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Debt Management

Credit?
Yes? No? Maybe?

By Roger Symes, Director, Marine Debt Management, London

I
n past issues of The Ship Supplier I “Yes” will apply to existing regular today requires an almost instantaneous

have written about the importance customers known to be reliable and decision. All eventualities can be covered
of having a clearly understood creditother highly regarded companies, such by providing space on the checklist for

policy. Central to that policy is to set out as the oil majors. “No” will apply toquestions three and four: “List reasons
how credit decisions are to be made. any company subject to UN, US, EU or to grant credit” and “List reasons not to

Regardless of company size, this is best other sanctions, companies who have grant credit”. Examples of the irst would
done using a simple one-page checkcreated problems in the past, orders be favourable reports from the ship’s

list. This speeds up the time taken to too big or too small or for items outside local agents and/or other suppliers and
knowledge that the ship is due to return
make decisions and ensures they are your normal range. For example,
consistent. It also provides a record which anyone asking a ship supplier to provide to your port on a regular basis. Reasons

can be used to improve future decision bunkers is usually a bad sign as, almost not to grant credit might include the age
making. It is worth restating that, for a certainly, the company is being refused of the ship or negative information about

company making a nett 5% proit, one credit elsewhere.her owners revealed through an internet
bad decision has the same impact on It is worthwhile providing space for a search. The act of committing reasons to

proitability as 20 good decisions.one line explanation of the “Yes” or “No” paper often serves to crystallise thinking
After entering the name of the decision and also for giving each check list thereby making the eventual decision

customer or prospective customer at a sequential number. This aids periodic easier. Alternatively, it may highlight
the top of the page, the irst question is evaluation of how many credit decisions a lack of information best remedied

simple, “How much credit is required?” are being taken and the percentage of by purchasing a credit report from an
each answer to this question.established information provider.
For a one-off storing, this will be the
value of that storing but for a regular The answer “Maybe” requires At the bottom of the page repeat

customer it is likely to be the equivalent completion of the rest of the check list, question two. Now the only options are
to three-months’ sales. No credit but it will likely account for less than“Yes” or “No”. Finally, leave space for a

decision should be taken without having a quarter of all credit decisions taken. signature and date.
a credit line in mind. The term credit line Time is often of the essence and may In the next issue of The Ship Supplier

is preferred to credit limit, since the aim well inluence decision making. At one I’ll explain how the “10 minute Credit
is not to limit sales.extreme, knowledge that a particular Check” can help ship suppliers make

Once you have a sum of money in cruise ship will call to your port next speedy credit decisions. u
mind, question two is, “Do we agree year, allows for a lengthy period of

that credit line?” It has three possible credit checking. At the other, a ship
answers: “Yes”, “No” and “Maybe”. Either already in port and expected to sail later

of the irst two answers means no

further questions need be answered.

The SHIP Supplier Issue 66 2015 21