Debtpack have developed the credit value chain methodology to identify the key activities that drive an effective credit management strategy.
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 an effective credit management solution!
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:
Examples of compliance risk procedures
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.
Debtpack will save you time and money. Stop letting overdue debtors get you down and take action today.