15-Credit Limit and Enquiries Trend (Download History)
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Introduction of Credit Management for Overseas Trade

36 Things You Need to Know About Credit Management for Overseas Trade

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15. Credit Limit and Enquiries Trend (Download History)

Credit Limit and Contract Limit are described next to the credit rating of CS. There are many business information reports describe credit limits, but there should be no report that describes contract limits other than Creditsafe.

 

What is the difference between the credit limit and the contract limit?

The credit limit is the upper limit of the balance in general trade receivables and the credit remaining. It is calculated by CS original algorithm. A company that manages overseas customers with credit limits can use its limit as a reference.

 

On the other hand, the contract limit is a numerical value given as a yardstick for the maximum contract capacity for a single contract over 12 months period. The contract limits are calculated as a percentage of turnover. Regarding credit limit, the history for one or two years is also displayed, so changes can be seen.

 

Another unique item is the Enquiries Trend (download history).

 

It is generally believed many suppliers place inquiries to credit reporting agency for a customer with high credit risk. The number of inquiries rapidly increase one month before bankruptcy when the customer goes bankrupt. Enquiries trend is the download history that "visualized" the history of inquiries to the subject company by graph. The number of downloads of the concerned company's reports by 100,000 CS customers has been shown for the period of one year.

 

If there is a company whose number of inquiries has been increasing rapidly in a short period of time, it means that many companies are uncertain about the subject credit risk, so be cautious.

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【PDF】Introduction of Credit Management for Overseas Trade

Introduction of Credit Management for Overseas Trade

36 Things You Need to Know About Credit Management for Overseas Trade

This ebook was created as a resource for those who have trouble with diverse trading or want to learn Credit Management in a rational.

 

Chapter (Excerpt)

  • Major Differences Between International and Domestic Transactions 
  • Trade Reference
  • Bank Reference
  • Collection Agency
  • Reasons Behind Difficulty in Recovering Delayed Debts
  • Mistakes in International Transactions Where Japanese Companies are Prone to Fail
  • Customer Analysis ~ 5 C's of Credit
  • Dangerous Signs
  • Five Principles of Debt Collection