Quick Credit Management Healthcheck

 

How safely are you trading on credit terms?

Are your credit management policies and procedures enabling your business to grow securely, or jeopardising the survival of your company? Complete this quick credit management healthcheck to find out. It will only take you about 5 minutes. Please answer all the questions.

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When trading on credit terms, do you: Never Sometimes Always
Recruit specialist and experienced credit control staff
Set up an internal management information system
Grade your exposure to credit risk
Pay particular attention to new and fast-growing companies
Seek the advice of a credit insurer

When trading with a new customer, do you: Never Sometimes Always
Contact the customer to check payment practices
Establish clear trading terms and conditions of sale
Ensure the credit terms you agree are prudent
Ask for a credit limit from a credit insurer
Obtain a credit information report

When trading with an existing customer, do you: Never Sometimes Always
Invoice promptly, ensure details are complete and issue regular statements
Ask no later than the due date for money that is owed
Monitor their payment record
Review their credit limit at least twice a year
Have a credit insurance policy that covers the transaction

To keep yourself informed about your customer, do you: Never Sometimes Always
Contact them on a regular basis to maintain a good relationship
Talk to your sales department to seek their on-going advice
Speak regularly to the trade specialist at a credit insurer
Monitor the performance of the company and their sector in the press
Participate in a credit circle and/or trade association forum

When experiencing slow payment from a customer, do you: Never Sometimes Always
Enquire whether there is a dispute and if so defer payment on the transaction
Instigate a formal system to chase late payment
Instruct a debt collection agency
Review the customer's credit limit
Stop supplying the customer until the debt is cleared

When experiencing non-payment from a customer, do you: Never Sometimes Always
Establish a repayment plan if the customer's situation is likely to improve soon
Instruct a debt collection agency
Stop supplying the customer
If the company fails, establish a dialogue with the insolvency practitioner
Claim on a credit insurance policy

When you need an injection of cash, do you: Never Sometimes Always
Ask for a bank loan
Extend an overdraft facility
Negotiate early settlement discounts from suppliers
Use invoice discounting
Chase your debtors


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* Turnover (£)  
* Industry sector  
 
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