How to manage credit risk
Autor(a) principal: | |
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Data de Publicação: | 2018 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | https://nidisag.isag.pt/index.php/IJAM/article/view/376 |
Resumo: | Purpose: Managing credit risk is crucial for a company’s solvency. Most of the company’s receivables are in credit. Prompt payments are almost insignificant, and the delay of turnover payments has become a tendency, especially with the 2007/2008 financial crisis. Therefore, companies must know how to set individual credit to customers, how to protect from non-payments, how to act timely and how to minimize indebtedness. This paper aims to highlight answers to all this questions.Methodology: This paper deals with the theoretical exposition of credit management, presenting illustrations and explaining how to interpret financial data.Originality: This paper represents a major contribution to the empirical literature and practice of managing credit. An in-depth study of the thematic is provided. We explain all the inputs needed for a future implementation of a customer credit limit, and how the company can manage credit in the way to maximize its value and minimize risk.Findings: Managing credit risk contributes to decrease the company’s risk and to increase its value. Companies may establish credit policies to build relationships of respect and trust with customers. Moreover, it helps to decrease the company’s indebtedness, and to increase liquidity. Finally, a company that control customers’ credit avoids to lose money due to customer’s insolvency. |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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7160 |
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How to manage credit riskPurpose: Managing credit risk is crucial for a company’s solvency. Most of the company’s receivables are in credit. Prompt payments are almost insignificant, and the delay of turnover payments has become a tendency, especially with the 2007/2008 financial crisis. Therefore, companies must know how to set individual credit to customers, how to protect from non-payments, how to act timely and how to minimize indebtedness. This paper aims to highlight answers to all this questions.Methodology: This paper deals with the theoretical exposition of credit management, presenting illustrations and explaining how to interpret financial data.Originality: This paper represents a major contribution to the empirical literature and practice of managing credit. An in-depth study of the thematic is provided. We explain all the inputs needed for a future implementation of a customer credit limit, and how the company can manage credit in the way to maximize its value and minimize risk.Findings: Managing credit risk contributes to decrease the company’s risk and to increase its value. Companies may establish credit policies to build relationships of respect and trust with customers. Moreover, it helps to decrease the company’s indebtedness, and to increase liquidity. Finally, a company that control customers’ credit avoids to lose money due to customer’s insolvency. ISAG – Instituto Superior de Administração e Gestão2018-11-27info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://nidisag.isag.pt/index.php/IJAM/article/view/376European Journal of Applied Business and Management; 2018: Special Issue - ICABM20182183-5594reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAPenghttps://nidisag.isag.pt/index.php/IJAM/article/view/376https://nidisag.isag.pt/index.php/IJAM/article/view/376/pdf_87Lisboa, InêsMiguel, Joanainfo:eu-repo/semantics/openAccess2024-02-20T14:11:16Zoai:ojs.isag.meupt.com:article/376Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T02:39:08.200814Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
How to manage credit risk |
title |
How to manage credit risk |
spellingShingle |
How to manage credit risk Lisboa, Inês |
title_short |
How to manage credit risk |
title_full |
How to manage credit risk |
title_fullStr |
How to manage credit risk |
title_full_unstemmed |
How to manage credit risk |
title_sort |
How to manage credit risk |
author |
Lisboa, Inês |
author_facet |
Lisboa, Inês Miguel, Joana |
author_role |
author |
author2 |
Miguel, Joana |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Lisboa, Inês Miguel, Joana |
description |
Purpose: Managing credit risk is crucial for a company’s solvency. Most of the company’s receivables are in credit. Prompt payments are almost insignificant, and the delay of turnover payments has become a tendency, especially with the 2007/2008 financial crisis. Therefore, companies must know how to set individual credit to customers, how to protect from non-payments, how to act timely and how to minimize indebtedness. This paper aims to highlight answers to all this questions.Methodology: This paper deals with the theoretical exposition of credit management, presenting illustrations and explaining how to interpret financial data.Originality: This paper represents a major contribution to the empirical literature and practice of managing credit. An in-depth study of the thematic is provided. We explain all the inputs needed for a future implementation of a customer credit limit, and how the company can manage credit in the way to maximize its value and minimize risk.Findings: Managing credit risk contributes to decrease the company’s risk and to increase its value. Companies may establish credit policies to build relationships of respect and trust with customers. Moreover, it helps to decrease the company’s indebtedness, and to increase liquidity. Finally, a company that control customers’ credit avoids to lose money due to customer’s insolvency. |
publishDate |
2018 |
dc.date.none.fl_str_mv |
2018-11-27 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
https://nidisag.isag.pt/index.php/IJAM/article/view/376 |
url |
https://nidisag.isag.pt/index.php/IJAM/article/view/376 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
https://nidisag.isag.pt/index.php/IJAM/article/view/376 https://nidisag.isag.pt/index.php/IJAM/article/view/376/pdf_87 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
ISAG – Instituto Superior de Administração e Gestão |
publisher.none.fl_str_mv |
ISAG – Instituto Superior de Administração e Gestão |
dc.source.none.fl_str_mv |
European Journal of Applied Business and Management; 2018: Special Issue - ICABM2018 2183-5594 reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799137441312931840 |