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The Internet (and a Few Trailblazers) Change the International Credit Function


From the May 2000 edition of Managing International Credit and Collections

The Internet is radically changing the way international credit and collections professionals are doing their jobs. The innovations in the way the Internet is used at leading-edge companies are remarkable.

The Numbers

Use of e-mail is now a common practice-at companies of all sizes. While e-mail is used slightly more frequently at the very largest companies, it is still quite common even at the smallest companies in our survey, with 79% of those at companies with fewer than 200 employees using e-mail, compared with 90% at companies with over 3,000 workers. Overall, communication via e-mail is used at 82% of all companies.

International credit managers find other ways to use the Internet. Slightly over half of those responding indicated they use the Internet to order and receive credit reports with larger companies, taking this route more frequently than smaller companies.

After credit reports and e-mail, use of the Internet for most of the respondents drops drastically, with only 13% reporting other usage. To see how your company compares, see the accompanying table for a breakdown of the numbers by company size.

The Primary Uses

E-mail, pulling credit reports, and using the EDGAR site to pull 10Ks and 10Qs are the most common ways international credit professionals are taking advantage of the Internet's capabilities. Internet usage in other countries, while nowhere close to that in the United States, is finally taking off. Approximately half the households in the United States are "connected," while only one in five households in the United Kingdom is online. These numbers translate into the business community.

International credit and collection managers who have not inquired in the last 12 months about their customers' e-mail capability are advised to do so, if they wish to communicate with their customers online. Even if the customer is not connected, you might ask about its intentions to go online in the next year or two and then follow up at the appropriate time.

Recent Innovations

Although only a small percentage of international credit professionals are taking advantage of the Internet's full capabilities, these trailblazers will ultimately change the profession forever. For starters, these innovators are doing customer research in a way that provides them with more information than is traditionally available for credit investigations.

A few savvy international credit executives use search engines, spiders and robots, to help with customer evaluations. They are finding information, both financial and other, that is not typically offered in financial reports. Some are even sharing the results of their searches with the sales force when the information might help clinch a sale.

The idea that MICC likes best was the posting of invoices and proofs of delivery on the Internet. (Such information is password protected so only those authorized can actually view it.) This should eliminate the "I-never-got-the-invoice" and "Are-you-sure-we-received-your-goods?" excuses. By giving customers the opportunity to post dispute information, these sites should take a big step toward minimizing the amount of work typically associated with the dispute function.

For a complete list of the tasks international credit professionals are now performing on the Internet, please refer to the accompanying charts.

MICC believes that a revolution is under way in the way the credit and collections functions are handled. According to our research, most in the profession are taking part, albeit in a very small way. A much smaller portion of the group-the 13% in our study who are using the Internet for other credit functions-is changing the face of the credit function forever. MICC will monitor this ongoing change and update subscribers regularly.

How International Credit Pros Use the Internet in Their Day-to-Day Work

  • to communicate with sales reps and customers via e-mail
  • to report information and receive contracts
  • to receive requests to initiate letters of credit
  • to obtain information on companies and to get financial news items and other relevant customer information
  • to obtain information about current or potential customers by using search engines
  • to do marketing
  • to obtain background information
  • to e-mail trade reports
  • to find currency exchange rates
  • to translate documents (foreign language)
  • to use e-fax to pick up faxes received when traveling
  • to obtain customer credit information
  • to subscribe to trade publications (Editor's note: MICC can be obtained in an e-mail format. For more information, contact
  • to obtain price quotes
  • to understand terms, labeling questions, and expiration issues
  • to obtain country-risk data
  • to research a specific country's economic position
  • to share reports and information
  • to set up a site that allows customers to view invoices online along with proof of delivery and to respond to disputes
  • to transfer technical information
  • to post company history, public information, and organization tree
  • to do billing and payments
  • to keep up-to-date on company news and late-breaking industry updates
  • to replace voice and fax communications
  • to obtain financial disclosure on public companies including 10Ks and 10Qs.
  • To order credit reports

(Source: MICC)

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