Companies can again look forward to increasing turnover, with the German economy experiencing an upward trend, driven in particular by a prospering export business. This also leads to a higher risk for non-payment. Many business partners had a liquidity problem after the recent financial crisis, and when doing business with foreign partners, credit assessment is often not manageable by routine methods.

Credit management is a cornerstone of securing the future and occupies a central importance in most companies at this point. The handling of the loss of receivables has gained in professionalism.

The competences of sales and limit appointments are controlled, responsibilities and processes from sales orders over credit check, classification of risks, limits, payment conditions, customer monitoring, to default action and collection are described and placed in work instructions. Regular audits, internal and external are used to maintain quality, and a Certified Credit Management, for example by TÜV Rheinland, is used to safeguard internal and external transparency in financial communication.

The fact that information concerning the debtor has to be summarized and documented in a central place to minimize and control risks is central, along with the requirement of corresponding IT support.

IT solutions for the processes in credit management require a high level of comprehension of the complex interlocking factors of account receivables accounting as well as for the strategic requirements of treasury and controlling. Not to be forgotten here is the integration of the “two faces” of the user, meaning that these IT solutions have to be both friendly to the credit manager as well as to the sales manager.

For example: sales managers can review all information on their customers on a daily basis. The executive board receives, by the touch of a button, an overview of all important parameters: customers, open receivables, expiries of the rental period, limit overflow, insured/not insured receivables etc. Competences for limit decisions are often awarded linked to the hierarchical structure of the company. For very critical decisions the directory board takes the responsibility.

This settles the matter of one of the two great challenges of the market, the limit properly adjusted on the covered amount.

The other great challenge is internationalization, the raising amount of exports constitute in some companies nearly 50% of their sales turnover.

The current growth markets cannot be insured by credit insurance without problems. The default risk stays in the hand of the company. The problem of information procurement can often be solved by nothing but personal initiative and diligence. There is no credit relevant information for every country. Already before contract design the payment experiences typical for the country and also the legal conditions should be available. This is most times only possible by an engagement-on-site by a sales manager who knows the conditions of the country and who should be sensitive on credit management.