The One Business Credit Risk Management Strategy You Should Be Using in 2017
Most of us spend some time on goal setting before the start of a New Year.
In that spirit, we were reading management guru Dorie Clark’s ideas on how to be more productive. One sentence jumped off the page:
“I think a lot of people get goal setting wrong. We try to pile on too much, confusing our goals (big picture ambitions) with our to-do lists. And we sometimes stick stubbornly to priorities that no longer make sense. Instead of the push for more, I actually believe we need less - fewer areas of focus, because if we push hard on them, other things will fall into place.”
Hmmm. Focusing on less to accomplish more?
Given the demands on a credit professional’s time and resources, one priority appears on many lists: using technology to streamline the credit management process.
So today, our first blog of the year will show you an easier way to ‘connect the dots’ between your receivables data and customer risk, to boost your effectiveness and productivity.
How To Be More Productive
The basic idea of using the Trade Contributor Program to be more productive, is to focus your efforts, by homing in on your highest-risk customers.
You see, your receivables data is useful on it’s own, but by itself, it’s isolated.
But by cross-matching your A/R data with others’ trade files and to our FRISK® score - a 96% reliable risk model for public company financial risk – your data becomes much more powerful.
Fresh insights from combining both sets of data allow you to target receivables dollars at greatest risk, and intervene when growing risk still has the greatest potential impact on your company. In this way, your credit management efforts can have the greatest payoff.
Make Your A/R Data Count
Credit managers tell us all the time how getting focused, timesaving insights from their receivables data helps.
For instance, the credit manager of a leading international pharmaceutical firm says:
“By sending my trade files to CreditRiskMonitor, I am able to get a much better picture of how our customers are performing… Excellent information that is right at our fingertips without us having to spend hours of analysis to obtain!”
By focusing your time where you can get the biggest return on your efforts, you can get more done, with greater impact, in less time.
Would Macy’s Tell Gimbels?
One of our favorite movies of the season – 'Miracle on 34th Street' – dramatizes the competition between two retail giants. That’s Hollywood for you.
In the real world, credit managers are well familiar with reducing risk via the collective sharing of information. That’s what trade groups are for!
(By the way, there’s a new international credit best practices group forming this month. In case you hadn’t seen CMA President Mike Mitchell’s letter last month, here’s the link: Join CMA's New International Credit Best Practices Group)
Our Trade Contributor Program simply takes information-sharing to the next level, using technology to generate fresh insights about your receivables risk.
This Time, Next Year …
We’ve described how this program works, both for CreditRiskMonitor subscribers, as well as non-subscribers (who also get access to a free set of reports), many times. You can read the details here, here and here … no sense repeating the details again.
We’ll just leave you with one final thought.
Imagine: Simply by using technology to focus and execute on your riskiest credit accounts, your productivity will improve. And by next year at this time, with this one process change, your team will have become more productive and effective … your CFO will be singing your praises … and you’ll be much less stressed!
As we embark on a new year, that’s a goal worth setting, and keeping!
Learn how to save time, and become more productive, by leveraging your A/R data.
CreditRiskMonitor is a financial news and analysis service designed to help professionals stay ahead of public company risk quickly, accurately and cost-effectively. More than 35% of the Fortune 1000, plus thousands more worldwide, rely on our commercial credit reporting and predictive risk analytics for assessing the financial stability of more than 56,000 global public companies.
At the core of CreditRiskMonitor’s service is its 96%-accurate FRISK® score, which is formulated to predict public company bankruptcy risk. One of four key components calculated in the FRISK® score is crowdsourced subscriber activity. This unique system tracks subscribers' patterns of research activity, capturing and aggregating the real-time concerns of what are essentially the key gatekeepers of corporate credit. Other features of CreditRiskMonitor’s service include timely news alerts, the Altman Z”-Score, agency ratings, financial ratios and trends. CreditRiskMonitor’s network of trade contributors provides more than $150 billion in trade data on their counterparties every month, giving them visibility into their biggest dollar risks.