By a staff reporter
THE need for a proactive approach to credit management if companies want to be viable and competitive in the marketplace, was emphasised at a financial conference in Dubai yesterday.
Talal Abu-Ghazaleh, president, Arab Society of Certified Accountants (ASCA), and chairman, Talal Abu-Ghazaleh International (Tagi), observed that passive or reactive credit management is ineffective today.
In his keynote address at the ‘Credit control and debt management’ conference, Abu-Ghazaleh said the mission statement of every company’s overall strategy should be a formalised approach tomaximizing cash flows and optimising credit operations.
He said traditional techniques of credit management are no longer the order of the day. Instead, techniques like ‘credit scoring’ are in vogue these days, which help reduce costs, allow banks to use fewer people to process loans, and reduce the likelihood of a loan default
“Therefore to rub shoulders with progressive credit managers one needs not only to be cognizant of such innovative techniques, but in fact, master them,” said Abu-Ghazaleh.
The two-day conference is being organised by IBC Gulf Conferences and features presentations by credit control experts. N. Radhakrishnan, regional finance manager, Coca-Cola Gulf, spoke on effective debt and receivable management.
Abbas Ali Mirza, director, professional development, Tagi, highlighted the evolutionary trends in financial analysis and debt management. Smita Tamhane, chief credit analyst, Lloyds Bank Plc, discussed customer’s credit worthiness and effective techniques.
Barry J. Epstein, senior partner, Checkers, Simonand Rosner, focused on continuous assessment systems and flexible credit scoring; and establishing a customer profiling system for credit control. His other paper was on paying the price of success, determining working capital needs to support planned revenue growth.
The role of credit rating agencies in the Middle East was detailed by Hazim Al Dalli, general manager, IARC, and Peter Monro, senior analyst, IB-CA. Arun Kumar, financial controller and internal operations auditor, Awal Plastics, dwelt on how companies can effectively manage hidden credit to reduce cost and increase cash flow.