detect possible new clients.
A one time score in the prospection phase is important but continuous assessment of the client’s score is even more important. As a prospective client turns into a real client the company acquires more background history about the client and additional parameters resulting from this information process should be taken into account in the score system.
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