Important Elements for Comprehensive Credit Risk Management
DEC 7 2021 09:38:19
The economy is bouncing back and as retailers flock to replenish inventory it remains important to assess your dealer’s creditworthiness. With supply chain issues many distributors are experiencing, it becomes crucial to evaluate your dealer to ensure that your product is ending up with the right customer.
Here are several important elements to ensure comprehensive credit risk management.
Customer onboarding is an essential part of the process. It allows you to correctly estimate potential business a new dealer can generate for your company and whether they are worthy of the risk. Due diligence is too often traded in for a rushed onboarding process.
Completed credit applications, detailed terms & conditions, MAP agreements, on-line sales agreements all help make the onboarding process more effective while eliminating a lot of the bottlenecks.
Know Your Customer
Who are you dealing with? It is very practical to get an in-depth profile of your dealer and gather all the relevant information before agreeing to extend terms. Have a template of questions about their background, business plan, and financing before consummating the relationship.
SICA credit reports can reduce the time and effort in evaluating the creditworthiness without the fuss. With industry specific data on over 50,000 retailers in North America, SICA’s reports cut to the chase in assisting you with your credit decisions.
In today’s economy, the decision process needs to be sped up in order to keep up with increasing demand. Accelerated, automated processes, like SICA’s Integrative API are the most effective means to accelerate credit decisions while still ensuring that detailed data is processed and incorporated in the decision to reduce the chance of Bad Debt. Moving away from manual, reactive credit management, in favor of automation that is proactive in nature is key.
Monitor Trends With Industry Suppliers
Keeping tabs on trends and developments in the industry will heighten your credit risk assessment tenfold. Early risk identification is key and networking with your industry peers by attending Credit Industry Meetings is crucial.
For the past 40 years, the Sports Industry Credit Association (SICA) has been a leading provider of credit information for the sporting goods, outdoor and footwear retail industries. We support and service North American credit departments with highly effective tools and cutting-edge functionalities to make sure your business has the assistance and protection it needs to succeed. Contact us to learn more about how a SICA membership can add value to your business.