What aspects should I build in our credit policy?

a)Mission b)Objectives c)Duties Do credit research to collect, assess information of customers, Maintain and update credit information system Supervise potential problematic customers Approve and adjust customers’ credit Approve orders Handle feedback information Respond credit investigation organizations, creditors and banks Check ages of receivables Collect receivables, confirm overdue receivables, push payment and follow up Handle customers’ […]

How can I do analysis on financial statements?

You need to focus on the following aspects. a)     Profit fluctuation as compared to prior years b)     Relationships between the compensation to board of directors and sales or profits c)     Management discussion and analysis in their annual report d)     Non-operating items e)     Other irregularities such as qualified auditors’ opinion, significant items in financial statement not in line with […]

How can I conduct a credit research?

You may collect information from the sources as follows. a)the customer to whom you shall grant credit b)industry association or trade promotion committee c)stock exchange d)Administration of Industry & Commerce e)bank f)related government bodies g)customer’s customer h)publications i)a professional firm

What objectives can I achieve with credit reports?

a)       Control and avoidance of credit risks b)       Improvement of financial management c)       Preparation of marketing and promotion strategies d)       Optimisation of purchase management e)       Establishment of credit system f)         Preparation of corporate strategy

Under what circumstances a credit research should be conducted?

New customer: investigation should be carried out when credit to this customer is granted. You should not only rely on the information provided by the customer. Periodical investigation: as we are doing business in fast changing environment, periodically credit research is necessary in order to update customer’s information and maintain sound credit management. Increase of credit transaction […]

How many types of credit report are there?

a)       In-depth Analysis Report is to provide deep analysis and insights on target’s finance, production and business performance. b)       Business Credit Report is to provide general credit information and comments the target. c)       Financial Report is to provide financial information of a target. d)       Registration Report is to provide registration data of a target. e)       […]

What aspects should be covered by a good credit research?

a)Operation and management information Company’s registration information – business license, tax registration certificate, factory registration certificate and operation permit for special industries; history of the company; Associates; Present top management – personal information, organization structures, major shareholders; Equipment status – location, equipments and tools, environment protection, employees training, quality management system and R&D ability; and […]

How to setup a credit management procedure?

a)Screening customer’s basic information in a fast and effective way can help to decide whether credit can be granted and whether it deserves to investigate further. A grading system can be used to calculate financial ratios to evaluate customers’financial status or payment ability. b)Credit research is to through various channels investigate the customer’s history (generally for 3years), the […]

What are the objectives of credit management?

a)       Increase sales b)       Control accounts receivable c)       Control department overhead d)       Reduce collection cost and bad debt e)       Develop credit and collection policies f)         Provide supervision and training for credit staff g)       Coordinate with other departments h)       Maintain good relationships with customers