Controlling long term credit risk
Article Abstract:
A list is presented of financial risk measurement and protection techniques for long term contracts. Risk assessment resources include: Dun and Bradstreet reports, the prospect's own financial statements, and SEC filings. Talks with the prospect's financial officers and associated banks can be helpful, as well as discussions with industry experts or brokerage houses. One can also consult with advisory services such as Value Line and Moody's or talk to key managers within the prospect's company. Defensive measures should be written into the contract, including signing with the 'strongest balance sheet' and obtaining parent or cross-corporate guarantees; requiring annual financial statements, as well as a credit impairment clause; insisting on short payment terms; allowing creative payment methods with late payment provisions; and using standby letters of credit or payment bonds, if necessary.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1987
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Accelerating collections: automated receivables system
Article Abstract:
Despite statistics that show accounts receivable comprise more than a third of U.S. corporate assets, most companies have not automated their credit and accounts receivable functions, which could speed collections and improve cash flow. Automation can reduce days' sales outstanding, and cut clerical expenses related to account collections while improving customer payment histories.Online receivables systems are analyzed by example; the case study used is the automation efforts at Air Products and Chemicals Inc.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1986
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Sales-credit teamwork
Article Abstract:
Credit and sales managers should work together to ensure prompt collection of accounts receivable. Nonetheless, it is common that cooperation is low or nonexistent. Both departments should work together to implement the management suggestions in this article. Any new strategy has to be gradual in order not to disrupt the functioning of the two departments.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1986
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