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Assessing and minimising the credit risk

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Assessing and minimising the credit risk

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  1. Assessing and minimising the credit risk

  2. The Plan • The most common mistakes done by companies admitting the credit limits and ways to avoid this. • How to evaluate the risk of your client’s portfolio? • Costs and benefits. Współpraca z Dun & Bradstreet

  3. The most common mistakes and solutions Solutions • No credit limits in the absence of sufficient data • Regular (annual) status check • All credit limits decisions should be centralised within finance function, but collaborating with sales • The information is the foundation to trade and risk limiting. Mistakes • Casual setting of credit limits. • No updates of the knowledge about clients • The lack of clear lines of authority between sales and financial department • Over reliance on collateral Współpraca z Dun & Bradstreet

  4. Categorisation - what to do next High risk companies Low Risk companies What we do next? What we do next ? Check in 6 months Set the credit limit Conservative credit limit Non - standard solutions in „hard”cases Check once in year Credit Limit based on collateral Współpraca z Dun & Bradstreet