LCM Credit Risk
Credit Risk Solutions and Strategies
for Trade Creditors
MISSION STATEMENT
To provide Trade Creditors with a holistic Credit Risk and Credit Management Solution to effectively manage and control their account receivables.
To provide Trade Creditors with a
holistic Credit Risk and Credit
Management Solution to effectively manage and control their account receivables.
OBJECTIVES
To provide integrated credit risk management systems for trade creditors.
To, in a proactive manner, provide services to minimize bad debts, thereby creating a healthy cashflow.
ABOUT US
LCM Creditrisk (Pty) Ltd was formed in 2003 by Erick Breytenbach of Breytenbach, Mostert and Skosana (Commercial Litigation and Credit Management Attorneys) and Greg Nosworthy of Top Cover Credit Insurance and Credit Management Consultants.
At first, they recognised a need specifically in SME's where often a Sales Manager or Marketing Manager would double up as the Credit Manager, or where a clerk was left to open up new accounts with very little Credit Management experience. It was obvious that a structured system was needed for these companies where they could feel comfortable that all the necessary checks and balances were being performed and monitored. This need gave rise to the development of our "Integrated Credit Risk Management Systems".
It soon became apparent that our systems were not only needed by SME's, but that larger corporations were also looking for stronger Credit risk management controls and Business Intelligence with faster and easier access to Credit Applications and key Credit Information. Further development has now afforded our system to be recognised as an automatic Credit Underwriting system, being able to grant substantially large Insured Credit Limits under a Discretionary limit proviso on Credit Insurance Policies.
PRODUCTS AND SERVICES
CREDIT APPLICATION ADMINISTRATION
Our on-line Credit Application form is specifically designed to incorporate all the relevant elements of current legislation and the National Credit Act. It gives you peace of mind in knowing that all the pertinent information is collected from your potential debtor.
The Credit Application is personalized with your Company's details and logo, and also ensures that your potential debtor is made aware of your Standard Trading Terms and Conditions.
1. The system will track and monitor all your Credit Applications sent out to your potential clients.
2. Once the system receives an incoming Credit Application, the system tracks and monitors the progress of the Credit Risk Assessment process.
3. Once you open a new credit account for your client, you will then have instant access to this client and all of your clients Credit Applications and Credit Risk Scorings all stored on-line.
4. You now have full access to edit or update your clients Credit Applications and Credit Risk Scoring at any time.
5. Even if you close an existing account, you still have access to all of the Credit Application and Credit Risk Scoring history of all of your past clients.
CREDIT RISK ASSESSMENTS
The essence of this product is based on the fact that it combines current data as obtained from a customer/debtor at the point of sale with core historical data as extracted from the external database of Transunion Credit Bureau, the largest Credit Information Bureau in Southern Africa.
This consists of three credit risk scoring phases.
Phase 1
Either the Credit Application is e-mailed by the system to your prospective client, where they will complete it on-line, or the Credit Application is printed from the system and your prospective client will complete the hard copy.
If the Credit Application is completed and returned on-line, then the Application will automatically appear in the system under “Pending Applications”. If the Credit Application is returned as a hard copy, then the Application information would have to be captured on to the system.
In terms of the Electronic Communications and Transactions Act, case law has now shown that an e-mailed Application (without a signature) from a relevant persons address, now holds the same legal weight as a signed hard copy. However, we still encourage our subscribers to also obtain a hardcopy signature. In order to therefore simplify the evidential burden, our system also prompts your potential client to also print the hard copy on their side, and to sign it and fax it to yourselves.
By clicking on the newly received Credit Application, the Application is automatically and instantly assessed. Various fields of information on the Application are weighted according to their importance, and certain checks and balances are performed in order to generate a Credit Risk Score.
Phase 2
This phase requires the in put of the Subscriber and takes approximately 10 minutes.
A number of credit risk questions with regards to your potential new client now need to be answered on-line.
The Subscriber will need to phone the prospective client in order to do some of the necessary checks and to complete the questions.
The Subscriber will also need to phone the trade references on the Credit Application in order to complete the questions.
On completion of these questions, this phase is also automatically and instantly assessed. Once again, various questions are weighted according to their importance, and certain checks and balances are performed in order to generate a Credit Risk Score.
Phase 3
This phase has a manual option and an automated option.
To complete the manual option a Credit Bureau report on your prospective client must be taken.
This Credit Bureau report can be obtained on our system instantly.
Once you have the Credit Bureau report then you can answer the on-line questions with regards to the information on the report.
If you choose the automated option, then you do not have to manually obtain the Credit Bureau report. All you do is push the process button and our system automatically goes out and updates all the latest credit information on your prospective client, and automatically completes the on-line credit risk questions for this phase. The generating of a Credit Risk Score for this automated option can take between 24hrs and 48hrs, however you are assured that your Credit Risk Score is based on the very latest and updated credit information available.
The scores of Phase 1, 2 and 3 are automatically combined by the system and will give you an overall indication of the credit risk on your prospective client.
This system is basically an Automatic Credit Underwriting System, and has already been approved by some Credit Insurers in order to give some of our clients huge Insured Credit Limits of Discretion.
PRE-LEGAL DEBT COLLECTION
How long does it take you to hand over an account for collection?
How long does it take you to get your Attorney or Debt Collector to phone you back?
Are your Debt Collectors reputable and professional?
Are you in for a few thousand rand by the end of the first month with no results?
Our on-line hand over system is instantaneous and your handovers are professionally handled by our associate company Breytenbach, Mostert and Skosana (Commercial Litigation and Credit Management Attorneys).
A letter of demand or even just a phone call from an experiencedAttorney is always far more powerful than just using a normal Debt Collector.
On receipt of your handover we are given two months to be successful with your collection.
In general we charge 10% on matters above R20,000-00 and 15% for smaller matters.
There are no additional fees or hidden costs. Coupled with this, you will be assured of a proper and professional process as supported by the extensive infrastructure offered by Breytenbach, Mostert and Skosana Attorneys.
Should we be unsuccessful after two months, we will then give you the option to escalate the matter by commencing with legal action or to take the matter back at no cost and to use another Attorney or Debt Collector of your choice.
Breytenbach, Mostert and Skosana presently act as Debt Collection Attorneys on behalf of Credit Guarantee, Coface, Lombards, Transunion and also many Trade Creditors.
DEBTOR MONITORING
Our business monitoring systems inform you of any changes to your debtors risk profile, giving you the information you need to keep your business relationships healthy and take remedial action when necessary.
Our systems can track the performance of both businesses and their principals.
Criteria used to monitor businesses include:
Judgements, Defaults, Bank Codes, Affiliations, Business Status, Notices and Credit Risk Scores.
Criteria used to monitor principals include:
Judgements, Defaults, Notices, Movements and Debt Review.
When an alert is generated, it is e-mailed to you within 48hrs.
Management reports, which display a history of all alerts received on your clients, are sent out bi-weekly or monthly based on your requirements.
BUSINESS FAILURE PREDICTION
This product is a Credit Risk Score which uses information on the business such as status, age, default information, asset information, trade information, principal information and links to other businesses that the principals may be associated with.
Based on these weighted variables, a score is calculated and classified into one of seven bands, from low to high risk, each with its own odds of business failure.
This score is translated into a score band that indicates the level of risk in relation to the average risk across all credit active companies. The score band is accompanied by the odds of failure, which is a direct interpretation of the failure rate within the same band.
It is important that a credit decision is not made based on this product alone, but rather in conjunction with all other credit information available on your particular client.
CREDIT INSURANCE
There are direct links from our system into the Credit Insurers systems for the purposes of easy and speedy credit limit applications, premium declarations and general administration of the Credit Insurance Policy.
“Credit Insurance guarantees payment to the Policyholder in cases where their debtor either defaults with payment or is forced into liquidation.
We structure tailor-made Credit Insurance Policies to suit our clients specific credit risk needs.
The Credit Insurance is placed by our Financial Services Board Licensed company “Top Cover”.
Our services include:
1. Assessing your specific Credit Risk and Credit Insurance needs.
2. Structuring a tailor-made Credit Insurance solution.
3. Sourcing and negotiating the best pricing for your solution.
4. Assistance in implementing the solution within your company.
5. Regular auditing with regards to policy compliance issues.
6. Assistance with obtaining Credit Insurance limits.
7. Assistance with submission of claims
8. Yearly re-assessment of your specific Credit Insurance solution.
Unique benefits for our Credit Insurance clients
1. Discount of 50% on subscription fee to www.creditrisk.co.za
2. Discount of 50% on first 2 pre-legal debt collection matters.
3. Discount of 15% for one staff member on any one of our Workshops.
Our services are free to you
As Specialist Credit Insurance Consultants, we are paid a marketing commission by the Credit Insurers for any new business we place with them. Therefore there is no cost to yourselves and the cost of your Credit Insurance is in no way affected or increased by our involvement.
We can also be appointed by companies to be their Credit Insurance Service Consultants on their existing Credit Insurance Policy, with no additional fees to them or any increase in their current premium payments.
COMMERCIAL LITIGATION SERVICES
Our present legal system is drawn out and expensive. It is therefore important to have someone on your side who understands the legal system and the needs of the Trade Creditor. This is why we have partnered with Breytenbach, Mostert and Skosana, who are Specialist Credit Management and Commercial Litigation Attorneys.
They presently represent most of the major role players in the trade credit arena. These clients include: Credit Guarantee, Coface, Lombards, Transunion and many Trade Creditors.
CREDIT MANAGEMENT TRAINING
All our clients will testify to the extremely professional and high standard which we have set with regards to our Credit Management Conferences, Workshops and Training Courses.
Please keep watching this space for the dates of our up-coming Conferences and Workshops.
Our e-study Credit Management program is also in the process of being developed.
AUTOMATED BALANCE SHEET ANALYSIS
Just transfer the figures from the Company’s Balance Sheet into our system and press the process button.
The system will instantaneously calculate the most important financial ratios and explain their implications.
Remember that it is always important to compare the present results with the results for the same period from the previous year.
CREDIT BUREAU REPORTS
We have been appointed as Transunion Channel Partners and represent them in the market with credit information specifically packaged for the needs of Trade Creditors and Credit Insurers.
Additional Export Credit Information is also sourced from Dunn and Bradstreet or Coface, one of the leading Credit Insurers in Southern Africa.
Our Subscribers have instant access to these data bases of credit information along with access to specifically designed products to assist them with their Credit Risk assessments and decisions.
ACCOUNT REVIEWS
A Credit Risk Diary system is in place so that our Subscribers are prompted at six monthly intervals from the date on which their clients account was opened, to do a new updated Credit Risk Assessment.
Our Subscribers have the option to choose an Automated Phase 3 Credit Risk Scoring update, or to skip the updated risk assessment and to be reminded again in another 6 months time.
CONTACT US
If you wish us to contact you, please insert your contact details below;
Alternatively, you may contact us on;
Tel: +27 11 023 5088
Fax: +27 86 648 2002
LOG ON TO CREDITRISK
Our system is a holistic Credit Risk and Credit Management solution for
Trade Creditors. Our Subscribers are credit active enterprises who are given
access to our complete range of on-line Credit Risk and Credit Management
tools.
This system enables our Subscribers to manage their credit risk professionally and efficiently.
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