Risk Management for Account Managers

1
Risk Management for Account Managers

• Peter Brinsley
• International Manager,
• Venture Finance, UK
• Risk Credit Management seminar, Berlin 27-29
  April

2
Defining Account Manager

• Day-to-day contact with the client
• Manages the client relationship
• Manages the risk
• Responsible for maximising reward and minimising
  risk for the factor

3
Qualities of an Account Manager

• Knowledge about factoring
• Knowledge about factoring agreement
• Cautious
• Diplomatic

4
Agenda

• Communication
• Legal aspects and reliance on the Factoring
  Agreement
• Statistics and Analysis
• Wanting out what do you do ?

5
Qualities of an Account Manager

• Assertive
• Decisive
• Good communicator - formal and informal channels
• Different behaviour at different times !

6
Before the start (pre take-on)

• Account Manager is part of the sales process
• Liaise with sales
• Gather full information on the prospect (may not
  all come from Sales)

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Take on

• Meet the clients expectations
• The reality should be what he was sold
• Be vigilant/careful - WHY ?
• First payment is last chance to pull out

8
During the life of the client

• VISITS different types
• Routine - information gathering - relationship
  building
• Addressing Issues - problem solving

9
During the life of the client

• Audits- examining the clients books and
  records- in-house auditors or external ?- how
  often ?

10
Crisis point / exit

• Rely on relationship parameters previously
  established
• Disciplining the client
• Relky on the Factoring Agreement and other
  securities

11
Group discussion

• What do you call the Account Manager
• How many clients do they handle each ?
• Do they specialise in one factoring product or
  many ?
• What does your company expect of them ?
• What do clients expect of them ? - any conflict
  ?

12
Risk Management

• Guard against LOSS- of money- of the client-
  reputation - yours, your companys, the
  industry as a whole

13
Risks the Account Manager should seek to manage

• Funding non-factorable debt
• Funding invalid or false debt
• Getting too close to the client(coming under
  clients influence)

14
Risks the Account Manager should seek to manage

• Change in the client - what he sells - who he
  sells to - personnel changes - outside
  economic changes
• Know when change happens react to it

15
Tools for Account Managers

• Legal tools- Factoring Agreement- Guarantees,
  warrantees and covenants
• Back-office trend statistics
• Software tools such as Risk Factor
• Audit reports

16
Warning Signs

• Financial- debt turn stock turn losses
  liabilities (passiv) gt assets (activ)
• Relationship- ignoring procedures difficult to
  contact change in client behaviour

17
Warning Signs

• Information- unpredictable insufficient
  inaccurate
• Rumours- industry negative news related
  business failures supplier failures

18
Warning Signs

• Tangible signs of change- staff turnover-
  different products being sold- low activity at
  factory- high-living lifestyle