Using the Credit Value Chain to drive an Effective Debt Collection Strategy  

What is the Credit Value Chain?

A Value Chain is a set of linked activities that together add value to the end product. The end product of the Credit Value Chain is collecting your debt effectively. Debtpack has a solution for every activity in the Value Chain to ensure that your debt collection strategy works!

Controllable Risk

Controllable relates to those factors which are within an organisation's control. It includes all those procedures an organisation can apply BEFORE granting credit. It will also include all procedures that can be applied to minimise the risk of default after credit has been granted (this is call Compliance Risk).

Examples of controllable risk include:

• Credit control policy formulation
• Customer relationship management
• Credit vetting and screening
• Credit sale agreements
• Compliance (risk) procedures
  • Invoicing and statements
  • Query management
  • Default management
  • Printing & document management
  • Tracing and recovery
  • Write of management
  • Journals and adjustments
  • Cost management
  • Workflow management
  • Recruiting procedures
  • Training

Inherent Risk

Credit inherently contains an element of the risk of default by the debtor. This risk may be greater or lesser in different organisations. The organisation granting the credit has no control over the inherent risk. This risk is determined by factors extraneous to the organisation such as general unemployment levels, changing socio-economic conditions, debtor attitudes and political issues.

Once credit is granted, every credit sale has some component of inherent default risk. It is the organisation granting the credit that must ensure that this inherent risk is minimised by applying prudent credit control procedures

Improve your collections by properly applying all the elements of the credit value chain. Contact Debtpack today, and we will help you implement an effective debt collection strategy.

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