Credit Risk Management: A Guide to Sound Business Decisions by H.A. Schaeffer (E

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This book provides the necessary information to properly analyse a credit applicant's financial data, collect other necessary information not provided, consider all the factors that will impact the business decision, and decide whether to recommend that credit is offered.

FORMATHardcover LANGUAGEEnglish CONDITIONBrand New Publisher Description

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 (A 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 information* Isolating information gaps in financial records* The actual costs (including total/partial loss of sale, insurance fees) and value (including future sales to the customer) to your company if credit is extended* The exact nature of the sale-large (or small); one-time deal or continuous; the expected profit margin* The 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.

Back Cover

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 (A 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 information * Isolating information gaps in financial records * The actual costs (including total/partial loss of sale, insurance fees) and value (including future sales to the customer) to your company if credit is extended * The exact nature of the sale-large (or small); one-time deal or continuous; the expected profit margin * The controls your company has over the customer Complete 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.

Flap

Requiring the skills of a diplomat, the insight of a psychologist, and the bottomline realism of a CEO, a credit professional has the unenviable task of judging an applicant’s ability to fulfill a credit obligation. The art of determining which prospects are good credit risks is also a nuts-and-bolts financial discipline involving techniques for gathering credit information and assuring its accuracy as well as analyzing and making sense of all the data—ending with a final "yes" or "no." Developed from courses taught at the American Management Association, one of the nation’s leading educational organizations, by a 28-year veteran of credit risk assessment, Credit Risk Management is a detailed examination of the entire process of determining the creditworthiness of a prospective borrower and outlines exactly how credit assessments are made. Equal parts realistic analysis and cautionary advice, part one is arranged in an "A, B, C, D" format ("A is for Analysis," "B is for Building Essential Business Credit Information," "C is for Considering All Factors," and "D is for Decision"); while part two is composed of twelve chapter-length real-world case studies, each illustrating (with solutions) commonly encountered problems. The book offers detailed, step-by-step guidance, using a variety of analytical approaches, for helping you assess an applicant’s financial status and degree of credit risk:Techniques for obtaining financial data, while controlling the cost of acquiring itCommon-size analysis—for comparing firms of different sizes to see how successful they areTrend analysis—for comparing financial statements from the present year to previous yearsHow to calculate ratios for inventory turnover, accounts payable turnover, gross profit margin, return on investmentKey sources of current business and credit information—including Dun & Bradstreet, Experian, Graydon America, the InternetDetermining the cost-effectiveness of informationAlso provided is a checklist of financial, credit, and business factors to consider when forming a "sound business credit decision" (including size of the sale, profit margin on sale, your company’s level of control over the customer, and other possible costs and value to the company if credit is extended). The book arms you with anticipated best/worst case scenarios (including successfully dealing with customer counteroffers), ways of isolating information gaps, and a guideline for consolidating facts to vindicate your decision. And once you’ve arrived at a credit decision that is high in value and cost-effective, the book shows you how to eliminate any loopholes in your recommendation to management that might lead to rejection. The only resource a credit professional needs to perform a detailed analysis of a credit applicant, Credit Risk Management offers detailed, practical, real-world guidance on making a decision that will benefit your company’s bottom line—and financial future.

Author Biography

H. A. SCHAEFFER Jr., CCE, CEW, is President of D&H Credit Services, Inc., a credit and financial customer service consulting firm to all sizes of manufacturers, wholesalers, government agencies, and credit organizations located in Port Washington, N.Y. He has served as a credit consultant for a number of midsize companies as well as Fortune 500 companies, including Bausch & Lomb and Mobil, Inc. He has taught credit courses for the American Management Association (AMA), the National Association of Credit Management (NACM), and Dun & Bradstreet. He has also taught customized courses for Fortune 500 companies and noncredit organizations.

Table of Contents

STEPS FOR A SOUND BUSINESS CREDIT DECISION.A Is for Analysis for Creative Credit Management.B Is for Building Essential Business Credit Information.C Is for Considering All Factors That Impact the Business Credit Decision.D Is for Decision (or Recommendation).CASE STUDIES.Case Study 1: Sure Progress, Inc: Creative Alternatives to the Direct Extension of Credit.Case Study 2: International Exports, Inc: Creative Methods to Reestablish Open Account Credit with a Former Problem Customer.Case Study 3: Special Materials, Inc: Business Issues and Costs That Effect a Sound Business Credit Decision.Case Study 4: Fast Action Suppliers, Inc: Preserving a Company's Reputation That is Tarnished by a Customer's Slow Paying Practices.Case Study 5: True Delivery Seals, Inc: Minimizing Exposure to Loss Due to the Cancellation of a Distributor Contract.Case Study 6: First Choice Company, Inc: Dealing with a Last-Minute Credit Decision.Case Study 7: Perfect Image Suppliers, Inc: Addressing a Customer with an Overbearing Attitude.Case Study 8: Basic Needs, Inc: Considering Increased Credit Limits for Existing Customers.Case Study 9: Drugs "R" Us Products, Inc: Addressing a Customer's "Shady" Past.Case Study 10: Freezy Refrigerator Repair Co: Addressing the Problems with the Sale of a Service.Case Study 11: Terra Technology, Inc. The Risk of a Custom Order Sale.Case Study 12: Compania Swift, Inc. The Sale of Goods to Foreign Customers.Index.

Review

"I recommend it to credit professionals who want to move from the back office to the front office" (Credit Focus, Summer 2007)

Long Description

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 (A 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 information ∗ Isolating information gaps in financial records ∗ The actual costs (including total/partial loss of sale, insurance fees) and value (including future sales to the customer) to your company if credit is extended ∗ The exact nature of the sale-large (or small); one-time deal or continuous; the expected profit margin ∗ The controls your company has over the customer Complete 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.

Review Text

"I recommend it to credit professionals who want to move from the back office to the front office" (Credit Focus, Summer 2007)

Review Quote

"I recommend it to credit professionals who want to move from the back office to the front office" ( Credit Focus , Summer 2007)

Promotional "Headline"

"I recommend it to credit professionals who want to move from the back office to the front office" (Credit Focus, Summer 2007)

Feature

The book offers credit managers and executives the necessary tools to make sound credit decisions through an in-depth look at twelve real-life cases worked by the author. Lays a foundation for setting up corporate credit policies. Covers all phases of the credit authorization procedure.

Details ISBN0471350206 Short Title CREDIT RISK MGMT Pages 280 Language English ISBN-10 0471350206 ISBN-13 9780471350200 Media Book Format Hardcover DEWEY 658.88 Illustrations Yes Year 2000 Imprint John Wiley & Sons Inc Subtitle A Guide to Sound Business Decisions Place of Publication New York Country of Publication United States Edition 1st DOI 10.1604/9780471350200 UK Release Date 2000-02-08 AU Release Date 2000-01-12 NZ Release Date 2000-01-12 Author H.A. Schaeffer Publisher John Wiley & Sons Inc Publication Date 2000-02-08 Audience Professional & Vocational US Release Date 2000-02-08 We've got this

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