Credit Risk Management: A Guide to Sound Business Decisions Book

How to decide when to say "yes" to a credit applicant—without jeopardizing your reputation or your company's bottom line Deciding whether a credit applicant is ultimately creditworthy involves more than just poring over their financial statements—it takes the kind of advice only an experienced credit expert, like Hal Schaeffer, can give. A 28-year veteran of the credit screening process, Schaeffer outlines the nuts-and-bolts of assessing a credit applicant's financial health and ability to make good on a line of credit. In part one's clear, four-part "A, B, C, D" format CA is for Analysis," "B is for Building Essential Business Credit Information," "C is for Considering All Factors," and "D is for Decision"), the author examines a prospective borrower from every angle, using formulas, checklists of what to look for, and available outside information sources (from Dun & Bradstreet to the Internet) to get a genuine picture of an applicant's current finances and degree of credit risk. Also outlined are the financial, credit, and business factors that go into a "sound business credit decision" a guideline for consolidating facts to vindicate your decision, as well as a series of twelve chapter-length case studies (contained in part two). Discussion includes:Determining the cost and accuracy of financial informationIsolating information gaps in financial recordsThe actual costs (including total/partial loss of sale, insurance fees) and value (including future sales to the customer) to your company if credit is extendedThe exact nature of the sale—large (or small); one-time deal or continuous; the expected profit marginThe controls your company has over the customerComplete with twelve chapter-length real-world case studies of problems typically encountered (with detailed solutions), Credit Risk Management offers practical, no-nonsense advice on how to minimize the risks—and maximize the benefits—to you and your company when you finally say "yes" to an applicant.Read More