SlideShare a Scribd company logo
Paul Taylor CMgr FCMI MCICM
 Paul Taylor – Chartered Manager & Credit Geek
 Head of Credit & Risk – Top 100 company
 22 years experience spanning various industries
◦ FMCG
◦ Telecommunications
◦ Freight/Logistics
◦ Security/Fire
◦ Retail Operations
◦ Construction
 Fellow of the Association of Credit Professionals
 Fellow of the Chartered Management Institute
 Member of Advisory Council for CICM & VC NI Branch
 The Business Dictionary says…
◦ A choice made between alternative courses of action in a
situation of uncertainty.
 Wikipedia says…
◦ … regarded as the cognitive process resulting in the selection
of a belief or a course of action among several alternative
possibilities.
 Dictionary.com says…
◦ The act or process of deciding; determination, as of a question
or doubt, by making a judgement:…
What type of decisions do you
find hard to make?
 Customer trading since 31st July 2001
 Usually pays on time / <30 days
 Requested more time to pay Sept A/C
 Premises being renovated
 Do we supply?
Scenario 1
 Customer has 2 accounts
 1 TO £13k pa @ 10% margin
 2 TO £36k pa @ 8%
 1 pays within terms
 2 is always late
 Do we stop 2?
Scenario 2
Write down the factors to consider
when making:
• Risk/Credit decisions
• Commercial Decisions
Risk / Credit decision Commercial decision
Payment Performance
Agency Credit Score
Agency Credit Limit
Payment method
Payment terms
Returned payments
Previous outlet performance
Trade reference(s)
-
Length of time trading
Volume of sales
Value of sales / Margin
Risk vs. reward
Reps knowledge
Sales growth / Appetite
-
 Your mood
 Your emotions
 Past experience
 Time/workload
 Sleep/being tired
 Cognitive biases OR Overthinking
◦ Belief
◦ Hindsight / Reluctance
◦ Omission / Inclusion
 3 C’s apply equally to New & Existing accounts
◦ Collateral
◦ Capacity
◦ Character
◦ 4th, quite unique
Do they have assets to realise in a debt situation?
Do they have the liquid funds to pay?
Are they likely to want to pay if they can?
– Controlled Greed
Commercial Decision Making 2019

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Commercial Decision Making 2019

  • 1. Paul Taylor CMgr FCMI MCICM
  • 2.  Paul Taylor – Chartered Manager & Credit Geek  Head of Credit & Risk – Top 100 company  22 years experience spanning various industries ◦ FMCG ◦ Telecommunications ◦ Freight/Logistics ◦ Security/Fire ◦ Retail Operations ◦ Construction  Fellow of the Association of Credit Professionals  Fellow of the Chartered Management Institute  Member of Advisory Council for CICM & VC NI Branch
  • 3.  The Business Dictionary says… ◦ A choice made between alternative courses of action in a situation of uncertainty.  Wikipedia says… ◦ … regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities.  Dictionary.com says… ◦ The act or process of deciding; determination, as of a question or doubt, by making a judgement:…
  • 4. What type of decisions do you find hard to make?
  • 5.  Customer trading since 31st July 2001  Usually pays on time / <30 days  Requested more time to pay Sept A/C  Premises being renovated  Do we supply? Scenario 1
  • 6.  Customer has 2 accounts  1 TO £13k pa @ 10% margin  2 TO £36k pa @ 8%  1 pays within terms  2 is always late  Do we stop 2? Scenario 2
  • 7. Write down the factors to consider when making: • Risk/Credit decisions • Commercial Decisions
  • 8. Risk / Credit decision Commercial decision Payment Performance Agency Credit Score Agency Credit Limit Payment method Payment terms Returned payments Previous outlet performance Trade reference(s) - Length of time trading Volume of sales Value of sales / Margin Risk vs. reward Reps knowledge Sales growth / Appetite -
  • 9.
  • 10.  Your mood  Your emotions  Past experience  Time/workload  Sleep/being tired  Cognitive biases OR Overthinking ◦ Belief ◦ Hindsight / Reluctance ◦ Omission / Inclusion
  • 11.  3 C’s apply equally to New & Existing accounts ◦ Collateral ◦ Capacity ◦ Character ◦ 4th, quite unique Do they have assets to realise in a debt situation? Do they have the liquid funds to pay? Are they likely to want to pay if they can? – Controlled Greed