AICDP International Diploma in Credit Management

AICDP International Diploma in Credit Management

The very best way to ensure the quality of your debtor’s ledger is to have passionate, motivated, knowledgeable and educated credit professionals looking after it.

Hundreds of students have completed the AICDP International Diploma in Credit Management and have gone on to add value to their companies by having what they need to perform at a new level of excellence.

The AICDP International Diploma in Credit Management is a practical course that includes four subjects: Credit Management, Collections, Credit Risk Assessment and International Credit. It runs over two fifteen-week terms with two subjects per term. It is delivered through Blended Learning, so you can study the material at your own pace. The material can be put into practice immediately and gives a blueprint as to what the credit function can deliver to the business.

Throughout the course, students get valuable insights into everything that should be done from Credit Assessment, Risk mitigation, Administration and required controls to the correct way to collect what is owed in full and on time, while maintaining a commercial focus.

Credit management should be a positive pro-business function, that focuses on maximising the profitability of the company. The Diploma contains all the information that enables students to do this, and more.

Most of our students are experienced credit professionals who have been in the role for many years, and they still benefit from the systematic approach and deep insights that the course gives them and helps to focus on the concept of “Right first time – every time.” They also get the added value of a recognised qualification to add to their CV.

The course comprises a number of short tests, assignments undertaken throughout the term and there is an online written exam in each subject at the end.

In addition to the knowledge, students really value having a recognised qualification from AICDP, an International Association that operates in many countries around the world. Students become members of AICDP and have access to a global information source.

On successful completion of the Diploma, students can go on to do their Advanced Diploma in Credit Management, this is run over one intensive 15-week term and focuses on the Management of Credit. The three main areas are: Managing yourself, managing your people and managing the function.

The next term for the AICDP International Diploma in Credit Management begins on the 22nd of June 2024 with a Saturday morning Zoom meeting at 10am, that explains how the course works and what is involved. The session is recorded, and the link shared after the event to all.

The Advanced Diploma begins on the 27th of April and the 28th of September 2024.
If you want more details, please follow this link: https://share.hsforms.com/1H9cDdhqiTdO63su4fKxN_g1iuqt

AICDP Welcomes ICMT (Irish Credit Management Training) as National Certificate and Diploma Partner

 

 

 

Declan Flood

The Balance Between Managing Risk and Supporting Revenue

The Balance Between Managing Risk and Supporting Revenue

One of the most under-appreciated aspects of Credit Management is the balance between managing risk and supporting revenue.  I specifically say “managing” the risk instead of “minimising” the risk.  Minimising is easy;  put all of your debtors on 100% hard security or ask for cash in advance;  your risk potential will be nil.  However, you will not receive any thanks from the commercial side of the organisation if you adopt this policy as it is virtually impossible to grow revenue on this basis.

Credit Management, whilst having a definite scientific aspect;  formulas, ratios, statistics, et al, is also a delicate art form in terms of the range of issues with which we deal as well as the tact required in various scenarios;  both with customers and key stakeholders.

Credit Management “in a bubble” is relatively easy and is mostly based in common sense;  if a customer is late with a payment, over their credit limit or is considered a high risk then you can withhold new orders, reduce their credit line and/or ask for cash in advance or another form of 100% hard security or terminate them as a customer altogether.

Credit Management within the context of a commercial organisation is much more of an art form where we are required to balance the growth & revenue driven aspirations of the business vs the need to protect your company’s debtor asset.

In this recent era of increasing number of business insolvencies, squeezed cash flow, weak balance sheets and P&Ls, timing has also become a crucial factor for Credit Professionals to consider as to when to “drop the hammer”.  What I mean by this is that in instances where a customer’s risk portfolio has increased either due to a deterioration in their financial situation and/or payment performance and the inevitable failure of their business looms, the timing of when to exit that business becomes paramount.  Exit too early and the customer survives (and potentially even thrives), then you are seen by your company as too risk averse and “not commercial”.  Exit too late and you are left with a potential credit loss and the extra and pain staking debt recovery workload.

In my career, I’ve had customers which, on paper, have either been on the brink of failure or should have failed long ago but have have limped on for years and years after the statistical model suggested that failure was imminent.  If my department had exited when the risk models / scorecards suggested failure, my company would have lost out on significant revenue and profit.  However, by managing the risk, developing an exit strategy as well as execution of the timing of said strategy, meant that my company could continue to trade with the customer and realise additional revenue and profit opportunities.

This delicate form of Risk Management and timing is definitely an art form more than it is a science and is generally not recognised as a specific skill set by those outside of the Credit profession.   It is not an easy skill to acquire nor is it a linear learning;  it’s a matter of experience, business nous, the ability to “read between the lines” and sometimes good old fashioned luck !  In these difficult market conditions, this skill is becoming more and more crucial for the Credit Professional to possess and will be vital in your business’s overall success.

“There is an art to science and a science in art; the two are not enemies but different aspects of the whole”. – Isaac Asimov

Focus and Fatal Distractions

Focus and Fatal Distractions

At a recent seminar I thoroughly enjoyed a presentation by two young and recently appointed Credit Managers talking about the job of a Credit Manager and the place and purpose of the Credit function within the enterprise. They split the presentation into three sections.

1. Collection Management.
2. Risk Management.
3. Peripheral External Issues affecting the company.

Their strong conclusion and recommendation were that their order of their priority of focus should be exactly this and there should be no deviation from the order. I totally agree with this approach, and it should be regarded as a cornerstone of any successful organisation. Over the years when conducting High Performance Credit Workshops, early in the methodology we undertake an exercise to articulate the purpose of Credit and Collection and do so in as few words as possible. From its’ first iteration to its last it has remained.

Maximise Collection and Manage Risk
This is why Credit and Collection Managers are hired and Credit and Collection Departments are created.

The Distractions
As time passes, events occur, laws are passed and technologies emerge, that in the main are external but are often touted as the number one priority, challenge or next big thing for the Credit Professional. We are encouraged to divert resources, hire consultants, make plans and horror of horrors make this “flavour of the month” our number one priority. Whilst not wishing to diminish the importance of any, or suggesting they should not be managed they have to be firmly placed in category 3 of the focus hierarchy.

Although not exhaustive these are some examples of my experience in this regard.

1999 The Millenium Bug
Perhaps the biggest damp squib of all as during the year vast resources were allocated, contingency plans were drawn and we became extremely worried. In the event at midnight on 31 st December precisely nothing happened! We  journeyed into the new millennium with our systems intact and working. Also, to my certain knowledge no aeroplanes fell out of the sky.

2002 Sarbox
This was a much-needed piece of legislation but there was minimal effect post sale within Credit and Collection. American Corporations became compliant to the point of paranoia and were more difficult to deal with pre-sales. It has since retreated into our everyday business life and remain part of our consciousness.

2008 The Credit Crunch
For me, this has been the most significant event in our recent professional history and the most relevant. When we cut through the chaff, the key to our successful navigation of these waters is that we have doubled down on Category 1 and 2 of our focus parameters.

2009 Crypto Currency/Blockchain
In my view, the biggest and most inappropriate distraction, it remains on the edges of our core work but the impact did not come close to the hype.

2012 Grexit from the Euro
This was closer to the core of our activity than other distractions as we had to establish planned. These included retrospective security measures like use of consignment stock, ROT planning and the use of agents. We had the additional worry of contagion to Portugal/Spain and possibly Italy but in the end, exit did not occur and we were relieved. The situation was managed and managed well but remained firmly within Category 3 of our focus.

2016 Brexit from the E.U.
This was a seismic event with far reaching effects but from an International Credit and Collection operational point of view it pretty much resulted in business as usual. The side effect for the UK itself was, I believe that it accelerated a trend started in the 1990’s that large SSC’s moved to more favoured destinations like Eastern Europe, Ireland, Asia and the Far East.

2018 GDRP
I personally, have reservations about GDRP but understand why it’s there. It’s now embedded in what we do and it has to be respected and complied with. We also need to manage it strictly as a Category 3 focus.

2019 Covid19
I do not regard Covid19 as a distraction as this would be disrespectful of the magnitude of this human catastrophe and the millions of lives lost or shattered. I was not affected directly and suffered no losses to my immediate family for which I am grateful.

On the question of it’s effect on operational Credit Management, we were still required to maintain Cat 1 and Cat 2 focus but had to it from different places, namely home or office. As a profession we dealt with this change with great skill and inventiveness but the ebb and flow between home and office continues to be debated. Another area that we have had to keep to the forefront of our minds
is incremental risk accruing to economic sectors more effected than others, notably Hospitality.

1950’s to Present ESG
At the start of this article, I said that I was writing it after being inspired by a presentation made by two Credit Mangers but when discussing ESG, I am responding to another presentation that I witnessed on ESG alone, which did not inspire me at all. At the outset the presenter, who was not a Credit Manager promoted the notion that “the absolute first priority of every Credit Manager was to manage and promote ESG” In view of all of the aforesaid I find this statement is ludicrous. ECG is noble and worthwhile and should be regarded as a set of aspirational goals for the Enterprise to be achieved over time and is evidenced by the lengthy timeframe of its’ evolution. ESG should be led by the enterprise and inspired by the enterprise within which Credit and Collection will play its’ part as Cat 3 focus.

Our future
As a credit professional it has been of continuing comfort to me over my career that our PURPOSE is clear and unambiguous and our hierarchy of FOCUS is such that it equips us to deliver our obligations to the enterprise. Our history tells us that we will remain able to address future challenges.

Bill Dunlop President AICDP

March Newsletter 2024

March Newsletter 2024

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