Business Administration & Management Mr. Bernstein Credit Principles and Practice, pp 479-492 June...
6
Business Administration & Management Mr. Bernstein Credit Principles and Practice, pp 479-492 June 1, 2015
-
Upload
garry-charles -
Category
Documents
-
view
212 -
download
0
Transcript of Business Administration & Management Mr. Bernstein Credit Principles and Practice, pp 479-492 June...
Business Administration & Management
Mr. Bernstein
Credit Principles and Practice, pp 479-492
June 1, 2015
2
Business Administration & Management
Mr. Bernstein
When Do Businesses Extend Credit?When they believe it will increase salesWhen they believe they are likely to be
paid in full
3
Business Administration & Management
Mr. Bernstein
Retail Business CreditWork with national credit card companiesEstablish a branded credit cardOffer consumers credit plans
Partner with finance co. (white label)Build in-house finance team
4
Business Administration & Management
Mr. Bernstein
Credit Policies: The 3 C’s of Credit Character
Capacity Capital
5
Business Administration & Management
Mr. Bernstein
Establishing a Credit PolicyCredit Department typically reviews and revisesShould fit with company’s overall objectivesIncludes total capacity, application by product, sales terms, collateral, collection terms, pricing and exceptions
6
Business Administration & Management
Mr. Bernstein
Analyzing Credit SalesAging the Accounts – 30 days, 60 days, 90+ daysUnpaid after 90 days: 73% chance of paymentUnpaid after 1 year: 30% chance of paymentMust monitor trendsMay need to “fire” some customers to preserve capital and balance sheet
