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Credit Risk Management: A Guide to Sound Business Decisions

H. A. Schaeffer, Jr
Chichester, UK: Wiley, 2000
288pp, ISBN: 978-0-471-35020-0

This book examines the steps leading to a sound business credit decision. It is divided into four main sections: analysis for creative credit management; building up essential business credit information; considering all factors that affect the business credit decision; and making a decision or recommendation. Detailed case studies are provided, illustrating common problems along with their solutions.

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Credit Risk Management: A Guide to Sound Business Decisions

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Price: $145.84

Product 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.

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