October 2016 Credit Management magazine

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In uncertain times it’s good to be in the know Wherever you trade, the risk of non-payment is always present. Whether it’s a customer becoming insolvent, a protracted payment default, less stable economic environments or political interference, Atradius trade credit insurance can protect your business from financial loss with a reputation for service that is second to none. Everyone in our team, which includes specialist underwriters and customer service experts, as well as our worldwide professional broker network, is focused solely on helping our customers achieve the success they deserve and looking after their best interests. Whether you need advice in the UK from our dedicated regional hubs or specialised ‘on the ground’ service from any of our network of offices across the globe, we’re always only a mouse click or a phone call away. Expert underwriting teams worldwide making informed and robust decisions Fast reliable credit limit service Atradius Collections service – included in your policy Highly experienced claims team committed to maintaining your cash flow For more information please call us on 0800 21 21 31 or email us at cmc@atradius.com www.atradius.co.uk 40 October 2016 www.cicm.com The recognised standard
ADVERTORIAL IS THE CREDITWORLD REINVENTING ITSELF? A buyer for a Danish electronics manufacturer wants to place a very big bulk order of silicon chips with you. She suggests that it’s likely to lead to a lot of repeat business but she wants three-month terms for the full value of the order on receipt of the full delivery. Your company has also been in negotiations with a buyer at a firm in the same sector in Spain, who asks for similar terms for a similar deal. In an ideal world, you’d of course do business with both manufacturers – and maybe you will in due course – but you need to prioritise the orders and decide on how tough a line to take in your credit negotiations, as you’ve got your own supply chain to worry about, existing customers’ orders to fulfil, and a delicately balanced cash-flow to protect. You’ve never sold to either company before, so presumably one of your first steps would be to assess their creditworthiness via external sources. But how? You have access to data from a number of online credit specialists, including one that caters for the Nordic region and another that focuses on Iberia. At face value, the Danish company seems the far safer bet. Its credit score is significantly stronger and, after a bit more due diligence, you conclude that, in short, it carries less risk. So you make a decision on how best to approach the two potential orders and who to prioritise. But did you make the most informed decision? Did you actually have the most complete and consistent risk picture? Were you in reality comparing like for like? Context is everything and times are changing. KNOCK-ON EFFECTS In fact there’s mounting evidence to suggest that the credit world has gone through a recent and rapid period of reinvention. The global credit crunch of 2008 didn’t just reinforce and enhance the rules in the (now) highly-regulated banking sector. Coupled with changes in technology, it had a knock-on effect on the rules and best practice in all sectors that deal with credit. We’ve also started to see a shift in the variety of personnel who assess credit and make decisions around it, and the motivation for risk assessment. According to Sander Desmet, a risk Product Director at Bureau van Dijk: ‘‘we’ve moved from a purely reactive ‘on report’ attitude to a proactive ‘on portfolio’ attitude’’ and he notes that credit managers are gradually changing from being account-type people who specialise in financial analysis to those with a more diverse set of skills. ESTABLISHING CONTEXT We’ve produced a white paper that addresses these issues. Solutions-focused, we have experience of dealing with customers who need reliable company information for credit and general risk, and we deliver metrics that are easy to interpret, evidence-based, transparent and – crucially – standardised across geographies for meaningful comparisons. We’ve seen a hugely increased appetite for greater transparency over the years, with clients eager to put the days of black box credit scoring behind them. In the scenario outlined at the start of this article, while location and industry would have indirectly contributed to these companies’ credit scores, what the people behind the credit scores might not have done was apply weightings for geographical and sector context, which could have given a very different picture of the two companies. Had they done so, their scores would have taken into account key weighted factors such as the variations in corporation tax and localised sector averages that affect or put into a localised context the two companies’ profitability ratios, ratios being one of the main determiners of credit score. These are factors that we believe must be taken into account when looking for a complete picture. You can get your free copy of this white paper at bvdinfo.com/whitepaper/credit1 And we offer free trials of our company information products for credit risk management. Start your free trial at bvdinfo. com/creditrisk We’ve moved from a purely reactive ‘on report’ attitude to a proactive ‘on portfolio’ attitude, and credit managers are gradually changing from being account-type people who specialise in financial analysis, to those with a more diverse set of skills’. Sander Desmet, a risk Product Director at Bureau van Dijk. The recognised standard www.cicm.com October 2016 41
Page 1 and 2: CREDIT MANAGEMENT CM OCTOBER 2016
Page 3 and 4: CONTENTS OCTOBER 2016 www.cicm.com
Page 5 and 6: DO NOT MISS OUT! in association wit
Page 7 and 8: CICM NEWS DEBT CASTS SHADOW OVER YO
Page 9 and 10: FORGOTTEN CHEQUES COST COMPANIES DE
Page 11 and 12: DO YOU KNOW THETRUE IDENTITYOFYOUR
Page 13 and 14: RE-ACCREDITATION FOR FORTUNE 500 FI
Page 15 and 16: OPINION PASSING THE BATON Bryony Pe
Page 17 and 18: Beyond worldclass as standard... 35
Page 19 and 20: FEATURE SPECIAL Meanwhile, FFA’s
Page 21 and 22: The recognised standard www.cicm.co
Page 23 and 24: FEATURE SPECIAL is a mutual scheme
Page 25 and 26: Shortlisted for the CICM award for
Page 27 and 28: FEATURE SPECIAL THE SHIP SETS SAIL
Page 29 and 30: TRADE TALK OLD PROBLEMS, NEW TRICKS
Page 31 and 32: ONE FOR THE ROAD THE June EU refere
Page 33 and 34: Customs law involves a tariff (aver
Page 35 and 36: DOES YOUR TRADE CREDIT BROKER STAND
Page 37 and 38: With so much uncertainty in so many
Page 39: continued from page 38 > in 2012; a
Page 43 and 44: Sector Sector Region Getting Better
Page 45 and 46: It is not always appropriate to hit
Page 47 and 48: ‘‘ CICM CICM has signed up it
Page 49 and 50: NEW CICM MEMBERS THE INSTITUTE WELC
Page 51 and 52: The recognised standard For further
Page 53 and 54: If you need to find someone and if
Page 55 and 56: EAST MIDLANDS BRANCH CASTLE ROCK BR
Page 57 and 58: SENIOR REVENUE ANALYST DRIVE BUSINE
Page 59 and 60: Cr£ditWho? CICM Directory of Servi
Page 61 and 62: Cr£ditWho? CICM Directory of Servi
Page 63 and 64: CREDIT MANAGEMENT CM MONTHLY PRIZE

October 2016 Credit Management magazine

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