2. Agenda
1. Financial body check-up
2. Re-identification of core competence
3. Risk management: A/R
4. Risk management: Production & Inventory
5. Risk management: Cash
6. Risk management: People
7. In-depth meaning on Risk Management
3. Accounts Receivable
• Examine the current situation
• Spot out the customers
• Review the collection strategy
and credit hold policy
• Re-connect with your customers (how
much you know them?)
• Create forward-looking credit control
policy
• Any way to generate more cash from
A/R?
5. • What is the total overdue debt?
• What is the longest credit terms
accepted by the company?
• For customers with overdue debts, do
we still release delivery? If yes, why?
• How frequent do you read the aging
report?
– Monthly? Weekly? Daily? Or Never?
• Any credit terms> the standard term?
8. • Forward-looking
– Credit Limit Alert Report (Weekly)
• Current Balance + Average Invoice Amount
vs. Credit Limit
alert the customer & salesmen of this would-be
credit hold situation
– Know more about your customers
• From your salesman & staff
• From your suppliers
• From your competitors
• From your environment
• Report generated if it exceeds the credit limit,
9. • Local purchased materials for local
sales
• Imported materials for export sales
• Consignment
– Title of ownership
• Bank Draft
• Fixed cost vs. variable cost with spare
capacity
10. Key Risk Indicators (KRI)
• % of overdue debt / Total A/R
• Top 10 delinquent A/R and amount
• Late Payment customers and amount
11. When is AR created?
• Sales on credit
– Pass on ownership of the
products
– Pass the ownership risk
• Consignment goods
– Pass on custody of the products
– Do not pass the ownership risk