I doubt much has changed since I was a practicing credit manager in that 95% of all our customers or applicants were marginal, only a handful or less then 5% were the "blue chippers". As you know, reading this column, my philosopy towards what we do is to identify the risk and then find a way to minimize it. I have always kept on my desk, even today, a small plaque that says "Find a way to make it happen, for the customer".

The first step is to obtain as much information as possible about the applicant. Once that is done identify all the reasons "for" and all the reasons "not" to sell on credit. If the "not" outweigh the "for" then we want to share the information with others in our organization such as sales or upper management. Often times others can assist us in making the right decision for the organization.

There is an old credit myth that says credit information is confidential and should be closely guarded. Well, I do not disagree entirely but we must keep in mind whose information this belongs to. It does not belong to us or the credit department it belongs to our organization and they have every right to see what we are looking at to make our decisions. Just as we expect sales to provide us all the necessary information to evaluate the applicant, sales is entitled to all the information we used to reach our conclusion.

If there is fear that a non credit person will breach the confidentiality in which the information was obtained then simply delete the source of the information (other creditors name). With respect to credit reports those are considered to be public information sources and there is no problem with others in the organization reading those reports.

Experience has proven that an informed salesperson or management member is an ally not an opponent. Only when they are not fully exposed to the facts do they become agressive or hostile.

In the next column we will explore the many "tools" that are available to us to minimize the risk in providing open account terms.

I wish you well.