Free Online Course in International Business

Knowledge Statement

Knowledge of Costs and Value of Credit Reports

Activity

You have received an order for US$750,000 from a new customer.  The customer has requested open account payment terms of Net 90 Days on Invoice Date.  Having no prior experience with this customer, you need to conduct a credit investigation before you extend payment terms.  

1.                     Identify the cost of a credit report from three different agencies as listed in the resources.

2.                     Compare and contrast and the characteristics of the credit report and determine the best investment to make in order to decide on payment terms for your new customer.

3.                     Discuss the other information you might need to grant payment terms.

To vary the activity, divide the class into groups or have each individual research the cost and characteristics of credit reports from different countries assuming the customer is based there.

Assessment

1.                     Evaluation criteria used to assess credit report sources include

a.      only speed.

b.      source of the information.

c.       language the report is written in.

d.      speed & accuracy.

2.                     The average cost for an individual credit report is

a.      $50 – $60 each.

b.      $60 – $200 each.

c.       $200 – $300 each.

d.      $300 or more each.

3.                     The most comprehensive credit information can be obtained from

a.      indirect sources only.

b.      the international sales team.

c.       direct and indirect sources combined.

d.      direct sources only.

4.                     In the business world today the greatest challenge to the international credit manager is

a.      evaluating too much information.

b.      the lack of information available.

c.       the cost of available information.

d.      securing accurate information.

(Correct answers: 1=d, 2=b, 3=c, 4=a )