Local businesses should know how to manage debtors in a proactive manner to identify early warning signs and avoid late payments or bad debts. This, in turn, is conducive to businesses having more time and resources to build solid, long-term relationships with good customers. This was discussed during a conference on Practical Credit Management organised by the Malta Association of Credit Management (MACM).

“Businesses have various needs so it is crucial to establish working capital solutions for them while encouraging growth of sustainable factoring both locally and internationally,” said Pierre Brincat, who was a speaker at the conference and is Business Development Manager at HSBC. HSBC Malta launched Invoice Finance services in 2006. Factoring is a credit management practice to finance, collect and protect business invoices.

Glen Bullivant, a credit management consultant in the UK, explained how to develop and implement an effective credit policy to ensure a healthy cash flow. Marcelline Warrington and Paul Meilak in his capacity as PFS Credit and Operations Manager, both experienced in banking facilities, described how to analyse the credit worthiness of a potential customer and monitor debtors from a practical point of view.

Maltese businesses are in constant competition both to promote and sell their products and services, as well as to collect dues on time. Additionally, credit applications and requests to extend existing credit facilities from traders are increasing as it is the cheapest way to finance purchases or to improve the cash flow of a business. The focus of MACM’s annual conference was on the management of granting or extending these credit facilities while containing the element of risk.