Customers Credit Worthiness Evaluation and Collection Strategies


Credit Decisions are the reflection of personal judgment about a perspective or existing customers ability to pay. It is therefore of paramount importance to have a clear understanding and appreciation of the purpose of extending a credit facility to a customer. Hence it is important that Sellers who sell on credit terms is aware of the various risk that they are being exposed and that there are aspects that they can access in order to mitigate such risk.

Every executives involved in and along the process in which the credit sales has to take place are appropriately trained and equip with the necessary skill and knowledge to achieve the organization’s common goal of “Collectivity of the Debt”.

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Learning Objectives

  • Purpose and advantages of credit worthiness evaluation towards risk mitigation and collection efficiencies.
  • Methods used in evaluating the customers’ credit worthiness and successful collection strategies used.
  • Minimizing human relations problem in the credit and collection management process.
  • Understanding key financial jargons commonly used in credit evaluation.

Learning Benefits

ENHANCING your skill in the customers’ credit worthiness evaluation both quantitatively and qualitatively and its correlation with the various risk.

INCREASE awareness of human behavior to overcome obstacles in credit evaluation and collection actions to achieve a more effective working capital management.

MASTER the various key financial and credit management jargons used daily.

STRENGTHEN the avoidance of cash flow deficit traps.

TIPPING POINT and SYMBIOSIS APPROACH towards the increase in effectiveness in the overall Credit and Collection Management.

LEARN the End In Mind First philosophy to improve and integrate the Thinking into Management and Actions.

Who Should Attend ?

  • Managers, Executives, Supervisors of Sales, Accounts & Finance and Credit Control Department.
  • Staff members involved in the administration of “credit management”.
  • Entrepreneurs.
  • AND those aspire to improve the effectiveness in the credit management or to build a career in this function.


  • Participant will attend two days of lectures, case studies and individual & group activities.
  • A Calculator is require during the activities practicing the quantitative activities.


1. A general overview of why credit worthiness evaluation, types and the different kind of risk

2. Introduction of the credit worthiness models

3. Introducing and understanding the various components in the financial statements (Income Statements, Financial Position Statements,  Cash Flow Statement, Statement of change in equity)

4. Quantitative Evaluation using more than 20 Financial Ratios

– Vertical and Horizontal analysis
– Profitability ratios
– Liquidity ratios
– Operating Efficiency ratios
– Stability / Bankruptcy ratio
– Z-Score

5. Quality of Security and difference between support, comfort and guarantee

6. Qualitative Evaluation

– Industry analysis
– Future Environmental Scan
– Strategic Positioning

7. House Keeping and planning your collection missions

– Delivery and Billings
– Question interest charge
– Issues handling
– Statement of Accounts / Ageing reports
– Target identification and planning
– Problem identification, understanding and mitigation
– Objective focus: opening statement
– Fair, firm and persistent
– Empathy and relationship building
– Other back office support

8. Collection Methods

– Communication Skills: Telephone, Reminders
– Personal visits
– IQ and EQ
– Objection Skills & Negotiations
– Hitting the right person
– Listening skill: reading the answers given
– Win-win solution: installments, discounts, countertrade, payment in kind
– Assist in client’s financing facilities
– Collection agents
– Legal means

9. Conclusion


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