THE BETTER WAY TO MANAGE CREDIT RISK

Pundits, including credit insurers, expect a significant increase in business insolvencies in the coming months - and they think there will shocks and surprises in the quality of companies that fail. At the same time credit insurers are reducing the cover available to their customers. In Co-pilot’s view, while credit insurance has a positive role to play in mitigating bad debt, it is important to remember that insurance is an “after-the-event” solution – and cover will not be in place if it has been withdrawn or policy conditions not met.

The Co-pilot view is that a better way to control bad debt is through a pro-active “before-the-event” approach to two key areas of credit management - credit risk management and cash collection. Both tasks are becoming more challenging. Tracking credit risk in this environment requires a stronger focus on current as well as historic information, and customers generally are taking longer to pay.

Many Companies are unaware that powerful and inexpensive web-based tools are now available to improve performance substantially in these two key areas. These tools systematically score and monitor the payment performance of every single customer - the best possible early warning system. Typically, cash collection tools enable companies to reduce collection costs by 20% and can significantly shorten DSO (Days Sales Outstanding) – depending upon the starting point. A shortened DSO reduces bad debt and has a significant additional impact on the bottom line. For a company with annual sales of £100 million, paying 6.5% interest, a five day reduction in DSO generates an improved cash position of £1.37 million with an annual interest saving of £89,041.

For companies that use credit insurance, these tools are used to automate compliance with insurers’ policy conditions - thus significantly reducing the non-compliance risk. Thus “after-the-event” planning becomes integrated and strengthened.

ENDS

For further information about Co-pilot Ltd, please contact:

Simon Marshall	+44 (0)20 7749 9122
Email:	simon.marshall@co-pilot.co.uk

Notes to Editors
Co-pilot specialises in receivables risk management. Its "integrated approach" focuses on web-based credit management tools to support the key elements of the receivables management function:

• Credit risk management
• Cash collection
• Receivables funding

Co-pilot partners clients who wish to achieve or maintain excellence as an integral part of their enterprise risk management and business development strategies.

GRAHAM KENT APPOINTED CHAIRMAN OF CO-PILOT LTD

Co-Pilot Ltd, the receivable risk management specialists, has appointed Graham Kent to the position of Chairman of the company. The appointment is from Monday 3rd November 2008.

Graham Kent is a well known figure in the UK and European finance sector having held directorships in companies involved in credit insurance, debt collection, information and invoice discounting and factoring, with management experience of operations, underwriting, and group finance at plc level.

Graham brings his experience in the development of strategy, specifically in credit insurance and other receivables management services, to Co-pilot at a pivotal stage in the company’s future. There are enormous opportunities for Co-pilot in the current financial climate when companies have a critical need to assess both their receivables risk and their risk transfer strategies.

As Graham reports ‘In this financial climate every company needs to get fast, accurate and detailed credit risk profiles of every single customer across every ledger every day in order to trade with confidence in the future. Co-pilot has the tools, services and experience to help’.

Co-pilot has developed a range of inexpensive web-based credit management tools which ‘bolt on’ to most proprietary and tailor-made accounting systems to make sure that companies achieve the best available early warning of customer credit problems by systematic scoring and automatic monitoring of payment.

The Co-pilot website (co-pilot.co.uk) gives full details.

ENDS

For further information about Co-pilot Ltd, please contact:

Simon Marshall	+44 (0)20 7749 9122
Email:	simon.marshall@co-pilot.co.uk

Notes to Editors
Co-pilot specialises in receivables risk management. Its "integrated approach" focuses on web-based credit management tools to support the key elements of the receivables management function:

• Credit risk management
• Cash collection
• Receivables funding

Co-pilot partners clients who wish to achieve or maintain excellence as an integral part of their enterprise risk management and business development strategies.

THE DEEPENING CREDIT CRISIS AND THE IMPACT UPON ACCOUNT RECEIVABLES MANAGEMENT

Financial commentators agree that the deepening credit crisis is leading to a global tightening of lending conditions. This poses considerable challenges for Account Receivables (AR) management as:

• Customers look to their suppliers for finance by taking longer to pay
• Customers are at an increased risk of failure through reduced liquidity
• Companies’ own ability to finance their receivables may be stretched

Credit managers must adopt a rigorous and systematic approach to AR management to significantly improve performance in all these areas. However, implementing this can be difficult as few accounting systems have excellent, or even good, AR functionality and the vital enhancements to a system often run into budgetary, resource, software-development and time constraints.

Co-pilot has a range of inexpensive web-based credit management tools which ‘bolt on’ to accounting systems to help companies:

• reduce or avoid bad debt
• shorten the cash collection cycle
• improve the cost of funding
• achieve major cost savings at the same time

The Co-pilot website (www.co-pilot.co.uk) gives details of these web-based tools and features a cost-savings calculator where users can input their company’s figures for an estimate of the savings to be made with this technology.

For further information about Co-pilot Ltd, please contact:

Simon Marshall	+44 (0)20 7749 9122
Email:	simon.marshall@co-pilot.co.uk

Notes to Editors
Co-pilot specialises in receivables risk management. Its "integrated approach" focuses on web-based credit management tools to support the key elements of the receivables management function:

• Credit risk management
• Cash collection
• Receivables funding

Co-pilot partners clients who wish to achieve or maintain excellence as an integral part of their enterprise risk management and business development strategies.

CO-PILOT ANNOUNCES INVOICE TO CASH ENHANCEMENTS

Dynamic Report Builder - a tool for composing your own reports
Select your data items, create run and export management reports – as regular reports or “one-offs”. This tool enables users to make and view tailor-made reports online, which means anytime, anywhere.

Customised dashboards
Choose descriptions, measures, KPIs and graphics to tailor-make content and style of dashboard for users at all levels

Enhanced profile management
Use “drag & drop” to set up or change profiles (preset collections processes) more easily

Licence monitoring
Licences can be transferred if someone leaves or is absent and the former employee cannot access the system

Simplified To-do screen
The To-do screen highlights a user’s work stream and enables them quickly to process profile actions by generating batches of dunning letters and

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WHAT DIFFERENTIATES THE BEST CREDIT MANAGEMENT PRACTICE FROM THE MERELY GOOD?

Co-Pilot, the consulting and broking house specialising in receivables risk management, has found that credit managers believe that harnessing the latest technology is crucial to accessing and managing credit risk information. Through better use of analytical and predictive tools, credit managers can increase the efficiency and accuracy of credit information to help manage risk and improve overall business results.

This challenge was one of a number identified during Co-pilot's workshop at the recent Institute of Credit Management conference in Warwick. Leading credit managers were asked to discuss the challenges and opportunities that face credit management today.

The workshop was presented at the "Reasons to be Careful" event by
Simon Marshall of Co-pilot. Mr Marshall said that credit managers had been positive about the challenges and that feedback had been constructive.

Challenges were identified as:

• Securing management buy-in to enable change
• Placing credit management at the heart of the business, aligning with sales and marketing, and thereby raising the profile of credit management
• Harnessing latest technology to access and manage credit risk information across the organisation's activities
• Better use of analytical and predictive tools to improve overall business results

Mr Marshall continued: "We also wanted to establish what differentiates the best credit management practice from the merely good. Credit Managers were clear that this revolved around contribution to the business strategy, encouraging open thinking, effective team management, good communication and influencing skills and the efficient use of information"

He commented that that the conference findings mirrored Co-pilot's own philosophy and approach, and he therefore felt encouraged for the future.

Mr Marshall said. "Those organisations that achieve best credit management practice obtain competitive edge, strategic flexibility and enhanced governance. This journey should involve effective cross-functional dialogue between Credit, Sales, Marketing, Finance and Treasury"

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