To ascertain where the department is and where it should be.  Important indicators are:

• Budgets
• Costs to collect – normal debtors’ book as well as legal
• Bad debt as a percentage to turnover
• Setting appropriate bad debt provision amounts
• Query turnaround times
• Tests of control – to ensure no loss of income
• An analysis of credit notes to assess reasons for loss to implement processes to avoid losses
• Setting and testing authority levels
• Aligning the business with the goals and strategy of the company
• Credit granting methodology – is the business loosing prospective clients due to lack of knowledge with regards to risk mitigation and customer management?
• SWOT Analysis: allows for understanding:
• The environment and industry of the company and whether the debtors department supports the environment
• The economic landscape
• Competitor Activity
• Quality of Data
• Skill set of staff
• Ensuring great reporting to sales team to provide an open platform with regards to non-paying accounts as well as opportunities to sell
• Trends analysis
• Time and motion study to ascertain capacity required
• Tests of quality of documentation such as credit applications

• Free cash flow
• Low costs to collect
• Bad debt as a percentage to turnover
• Setting bad debt provision
• Setting credit note provision
• Satisfied internal and external customers
• Customer retention
• Dso results
• Low overdue percentages
• Qualified and well-trained customer centric staff
• Develop relationships with customers and stakeholders
• Monitoring performance against the targets and budgets
• Percentage of bad debt write off as to turnover

• Stakeholder confidence increases
• Good corporate governance practises are adopted
• Internal controls are implemented, tested and/or reviewed
• Cash collections Improve
• Sustainability of the organization increases
• Cost of capital is lowered
• Customer confidence and service increase
• A happy and successful sales team – we are on the same team achieving the same goals
• No hostility between the various departments in the organization due to positive team work and information sharing
• Maximization of investors return
• Bad debt write-offs are reduced – increasing profit
• Avoids reputational risk
• Reduces the risk of financial “surprises”
• Improves the deployment of capital

• Maximisation of revenue
• Lessens the risk of internal fraud – prevention of risk
• The enhancement of credibility of the department which translates to the rest of the company
• Segregation of duties
• Ensuring that the customers processes are followed
• Levels of responsibility and accountability
• Audit confidence
• Management trails and reporting
• Legal compliance and the subsequent protection of Directors in their personal capacities in terms of the Companies Act.

• Aligns risks and the company’s vision and goals
• Influences behaviour and guides orientation
• Balances the need for managerial risk taking
• Stakeholders become relevant to corporate decision makers
• Effective accountability
• Discipline
• Transparency
• Fairness
• Greater possibility of access to capital

• Provide training and guidance to the relevant stakeholders on credit related decisions, risks and opportunities.
• Advise stakeholders on the process of credit granting and the importance of understanding the customer’s business in order to allow for the correct structure of the deal that is in line with the risk appetite of the organization.
• Promote a culture of credit risk management with all the relevant stakeholder by optimizing and streamlining processes and turnaround time and  communication.

• Credit Risk Management / Analysis of current processes
• Process Mapping
• Risk Assessment
• Cash collection
• Pre-legal and legal portfolio management
• Development of BSC to align departments goals to the company strategy
• On-site training and staff assessment
• Credit Risk Governance
• High Level Credit Reports
• Internal Controls assessment and development
• Working collaboratively with the sales teams to grow healthy business
• Customer centric approach creates lasting relationships

• The credit risk department will actively provide to the sales team insight into their client’s operating environment, competitors, threats and opportunities which enhances identification of up selling opportunities and revenue retention.
• Sectoral analysis provides insight into the industry drivers affecting target markets and new opportunities;
• Use client peer group information to expand market share in industries where one already has a presence;
• Identify groups as markets for cross selling opportunities
• Identify marketing opportunities through cross ownerships and/or ross directorships;
• Alerts keep clients abreast of client activity and acts as triggers
• Use strategic sales information  such as year-end profits, changes in ownership and structure of management changes etc., to identify new targets