1. Recognition of ‘Best Practice’ in Credit Management ICTF International Credit Professionals Symposium Amsterdam 14th to 16th April 2013 Chris Sanders MICM Head of Accreditation – QICM UK Institute Credit Management ICM Corporate Partners

2. Contents • QICM - What is it? • The QICM Process & Criteria • Some of the QICM Companies • International QICM with • QICM Best Practice Examples • Stated Benefits of QICM • Plans for QICM 2013 • My Contact Details

3. QICM Outline • ICM’s Accreditation Process for Credit Management and related functions • Covers 6 Specific Areas: • Credit Policy • Compliance • Customer Services • Personal & Professional Development • Performance Measurement • Stakeholder Management & Roadmap • Companies have to demonstrate they meet a minimum standard of ‘Good/Best Practice’ in Credit Management • If successful a company is awarded QICM Accreditation and retains the award for 2 years when it has to be renewed • 29 companies have QICM Accreditation with a number at various stages of implementation…such as Nick King and his team at Travis Perkins • Investment structure based on size and complexity of the client

4. QICM Criteria • Credit Policy • Do you have a written credit policy? • Is it signed by the senior management? • Does it cover all relevant aspects of the departments activities? • How is it updated and reviewed and how often? • Compliance • What is the legal and regulatory framework within which you have to operate? • What is the evidence of training of staff to ensure compliance? • How is compliance audited how are non-compliances monitored?

5. QICM Criteria • Customer Services • How are customer requirements and satisfaction measured? • Are Credit Management & Billing included in customer satisfaction survey? • How are queries and disputes measured and tracked to resolution? • Do you have regular meetings with Customer Services to resolve and progress debt in dispute and customer queries. • Personal & Professional Development • How many people in your organisation are members or studying for ICM qualifications? • Are new staff trained and inducted and what is the process? • Does everyone have a PDP linked to Performance Reviews/Appraisals? • How often are the staff reviewed and how do you identify training needs?

6. QICM Criteria • Performance Measurement • Are there a set of objectives and targets and do they align with the Credit Policy? • Are objectives and targets set to improve the effectiveness and efficiency of the Credit Department? • Are appropriate KPIs gathered regularly? (A ‘Dashboard’) • Is success celebrated and recognised? • Are there regular account reviews with Sales, Customer Services

7. QICM Criteria • Stakeholder Management & … • When was the last time you presented to the Senior Management Team or the CEO on Credit Management, results, targets and plans? • Do you have a regular slot on the Sales, Customer Service, Marketing Leadership Team agendas? • Do sales REALLY understand what you do what your targets are and the policy within which they operate? • … Roadmap • What part does credit play in the development of the business Strategy and objectives? • What are your plans for the Credit Function for the next 3, 6 , 9, 12, 24 months? • How are these plans developed and communicated to the business? • What are your plans for continuous improvement?

8. Some of the 29 QICM Accredited Companies • qicm@icm.org.uk

9. Now Underway! International QICM • Objectives: • Provide International recognition of ‘Best Practice’ in Credit Management • Improve standards and awareness of excellence in Credit Management • Create a network of International Companies who share ‘Best Practice’ • Approach: • Assessments performed by Senior Credit Management Professionals • Mixture of document reviews, conference calls and site visits • Recommendations of accreditation ratified by senior officers of the ICTF • Deliverables: • ICM& ICTF branded reports, awards and certificates • Accreditation renewed every 2 years • Awards presented at ICM or ICTF events where possible.

10. QICM Best Practice - Process Credit Strategies • Actions • Based on measure, understand what levers need to be pulled to ensure that the measure stays within the tolerances • Management of debtors reduction of overdues • Managing the quality of customers • Managing margin • Start to forecast trends to identify potential issues and take action early Outcome by Segment • Acceptable DSO levels • Acceptable levels of Overdue • Acceptable risk ratios and profiles • Acceptable levels of receivables and ERR • Acceptable write-offs (I.e. loss ratios % revenue) • Potential sales growth as a result of the strategies

11. QICM Best Practice - Process • DSO Drivers • Identify current bottlenecks and potential solutions in each area from DSO analysis • Agree with functional managers work stream treatment and required step change • Formulate an action plan in each case providing a phased DSO reduction to Year End • Coach the functional heads to manage the work streams and resources to timetable

12. QICM Best Practice - People • Measurement of Capability • 360° Feedback…manager, staff & role requirements • Identifies training needs and suitability for transfer • Training Tool for Credit Management • Designed and developed by 2 credit managers • Training tool for Credit Controllers and Team Leaders

13. QICM Best Practice - People • Teamworking & Targets • ‘Morning Boards’ help communicate plans • Reward & recognition every day • Targets vs. Actuals daily • Teamworking for Achievement • Set an unachievable target & fail spectacularly! • …or set a bigger one a year later! • Short Term or Long Term • Cross Functional Working

14. QICM Best Practice – Stakeholder Management & Roadmap • Roadmap • Continuous Development & Improvement • Clear direction for the function & business • Stakeholder Management • Communication to the business • Building awareness and communication

15. QICM Best Practice – Systems • Cash Allocation ‘Best in Class’ • Significant Automation of process • Improvements in speed and accuracy • Diallers in ‘The Cloud’ • Reduction in costs of implementation • Wider availability to smaller teams

16. QICM Accredited CompaniesStated Benefits • Reduced Internal Audit Activity • Reduced External Audit Activity • Reduced Premiums for Credit Insurance • Able to bid for government tenders since accreditation • Obtained new business since trade press articles • Improved debt and cash performance since accreditation • Improved Internal Recruitment from finance • Keeps the department focussed on quality and performance improving results & customer service • Improved credit controllers confidence when dealing with sales and other stakeholders • Significantly improved the awareness of good credit management across the business “I must say that I have really appreciated the whole QiCM experience. It is not just an accreditation it is the opportunity to discuss future direction, options and share ideas with a fellow professional.” Paul Brooker, MICM (Grad)- Ecclesiastical Insurance

17. Plans for QICM in 2013 • ICM White Papers on key business issues launched at the QICM Best Practice Conference 3 already available on ICM Website (www.icm.org.uk): • SEPA (Single European Payment Area) – ICM’s Implementation Toolkit • Paperless DD & AUDDIS (Automatic DD Instruction System) • SEPA (Single European Payment Area) – Newsletter Update • ICM White Papers on each of the 6 QICM Criteria • QICM Guide to Credit Policy White Paper now available • International QICM now available endorsed by ICTF • QICM ContinuousImprovement Scorecard with Mid Term Reviews introduced through client pilot 2013 • QICM Best Practice Conference #2 • Best Practice Library & Best Practice Network for QICM Companies and those companies in the process of QICM Accreditation • QICM Conference Event Presentations and Sharing Best Practice examples QICM Best Practice Conference 18 September 2013 Central London • Planning Underway • 125 places available • Invitations from July 2013

18. Recognition of ‘Best Practice’ in Credit Management Chris Sanders MICM Head of Accreditation – QICM chrissanders.qicm@icm.org.uk +44(0)7747 761641 @chrisQICM Also on QICM_ICTF_NL_20130414_15_16.ppt ICTF International Credit Professionals Symposium Amsterdam 14th to 16th April 2013 ICM Corporate Partners