Local businesses should know how to manage debtors proactively to identify early warning signs and avoid late payments or bad debts. This, in turn, is conducive to businesses having more time and resources to build solid, long-term relationships with good customers. This was the theme of a conference on practical credit management organised by the Malta Association of Credit Management (MACM).

"Businesses have various needs, so it is crucial to establish working capital solutions for them while encouraging growth of sustainable factoring both locally and internationally," HSBC Business Development Manager Pierre Brincat told the conference. HSBC Malta launched invoice finance services in 2006. Factoring is a credit management practice to finance, collect and protect business invoices.

Glen Bullivant, a credit management consultant in the UK, explained how to develop and implement an effective credit policy to ensure a healthy cash flow. Paul Meilak, in his capacity as personal financial services credit and operations manager, described how to analyse the credit worthiness of a potential customer and monitor debtors from a practical point of view.

Maltese businesses are in constant competition both to promote and sell their products and services, as well as to collect dues on time. Additionally, credit applications and requests to extend existing credit facilities from traders are increasing as it is the cheapest way to finance purchases or to improve the cash flow of a business.

The focus of MACM's annual conference was on the management of granting or extending these credit facilities while containing the element of risk.