Challenge. The client, an executive at an international chemical manufacturing company, was seeking a Microsoft Excel-based tool that he could use to help him better evaluate the credit risk of and issue credit to his company’s B2B customers. He wanted a more rigorous, data-based decision-making methodology to improve the process his credit administration team was currently using.
Approach. After an initial project scoping discussion, the client agreed to a two-phase project involving research into credit risk management and the design of a MS Excel-based credit evaluation tool. I researched and provided the client with an overview of credit risk management theory, official credit risk management guidelines issued by a regulatory agency, best practices suggested by industry practitioners, and several options of commonly used credit evaluation methods including the advantages and disadvantages of each method, all with the purpose of helping my client make an informed decision on the best solution for his situation and needs.
Based on his selection, I then designed and forwarded a prototype of the credit evaluation scorecard for his review and tested the model using sample accounts from the company’s credit portfolio. I delivered the calibrated scorecard, user manual, and management guide, which included a resource for financial analysis and a review of applicable credit risk management support products, all with a focus toward ease of implementation.
Results. The client received a custom-fit MS Excel-based credit evaluation scoring tool that his credit administration team could use to objectively and more rigorously evaluate the credit risk presented by prospective and existing business customers. The client was very pleased with the quality of the work and provided a five-star rating.
Feedback. “Steve did a great job. He [spent] enough time to get the job done to exactly what I needed. He did a lot of research and presented many options for me to make … the best decisions for the project. He went over and beyond to get this done.” – P. Cueva, International Chemical Manufacturing Co.