STRATEGIC CREDIT MANAGEMENT IN SOUTH AFRICA

QUESTIONS TO THE CREDIT MANAGER


Part Demographical Data

Personal Data

Please indicate your age, qualification, institution and current position.

Age


20 - 29 years


30 - 39 years


40 - 49 years


50 - 59 years

Qualification


B Com


BA


B Tech


National Diploma:
Credit Management

Other

Institution where abovementioned
 qualification was obtained

e.g. Unisa, Damelin, ICM, University of Pretoria

Current Position


Debtors Clerk


Credit Controller


Credit Supervisor


Credit Manager


Credit Director

Other

Please indicate your level/years of experience in the following departments?


Department/Function

None

1 - 11
 Months

1 - 4
 Years

5 - 9
 Years

10 - 14
 Years

15 - 19
 Years

Other

 

Credit department

Finance department

General Management

Human Resource

Marketing

Operations

Purchasing

Other

Departmental Data

Please indicate the following:

Number of employees in your credit department?


1 - 9


10 - 19


20 - 29


30 - 39


40 - 49

Other

To whom do you report directly?


Credit Supervisor


Credit Manager


Marketing Manager


Sales Manager


Financial Manager

Other

Is the credit function centralized or decentralized?


Centralized


De-centralized

Other

What is the size of the debtor’s book?


R500 000 - R4,9
million


R5 - 49,9
million


R50 - 499,9
million


R500 - 999,9
million


R1 billion>

Other

How many days credit does the standard payment terms of your credit policy allow?


0 - 14
days


15 - 29
days


30
days


31 - 60
days


60
days +

Other

Do you have a written credit policy?

Yes

No

Do not know

If you answered “yes”, does the credit policy define the following?

Agreeing terms

Yes

No

Stopping deliveries

Yes

No

Levels of authority for agreeing credit terms and payments

Yes

No

Timetables for actions and intervals for collection

Yes

No

Training for credit staff

Yes

No

Performance objectives

Yes

No

Does your conditions of sale allow you to:

Charge interest on overdue accounts

Yes

No

Do not know

Retain ownership of goods until paid

Yes

No

Do not know

Do you set credit limits for:

All accounts

Yes

No

Some accounts

Yes

No

None

Yes

No

Do you formally agree payment terms:

Prior to sale, verbally

Yes

No

Prior to sale, in writing

Yes

No

After sale by invoice

Yes

No

What percentage of your time (per year) do you devote to the following activities?

%
± 0

%
± 10

%
± 20

%
± 30

%
± 40

%
± 50

%
± 60

%
± 70

%
± 80

%
± 90

 

Negotiating payment terms and conditions

Checking customers ability to pay

Checking orders against credit limits

Collecting revenue

Applying cash adjustments to the sales ledger

Resolving disputes

Other

Upon receiving a credit application, which of the following sources of information do you consider before granting credit?

Application form

Credit Bureau information

Business payment information

Risk Score

Other

Which of the following methods do you use when deciding to extend credit?

Manual evaluation based on company’s credit policy

Evaluation based on derived score

Rules based evaluation

Other

Organizational Data

Firstly in colomn 1, please indicate the type of industry in which your organization is operating. Then in colomn 2, specify the type of business in which your organization is operating.

Type of Industry

Type of Business

(for example: manufacture motors, distribute cement, food store, restaurant, shoe store, etc.)

Agriculture, Forestry & Fishing

Automotive

Building, Construction & Civil Engineering

Chemicals

Computers & Communication

Electrical Power

Equipment

Exchanges

Financial Services

Food, Beverages & Tobacco

Health Services

Materials Handling

Manufacturing

Oil & Gas

Packaging

Professional Services

Public Utilities

Pulp & Paper

Real Estate

Retail

Textiles & Clothing

Trading

Transport & Storage

Waste Management, Pollution Control & Recycling

Wholesale

Other

What type of credit service does your organization render?

Consumer Credit

Yes

No

Corporate Credit

Yes

No

Other

Please indicate the following:

In your organization, what percentage of total assets constitutes debtors?

%

1 - 9

%

10 - 20

%

21 - 29

%

30 - 39

%

40 - 49

Other

In terms of your organization’s last financial year, what percentage of turnover constitutes bad debts?

%

0.01 - 0.1

%

0.11 - 0.75

%

0.76 - 0.99

%

1 - 1.2

%

1.3 - 1.5

Other


Part strategic magement principles

General

Are you currently making use of a model with guidelines to assist you in managing the credit function strategically?

Yes

No

Would you require such a framework, that could assist you in managing the credit function strategically?

Yes

No

Are the objectives of your credit department linked to the goals of your organization?

Yes

No

Environmental Scanning

To what extent do you agree or disagree with the following statements?

 

Statement

Strongly
disagree

Disagree

Agree

Strongly
agree

The good reputation of your credit personnel and their knowledge, relative to that of competitors might be a source of competitive advantage.

It is necessary for you as credit manager to have adequate knowledge of changes in the credit industry to enable you to recognize threats that may affect the future of the credit function.

Although you have no control over the macro-environment, you still need to monitor tendencies and developments in this environment to make the necessary adjustments to your credit strategy.

Strategy Formulation

To what extent do you agree or disagree with the following statements?


Statement

Strongly disagree

Disagree

Agree

Strongly agree

The main objective of your credit department is to contribute to the value of stakeholders.

In formulating a long-term strategy for your credit department, it is necessary to specify achievable objectives.

It is necessary to set guidelines for the development of credit- and collection policies when formulating a strategy for your credit department.

Strategy Implementation

To what extent to you agree or disagree with the following statements?

 

Statement

Strongly
disagree

Disagree

Agree

Strongly
agree

Implementing a strategy for your credit department is a process by which credit- and collection strategies and policies are put into action through the development of programs, budgets and procedures.

To implement a credit strategy, it is important to determine the key, routine activities that must be undertaken to provide the credit service.

The process of implementing a credit strategy involves a change of culture of the credit function in your organization.

Budget (costing) of your credit department programs includes:

the allocation of resources

Yes

No

Do not know

the coordination of credit department operations

Yes

No

Do not know

controlling the appropriation of credit funds

Yes

No

Do not know

enabling managerial control of the credit department’s performance

Yes

No

Do not know

Other

Strategy Evaluation and Controlling

Please indicate how much emphasis your credit department currently places on the evaluation and controlling of performance standards.

No emphasis...1 2 3 4 5...A lot of emphasis

Emphasis is placed on the setting of performance standards

Emphasis is placed on the measurement of the actual performance

Emphasis is placed on the identification of deviations from the set standards

Emphasis is placed on the taking of corrective actions

Please indicate to which extent you are aware of, familiar with or using the methods listed below, to evaluate and control performance standards in your credit department.

 

 

Aware of

Aware of but not familiar with

Familiar but have never used

Currently use method or have used it in the past

 Balanced-Scorecard method

 Shareholder Value method

 Benchmarking

 Management by Objectives (MBO)

 Total Quality Management (TQM)

Other


Part education and training

Take note:

Question 16 is based on the CURRENT situation.

Question 17 is based on the FUTURE situation.

Current strategic credit management education and training

Which institution in SA, (that you are aware of), currently offers a course or qualification in Strategic Credit Management?

ICM (Institute of Credit Management)

Damelin

IOB (Institute of Bankers)

A University (name of University)

A Technikon (name of Technikon)

A Technical College (name of Technical college)

Other

Not aware of any institution

What type of Strategic Credit Management course or qualification does this Institution, as mentioned in 16.1, currently offer?

1-5 day Workshop

3-month Certificate

1-year Certificate

3-month Diploma

1-year Diploma

Other

At what NQF (National Qualification Framework) level is this course or qualification, as mentioned in 16.2, currently being offered?

NQF 4 = matric /FETC
NQF 5 = Foundational Certificate (one-year  after matric)
NQF 6 = Diploma after matric (two-years after matric)
NQF 7 = First Bachelors Degree (three years after matric)
 

NQF 5

NQF 6

NQF 7

Other

Which typical topics are currently being addressed in this course or Qualification, as mentioned in 16.2

 


 

Desired Future Strategic Credit Management Education and Training

In the future, which institution should offer a course or qualification in Strategic Credit Management?

ICM (Institute of Credit Management)

Damelin

IOB (Institute of Bankers)

A University (name of University)

A Technikon (name of Technikon)

A Technical College (name of Technical college)

Other

What type of Strategic Credit Management course or qualification should this Institution, as mentioned in 17.1,  offer in the future?

1-5 day Workshop

3-month Certificate

1-year Certificate

3-month Diploma

1-year Diploma

Other

At what NQF (National Qualification Framework) level should this course or qualification, as mentioned in 17.1 and 17.2, be offered in the future?

NQF 4 = matric /FETC
NQF 5 = Foundational Certificate (one-year  after matric)
NQF 6 = Diploma after matric (two-years after matric)
NQF 7 = First Bachelors Degree (three years after matric)
 

NQF 5

NQF 6

NQF 7

Other

Which topics should this course or qualification, as mentioned in 17.2, address in the future?

 

Desired outcomes for future courses/qualifications in strategic credit management

The objective of the following five questions is to determine five desired outcomes that a person in your position would require when attending a course in strategic credit management.

What should the student know about managing the credit function strategically?

An informed understanding of the important terms, rules, concepts and principles of managing a credit function strategically

An sound understanding of the important terms, rules, concepts and principles of managing a credit function strategically

An coherent and critical understanding of the important terms, rules, concepts and principles of managing a credit function strategically

What type of problems should you be able to solve?

An ability to use your knowledge to solve well-defined problems both routine and unfamiliar within a familiar context.

An ability to solve well-defined but unfamiliar problems using correct procedures and appropriate evidence.

An ability to deal with unfamiliar concrete and abstract problems and issues using evidence-based solutions and theory-driven arguments.

How should you gather information – and how should you interact with it?

An ability to interpret, convert and evaluate text (manuals, written instructions) and operational symbols.

A critical and synthesis of information; presentation of information using basic information technology.

Well-developed information skills; critical analysis and synthesis of quantitative and qualitative data, presentation skills following prescribed formats, using IT skills appropriately.

How should you be able to communicate?

Ability to communicate information coherently using basic conventions of a professional discourse reliably in writing and verbally.

Ability to communicate critical information using basic conventions of a professional discourse reliably in writing and verbally.

Ability to present and communicate information and your own ideas and opinions in well-structured arguments, showing an awareness of audience and using the professional discourse appropriately.

How independent should you be in their learning?

A capacity to take responsibility for your own learning within a supervised environment. Evaluate your own performance against given criteria.

A capacity to evaluate your own learning and identifying your learning needs within a structured environment.  A Capacity to assist others with identifying learning needs.

A capacity to operate in variable and unfamiliar learning contexts, requiring responsibility and initiative. An ability to effectively interact in a learning group.

Indicate which learning method your credit department would prefer:

.

Face-to-face learning

.

Web-based learning (on-line)

.

Combination of face-to-face and web-based learning

.

Other

.