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Credit risk management » What is the credit notation?

The credit notation is a customizable scoring tool of your customers, available on the customer record, tab « Risk report ».

It provides a score out of 10 (10 being best) and a risk category A, B, C or D:

  • Category A - Strong account: company with a balanced financial structure and a flexible cash. It respects its commitments and has a high development potential. Establish a credit limit consistent with the size of this structure and expand your business with confidence by monitoring collection.

  • Category B - Stable account: company with a balanced financial structure without benefit of substantial reserves. The compliance is generally good. Expand your business through credit limits clearly defined while remaining attentive in case of decreased activity or event that could quickly weaken your customer.

  • Category C - Weak account: company with an unbalanced financial structure who has difficulties and / or is poorly managed. The payment of suppliers is often delayed because the cash is tight. Strictly follow the credit limit and secure your bills with guarantees and other appropriate means. This company may be placed in insolvency proceedings (bankruptcy) which risk to cause payment defaults to its suppliers.

  • Category D - Defaulted account or default imminent: company whose financial situation is very deteriorated which cannot meet its commitments. The risk of default is very high. Require payment guarantees if you grant a credit or request a payment in advance (before the delivery).

The result of the credit notation is one of the criteria to calculate the customer's credit limit.

The tool is based on 12 financial, statutory and behavioral criteria that are complementary .

Scoring tool

To use it, just go on the customer sheet, risk report tab, and then click on calculate. It is possible to save the result once the criteria informed and the score calculated.

The calculation (not shown) is made on a total of 600 points. When you enter a bad grade on a criterion, not only the criterion does not report points but it may penalize the final score. To see the details and the setting, click on the Customize scoring criteria

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