Getting caught off-guard by Bankruptcies

Most credit professionals fail to recognise that customer bankruptcy can be predicted. Bankruptcy is an extremely devastating experience not only for the owners and employees of the bankrupt company, but also for the credit professionals that extended terms to that business.

Both bankruptcy and severely slow payments can be identified through the use of credit and customer scoring.

A business failure or slow payments can happen for a wide variety of reasons, but what we really need to know is how to predict a majority of bankruptcy filings. Statistically valid predictive scores can assist you to uncover the risk within your portfolio. Scoring is used extensively in the consumer market, and many credit professionals in the commercial segment should take advantage to more clearly identify their higher risk accounts.

Look at Credit Management Software that gives you functionality to credit score your customers. Based upon this information the system will have the future looking scores, which will be designed to predict both the potential for financial stress and severe payment delinquency. These statistically valid predictive scores incorporate multiple data sets and can be even more predictive when it comes to bankruptcy.

By using credit scoring it will clearly identify your lower and high-risk accounts by segmenting your portfolio and making it much easier to better concentrate limited resources.

By giving all your customers some type of ranking system with a credit score, you will more easily identify and prioritise the accounts requiring more or less aggressive collection techniques. Allign your most experienced credit controllers with the highest risk accounts, change contract terms if needed or even exit a relationship where appropriate.

With the efficiency gains that will be realized, you can then spend more time with marginal accounts. By using scores and portfolio analysis techniques, credit professionals can assure a more consistent and systematic approach to receivables management.

Need saving from Bord Snip?

We’re all going to feel the pinch from Bord Snip with proposed cuts of €5.3 billion and 17,000 potential jobs losses.

We are working with companies who seek to improve the performance of their business through the application of technology. By focusing on solutions across all major organisational areas we help them to:

• Increase revenues and profits
• Control and reduce costs
• Improve efficiencies
• Achieve better value from information
• Better manage performance of overall business down to individuals
• Improve planning achieve better returns on assets and resources

 Organisations are finding that purchasing procedures are basic and inconsistent, with few controls built into their systems, therefore they are not getting value for money.

Managing your workflow, improving control of delegations, directing people to preferred suppliers and providing more information about what you are purchasing is vital to your requisitioning and purchasing.

The requirement to closely review and manage the puchasing process as part of an implementation process project provides benefits in itself.

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