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Debt Management

Questioning credit

this background, it is natural to want to management affects only the supplier. At

keep internal company paperwork to a the least, it means profit is lost because
minimum. That said, certain paperwork effort is put into sales that remain unpaid.

can help to keep the business focused At worst, it leads to a cash flow crisis and
and lead to improvements in service losses sufficient to result in bankruptcy.

delivery. The ISSA Quality Standard is a Despite this, the lack of

good example. Many suppliers will also international standards and customer
be familiar with international impact mean that many suppliers do not

management standards such as ISO yet have a formal credit policy. There
I9001:2008.are historical reasons for this. A lot of

Interestingly, no international business used to be done "Cash by
standard has been adopted for credit Master" or via the ship's local agents.

SSA members excel at meeting the management. In 1996 the British Fleets were typically small, so credit
needs of their customers. As well as Standards Institution issued BS 7860 for exposure to any one customer was not

getting the job done, often at short achieving good payment performance in great. Competition levels meant
notice, often at a weekend, they have to commercial transactions but very few "getting the order" was seen as the

ensure all the paperwork is correct and companies applied for accreditation and it priority. Those reasons no longer apply.

in order. The paperwork can be more was withdrawn in 2001. Perhaps the Many owners and managers have
complex than the delivery, since the apparent lack of a standard is because reduced the cash carried onboard their

supplier not only has to meet the needs credit management, whilst key to the ships and require all supplies to be
of the customer but also of all relevant success of any business, does not impact invoiced on credit terms. Ship owner

local authorities, including those on the customer experience. Poor product and manager mergers and acquisitions
responsible for tax, customs, hygiene, quality and service delivery affect the have continued apace over the last 20

safety, security and many more. Againstcustomer, whereas poor credityears, resulting in fewer, much larger

Issue 63 2014
48 The SHIP Supplier