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A Simple Credit Evaluation Checklist
Published by slang March 23rd, 2006 in Credit ManagementCLICK THIS TO GO TO MAIN PAGE ON ALL ARTICLES ON CREDIT MANAGEMENT/CREDIT CONTROL
Append below a simple credit evaluation checklist:
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What Do We Evaluate
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What Do We Look For |
Sources of Information |
| Who are the directors |
Director(s) name & Identification or Passport |
Form 49 (Malaysia) - filing in Registrar of Companies |
| Majority shareholders |
Is this a subsidiary of a more reputable company? (Can we also get a Corporate guarantee?)Is it linked to holding or associated companies that have very bad credit status in the market? | Form 24 (Malaysia) - filing in Registrar of Companies |
| Size of company |
Total number of employees Annual Turnover |
Credit Application Form |
| Type of company |
(a)Legal Constitution: Sole proprietorship, partnership, private or public listed status, (b)Holding company/Associated/Subsidiary |
Credit Application Form |
| Trade Reference |
Fellow companies that we know that we can called to ask, Any names of reputable suppliers that are presently giving credit to the applicant, |
Business Trade Reference, Association of Credit Bureau. |
| Credit Rating/Monitoring Agency |
Bankruptcy Winding Up Petition |
Registrar of Companies |
| Capital Authorised Paid-up |
Too “little” capital re: overtrading (against its sales) | Audited Financial Statements and Annual Returns |
| Ability to pay |
Net Tangible Assets Quick Asset Ratio Current Asset Ratio |
Audited Financial Statements |
| Viability of Company |
PBT | Audited Financial Statements |
| Collection Period |
Average Debtors day | Audited Financial Statements |
| Payment Period |
Average Creditors day | Audited Financial Statements |
| Guarantee Available |
Corporate guarantee Personal guarantee Joint & severally Bank guarantee |
Credit Application Form showing type and shareholding status |
| No. of years trading |
Date of Incorporation Date of Commencement of business |
Credit Application Form |
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