Dun & Bradstreet’s data and proprietary analytics confirm that millions of companies globally have been impacted by the coronavirus outbreak. These companies constitute over 900 of the Fortune 1000 companies. Most companies are unaware of their true risk exposure. Dun & Bradstreet can help you gain insight into corporate family relationships and hidden, cascading counterparty risks from their downstream relationships.
To prepare for potential impacts on global business credit, we are advising that companies re-evaluate their credit policies to ensure they are:
Onboarding an Appropriate Balance of Risk – A prolonged period of economic prosperity and minimal bankruptcies may have influenced the day-to-day credit policy approach, allowing more risk into the portfolio than would be prudent in a slow-growth or recessionary economy. Reassess your company’s credit policy to recalibrate the portfolio risk profile for new and existing customers.
Setting Proper Credit Limits – Use this opportunity to realign credit limits. Make sure they are informed by the credit exposure you have for the entire global corporate hierarchy for that customer. Consider adjusting credit limits (up and down) based on the individual risk assessment of that customer.
Establishing Appropriate Terms – Evaluating the potential risk of each new opportunity or customer renewal will help realign your credit terms based on the probability the customer will pay on time and within terms.
Monitoring Portfolio Risk – Perhaps more urgently, I advise to also consider deploying credit risk monitoring of the entire global portfolio to pick up on pockets of weakness that could result in bad debt losses from potential bankruptcies.
For additional information on how Dun & Bradstreet can help you make decisions on new credit applications instantly, standardize your credit review processes, conduct advanced portfolio and account analysis, and manage your account portfolio more effectively, please see the enclosed D&B Portfolio Risk Manager for DNBi brochure.