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Published Articles by David Balovich

Title: Credit Scoring
Published in: Creditworthy News
Date: 4/2/03

 
If yo
u received the last edition of Business Credit (magazine published by National Association of Credit Management) you probably noticed the entire edition was devoted to credit scoring. Once scorned by the commercial credit community, forward thinking credit professionals are convincing their companies to invest resources into creating Risk Based Management Plans by analyzing each of their customers and establishing working credit lines and including a risk rating for each customer.

Although many credit managers establish credit lines they fail to establish a risk rating. Today, many believe a risk rating may be more important than the credit line in identifying and controlling credit worthiness. All too often the size of the company has been influential in determining the credit line rather than the applicantís ability to repay. Risk ratings not only take into consideration the size of the company but also financial and non-financial factors. Risk ratings also identify customers who are not utilizing their full credit potential (lost sales).

There are many companies today who provide Risk Based Management Plans but unfortunately, for the small to mid-size credit department these plans are either cost prohibitive or have system requirements that IT departments are unwilling to provide.

That is no longer the case as I have found a product that is efficient, affordable and user friendly. And itís system requirements are nothing more then a PC and a database platform. Bob Barna with Stainless Solutions has taken the database platform ACT! and created Credit for ACT!.

When I first encountered this software I was skeptical. Since starting this column, I regularly receive brochures and emails from companies asking me to mention their products or services. Up until now I have avoided doing so simply because nothing Iíve seen or used has impressed me enough to warrant an endorsement. But Credit for ACT! blew me away. I was so impressed with it and ACT! that I went out and bought ACT! and removed Microsoft Outlook from my computer. ACT! by itself is an amazing program and now with Credit for ACT! you will think that you have another employee on your staff because of all the time it will save you.

This program takes the information that is normally acquired in credit investigation and creates a credit line and risk-rating utilizing algorithms and formulas. In addition the credit reports that you utilize are included in the analysis. Whether you use D&B, Reimer, NACM or whatever, Credit for ACT! will customize your system disk to include your credit-reporting agency.

Credit for ACT! can track all payment commitments, analyze risk, create consistent credit lines, schedule follow up calls, set annual credit reviews on accounts and remind you daily who to call and what to do. It contains state of the art collection tools and includes letters and memos you can fax, email or print without having to fill out all the details because Credit for ACT! has already done it for you. This is a system that any manager, regardless of skill level, can review and easily determine why the credit amount was extended. This is a system that no credit professional should be without.

Credit for ACT! contains customized reports, collection, credit, bank and trade letters as well as reports that let you analyze almost anything.  This program is completely customizable, add your logo, change colors and even add fields to fit your exact needs.

Credit for ACT! retails for $295.00. I am so impressed with this product and feel so strongly that every manager should have it that I have made arrangements with Stainless Solutions for readers of this column to receive a purchase discount for a limited time.

Go to Bobís Website www.creditforact.com where you can download a 30-day free trial of both ACT! and Credit for ACT!. If you purchase before May 1, 2003 and use the discount code CW3JM you will receive a $30.00 discount off any of their products.

If you do not have ACT! or are not interested in changing databases Stainless Solutions has a great product called Credit & Risk Analysis that utilizes your specific industry ratios to properly analyze both payment and / or financial information. It is an Excel based program and will do all the credit scoring and risk analysis for you but does not create reports, letters or provide for follow up.

If you sell direct to the consumer or are a large B2B business with multiple locations that are linked by a database, Stainless Solutions has a program for you also.

Your company cannot afford not to have this product.

I wish you well.

This information is provided as information only and not legal advice. Legal advice should be obtained from a competent, licensed attorney, in good standing with the state bar association.


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