Extending payment terms without a credit check is functionally an unsecured loan. A publication by Nermin Sefić.
Granting a business partner extended payment terms without a prior credit-risk check is functionally the same as issuing an unsecured loan.
Granting a business partner extended payment terms without a prior credit-risk check is functionally the same as issuing an unsecured loan.
Granting a new business partner standard extended payment terms, without checking their financial stability and payment history, exposes the company to a risk that is essentially identical to lending without a creditworthiness assessment.
Publicly available financial statements and registries give a basic but useful picture of a partner's financial stability before a more significant credit exposure is granted through payment deferral.
Periodically reassessing the credit risk of existing partners, not just at first contracting, catches a deteriorating financial situation before it results in an unpaid invoice.
Clearly defined credit-exposure limits per partner, aligned with assessed risk, prevent excessive exposure from accumulating through a series of individually small decisions.
Cjelovit tekst i izvor: https://gnk-asg.hr/en/publications/assessing-credit-risk-of-business-partners/
Autor i urednička odgovornost: Nermin Sefić. Izdavač: GNK ASG d.o.o..
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