Business Credit Management Report
Many companies are experiencing a downturn in business as a result of our current economic
conditions. Cost reductions are the key words and companies are looking at every avenue
possible to reduce or lower costs. It is therefore more important than ever to manage your costs
of doing business.
While the credit approval and account receivable functions are vitally important to the cash flow
of a business, it does require an investment of time, expertise, and resources in order for it to be
effective. For some companies, a fully staffed in-house department is necessary. However, in
today’s business environment, a growing number of companies are looking for new and
innovative ways to streamline their organizations, focus on their core business and most
importantly, become more competitive. All of this has made outsourcing one of the hottest
trends in business today.
The Credit Research Foundation published a Staff Report on Credit Investigation, which
included a Sequential List of Credit Information Sources and Costs. This report refers to the inhouse
cost when processing your own business credit applications. Some of those sources and
costs, adjusted to inflation using Consumer Price Index calculations by the Bureau of Labor
Statistics, are as follows:
Ship order without credit Investigation $0
Obtain and analyze bank report $ 57.79
Contact four trade suppliers and analyze information $133.24
Obtain, spread, and analyze financial statements $249.81
Visit customer and analyze resulting Information $832.69
Just contacting the references and reviewing banking information would bring your in-house
costs to about $191.00 plus another $35.00 to obtain, review and analyze personal credit
history, when there is individual liability for a total of $226.00. And that does not take into
consideration the due diligence required on each application. You need to verify that the name
on the application is their correct legal name or trade name. Is the credit application and
agreement signed by a person authorized to bind the Company to your terms and conditions? If
there is individual liability, did both husband and wife sign? Is their professional license, if any,
current and in the same name that appears on your credit application and agreement? This is
just part of the due diligence that is required on each application.
With The Sobel Group processing your business credit applications, the information received is investigated and evaluated, then returned to you in an easy to read report. The Sobel Group, depending on volume, can substantially reduce your costs.
One of the most important tactical reasons for outsourcing is to reduce and control operating costs. The Sobel Group’s extensive experience and access to The Sobel Group’s lower cost structure, is clearly and simply two of the most compelling tactical reasons for outsourcing the processing of your business credit applications to The Sobel Group.
So you can see an actual evaluation prepared by our company we will provide you with a free – no obligation – report if requested in the next 7 days. Just forward us a copy of this letter along with a business credit application received from one of your customers that you recently processed or a new application that you have not yet processed. Our office will:
- Review the application for completeness.
- Verify that the name on the application is their correct legal name.
- Verify that the Company applying for credit is in good standing with the Corporation Commission or Secretary of State.
- Verify that their professional license, if any, is active and in good standing.
- Confirm that the signature(s) on the application is legible and that of an appropriate person to bind the Company to your Terms and Conditions.
- Review the personal guaranty, if submitted, for completeness and proper signatures.
Investigate the personal profile of the guarantor(s). - Request account information from the customer’s bank.
- Request payment history, terms, trends, and comments from the business credit references submitted.
- Provide you, our client, with an easy to read report setting forth the information obtained.
If desired, we can also include a summary at the end of our report that would include suggestions on how to sell the customer based on your current credit policy and philosophy, updated with your office as needed.
Email or fax the application to my attention with a copy of this letter. Remember, this is a free evaluation and there is no obligation. We just want the opportunity to show you how we can save your company time and money.
I look forward to the opportunity to earn your business.
Jeffrey L. Sobel
bcm report 01.01.2017
