NZ Credit & Finance Institute
Member
Governance New Zealand
Associate Member
RITANZ
New Zealand General Member

Risk Management Unit

credit risk assessment, contract review and security options

Managing Credit Risk is Key

Credit makes the business world go round and so in most industries extending credit to customers for goods or services supplied is the norm.

But not all businesses are financially equal so it is unlikely that all of your credit customers will have an equal ability to repay you when required.

In addition, a recession can have a significant detrimental impact to a large number of businesses, cash becomes constrained and inability to pay becomes a contagion. So what can be done about it?

It would be advantageous for you to be able to identify high credit risk and low credit risk customers and from that analysis specific actions can be developed that maximise your chances of cash recovery.

By the way, identifying low risk customers means that your best customers can be spared unnecessary follow up.

Check your current credit risk position by using our DSO Calculator.

Key Services

Credit Risk

Expert analysis to identify high and low risk customers. From there specific plans can be created that can maximise your cash position in case of non-payment. In addition security options can be considered & options proposed that give you a better chance of future cash recovery.

Terms of Trade

Your terms of trade are a cornerstone of good credit management. These can be reviewed to ensure the relevant terms are included. Important terms include cost recovery clauses, payment terms, actions on non-payment and, if you supply goods, Personal Property Securities Act clauses including retention of title.

Legal Entity Review

There are many different types of business legal entity in New Zealand, including limited companies, limited partnerships, partnerships and joint ventures. Each have their own unique characteristics which need to be taken into account when contracting and when deciding upon relevant securities.

Credit Audit

Cashflow is of course of primary importance to any business. So for the ultimate in getting peace of mind you can’t go far wrong with a comprehensive Credit Audit. Your current arrangements with respect to credit, including customer risk, contracts and legal compliance are thoroughly reviewed. For more information click here.

Summary

  • Identifying high and low risk customers enables you to develop appropriate action plans on payment default
  • An expert credit assessment can help with the decision as to whether to extend credit at all, or, if so, on what terms and with what security
  • Relevant terms of trade are necessary to protect your position and to allow you to secure goods supplied on credit to the fullest extent permissible by law
  • Make sure you have properly identified the legal entity type you are supplying and contracting with
  • A Credit Report is a good start for any credit assessment as it gives an objective third party view of your customer

More Information

BizEnhanz is pleased to offer a free, no obligation 15 minute phone consultation to discuss any specific Risk Management questions you may have.
Please contact me to arrange for a time for my FREE phone consultation