Credit management
The credit management , credit management , customer or receivables management deals with all the processes around the creation and handling of client demands.
While receivables management mostly focuses on existing receivables and their collection, credit or receivables management also includes the processes before receivables arise.
Credit management includes credit checks and monitoring in order to identify possible payment default risks at an early stage and to take preventive action.
tasks
The main tasks of credit management are to reduce bad debts through early detection of the risk of default, as well as to accelerate incoming payments.
In practice, the credit manager's duties include:
- Creation and maintenance of a credit policy
- Checking and monitoring the creditworthiness of customers
- Assistance in setting payment terms
- Classification of the risk using risk classes
- Obtaining and evaluating collateral
- Definition of credit limits to limit the risk and their monitoring
- Collection of due claims.
- Avoidance of non-payment and reduction reasons
target
The primary goal of credit management is to improve the earnings and liquidity situation of a company and thus to increase the company's value over the long term .
Job title
Since there is no specific professional training for credit management, the terms are very different. The term credit manager is becoming more and more popular, especially since the Bundesverband Credit Management (BvCM - until April 2011: Verein für Credit Management) eV in cooperation with the University of Applied Sciences in Bochum, qualification measures for Certified Credit Manager and Certified Credit Controller. In Switzerland, too, the Association for Credit Management Switzerland has offered a similar qualification since 2013.