- 1. Scott Tillesen Director of Credit, SMB Accounts
SMBAccessCredit Services Presentation
2. August 22, 2006 Agenda 1. Tech Data Credit Philosophy 2. How
to Use Credit Relationships and Financing Alternatives
forProfitable Growth 3. Tech Data Credit Philosophy 4.
- To support the sale of products to our customers.
- To utilize a wide variety of financing options and provide
guidance that is beneficial to our customers.
- To operate within an acceptable range of expense and
investment.
Tech Data Credit Philosophy 5. How to Use Credit Relationships
and Financing Alternatives for Profitable Growth 6.
- Maximize natural resources
- Utilize financing options
- Live to fight another day
Attributes of Credit Survivors 7.
- Determine profitable minimize order size
- Avoid inventory through outsourcing
- Aggregate for improved pricing
- Assess the hidden costs in the lowest price
- Reevaluate your specialty
Scrutinize Purchasing 8.
- Determine your business risk appetite
- Plan for sales, asset,andfinancing growth
- Know your trade debt limitations
- Determine your bank debt limitations
- Quantify and qualify equity sources
- Un-bundle the value you deliver to your customers
Maximize Natural Resources 9.
- Youve done your part remind them it istime to do theirs
- Have a strong credit application
- Develop a route of escalation
- Outsource what you cant effectively handleinternally
- Know when to pull the trigger
Torment Debtors 10. Collection success and valueworsens with the
age of the invoice. Billing Date InvoiceDue Date Collection Date
11.
- Share financial statements
- Announce management & ownership changes
- Describe mergers and acquisitions
- Know their internal processes and be surethey know yours
- Communicate thru email and website
- Do not play catch me if you can!!!
Amuse Creditors 12. Financing Pie Chart 13.
Utilize Financing Options 14.
- Submit a completed Credit Application
- Payment experience of other Distributors and Vendors is
reviewed
- Credit Reports are reviewed
- Payment experience and history is reviewed
- Current Financial Statements are studied
Financing Option #1: Supplier Credit 15.
- Reseller applies and obtains a credit line with
anapprovedFinance Company.
- Reseller places order with Distributor (as usual).
- Distributor obtains electronic authorization from the Finance
Company and ships the order.
- Finance company pays Distributor.
- Reseller pays the Finance Company (free for 30 to 60 days in
most cases).
Financing Option #2: 3 rdParty Financing Can provide you with
added credit availability and free financing. 16.
- Supplements your Tech Data open account
- Freefinancing supported by Tech Data andcertain Vendors - 30 to
60 days in most cases
- Tech Data Financing Company Partners: - GE CDF, IBM Global
Finance, Textron TechnologyFinance, and De Lage Landen
3 rdParty Financing thru Tech Data 17.
- Reseller presents End User to Leasing Company
- Leasing Company approves and documents the deal
- Leasing Company pays Reseller or Distributor
-
- Tech Data Leasing Partner options: GE Commercial Distribution
Finance; Tech Data OneLease (Citicapital/Citibank); Key Equipment
Finance; and others with prior approval.
Financing Option #3: Leasing Can conserve capital and match your
customers cash flow.Quick response, simple documentation,
commission on approved leases. 18.
- Reseller and their qualified End-User agree toassign payments
directly to Distributor.
-
- Tech Data offers an alternative payee: Optimum Financial
- For commercial, state, and local governmentEnd Users
- Escrow Access for Federal governmentpurchases
Financing Option #4: Assignment of Proceeds Enables large sales
to qualified end users. 19.
- Standby Letter of Credit (SLOC)
-
- More cost effective than a bank loan
-
- Stands as secondary support for payment
- Documentary Letter of Credit
Financing Option #5: Letter of Credit Provides additional credit
beyond your open account. 20.
Financing Option #6: Guarantees Can enable the extension of
credit beyond your open account. 21.
- It is good strategy sometimes to retrench, slowdown, and catch
your breath.
- Significantly greater risk of being seriouslyinjured when you
play hurt.
- Classical life-cycle theory suggests businesscant always be in
a growth mode.
- Windows of opportunity dont stay open long.
- Decide while you still have choices.
Live to Fight Another Day 22.
- On-line invoice inquiry at: www.techdata.com
- On-line customer statements
- TD Direct Pay (Internet Bill Presentation andPayment
System)
Electronic Resources at Tech Data 23. Let us know if we can
help. [email_address]