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DESIGNING CREDIT RISK MANAGEMENT PROCESS IN COMPANIES

Year 2020, , 392 - 408, 31.12.2020
https://doi.org/10.17261/Pressacademia.2020.1330

Abstract

Purpose- The purpose of this study is to show that for a healthy free cash flow, the credit risk is a key pillar for companies and is managed through a process that includes several steps.
Methodology- With a reference to risk management process in general, steps of credit risk management have been been designed. In each step, key credit risk management activities have been mentioned.
Findings- Credit risk management process includes steps starting from risk identification to monitoring of the risk. It is comprised of risk identification and risk analysis activities in scope of Know Your Customer (KYC) principle to assess the buyer’s credit worthiness. The appropriate risk management strategies to mitigate risk are also determined after the assessment has been made. Monitoring is the review of the whole process to have the necessary improvements. The entire process has a vital role to decide whether credit sales will be sustained or not and if yes under which credit conditions.
Conclusion- As the world trade grows, trade credit becomes a substantial competition tool for the suppliers. Credit risk appears to become the main cause of the financial loss faced by the suppliers in their credit sales. The credit risk must be managed effectively for the sustainability of world trade activities.

References

  • Becue, Paul. (2013). Credit Insurance. Leuven, Lanoo Campus Publishers.
  • Bragg, Steven.M. (2011) Accountant, Controllership:The Work of the Managerial Accountant. John Wiley & Sons,Inc.
  • Çetiner, M., & Eke, S. (2018). İhracat Artışının ve ekonomik büyümenin Sağlanmasına Yönelik Olarak İhracatta Tedarşkçi Kredi riskinin Sigortalanması. JEFA, journal of Economics , Finance and Accounting, 5(4), 359-372.
  • Çetiner, M., & Eke, S. (2020). İhracatta Tedarikçi Kredi Riskinin Garanti Altına Alınmasında Faktoring, İhracat Artışına ve Ekonomik büyümeye Desteği. Finans, Ekonomi ve Sosyal Araştırmalar Dergisi, Cilt 5, Sayı 2 , 288-301.
  • Gordon, K. (2008). Investment Guarantees and Political Risk Insurance: Institutions, Incentives and Development. OECD Investment Policy Periodicals. Retrieved from https://www.oecd.org/finance/insurance/44230805.pdf
  • Holliwell, J. (1998). The Financial Risk Manual, A Systematic Guide to Identifying and Managing Financial Risk. Financial Times Prentice Hall.
  • Kontus, Eleonora. (2013).Management of Accounts Receivable in a company. Ekonomska Misoo Praksa .
  • Lam, J. (2003). Enterprise Risk Management, From Incentives to Controls. U.S.A: Wiley Finance.
  • McKinsey & Company (2020). Managing and Monitoring Credit Risk after Covid-19 Pandemic. Retrieved from https://www.mckinsey.com/business-functions/risk/our-insights/managing-and-monitoring-credit-risk-after-the-covid-19-pandemic
  • O'Connelly, P. (2007). Trade Credit Risk Management , Fundamentals of Craft in Theory and Practice. Florida : Library of Congress.
  • Bottoni, A. (2001). Handbook of International Credit Management. (B. Clarke, Ed.) Gower Publishing Limited
  • Bullivant, G. (2010). Credit Management (Vol. 6th Edition). London, U.K.: Gower Publishing.
  • Hopkin, P. (2017). Fundamentals of Risk Management. U.S.A: Kogan Page.
  • Joachim C Bartels, G. A. & Geoffrey Hirt (2001). Handbook of International Credit Management (Vol. Third Edition). (B. W. Clarke, Ed.) Burlington, U.S.A: Gower Publishing Company.
  • Joseph, C. (2013). Advanced Credit Risk Analysis and Management. U.K: Wiley Finance.
  • Jus,Miranda. (2013). Credit Insurance. Elsevier Publications
  • Bouteille, Sylvain , Pushner,Diane Coogan. (2013). The Handbook of Credit Risk Management. New Jersey , U.S.A: John Wiley & Sons, Inc.
  • Edwards, Burt (2010).Credit Management,Gower Publishing
  • Berk, Prof.Dr.Niyazi (2000), Finansal Yönetim. İstanbul: Türkmen Kitapevi
  • Rejda, George E.; McNamara, Michael J.( 2017).Principles of Risk Management and Insurance. Essex, Pearson Education Limited.
  • Salek , John C.( 2005). Account Receivable Management, Best Practices. New Jersey, Wiley Best Practices.
  • 2019 CPI Report. Retrieved from Transparency Internatonal: https://www.transparency.org/files/content/pages/2019_CPI_Report_EN.pdf
  • Allianz Global Corporate & Specialty,. (2020). Retrieved from Business Interruption Insurance Trends: https://www.agcs.allianz.com/solutions/business-interruption.html
  • Atradius Group. Retrieved from https://group.atradius.com/
  • Bribery Act 2010. Retrieved from https://www.legislation.gov.uk/ukpga/2010/23/contents
  • Coface Global, Retrieved from https://www.coface.com/
  • Compliance Case Studies.Retrieved from https://redflaggroup.com/category/type/case-studies/
  • CRIF. Retrieved from https://www.crif.com.tr/üruen-hizmetler/risk-yoenetimi-çoezuemleri/
  • EU Global Sanctions Guide. Retrieved from https://sanctionsguide.eversheds-sutherland.com/countries/the-european-union/
  • Euler Hermes. Retrieved from https://www.eulerhermes.com/en_global/economic-research/country-reports/Turkey.html
  • Institute of Risk Management. (2020, Nov.28 ). Retrieved from A Risk Management Standard: https://www.theirm.org/media/6827/arms_2002_irm.pdf
  • Kredi Kayit Burosu. Retrieved from https://www.kkb.com.tr/hakkimizda
  • OFAC Sanctions List. Retrieved from List https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists
  • Refinitiv. Retrieved from https://www.refinitiv.com/en/about-us
  • Riestra, Ampra San Jose (2003) Retrieved from credit Insurance in Europe, Impact, Measures and Policy Recommendation: http://aei.pitt.edu/9563/2/9563.pdf
  • S&P Global Market Intelligence (2020, July 24) Covid-19: Assessing Credit risk Impact on Small and medium Enterprises. Retrieved from https://www.spglobal.com/marketintelligence/en/news-insights/blog/covid-19-assessing-the-credit-risk-impact-on-small-and-medium-enterprises
  • The United States Department of Justice Foreign Corrupt Practices Act. Retrieved from https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act
  • SDN. Retrieved from https://sanctionssearch.ofac.treas.gov/
  • World Check KYC Screening. Retrieved from https://www.refinitiv.com/en/products/world-check-kyc-screening/customer-risk-screening

ŞİRKETLERDE KREDİ RİSK YÖNETİM SÜRECİNİN KURGULANMASI

Year 2020, , 392 - 408, 31.12.2020
https://doi.org/10.17261/Pressacademia.2020.1330

Abstract

Amaç- Bu makalenin amacı, şirketlerde saglıklı bir nakit akışı icin, kredi riskinin önemli bir yapı taşı olduğunu ve çeşitli adımları olan bir süreçte yönetildiğini göstermektir.
Yöntem - Risk yönetim sürecinin genel işleyişi referans alınarak, kredi riski yönetim süreci adımlar şeklinde kurgulanmıştır. Her bir adımda temel kredi riski yönetim faaliyetlerinden bahsedilmiştir.
Bulgular - Kredi riski yönetim süreci, riskin belirlenmesinden başlayarak riskin izlenmesine kadar olan adımları içerir. Kredi değerliliğinin belirlenmesine yönelik “Müşterini Tanı (KYC)” prensibi kapsamında yapılması gereken risk belirleme ve risk analizi çalışmalarını kapsar. Değerlendirme sonuçlarına göre, riskin etkilerini azaltmak üzere risk yönetim stratejileri belirlenir. İzleme tüm sürecin gözden geçirilmesi yoluyla iyileştirmelerin yapılmasına yöneliktir. Kredili satış faaliyetlerinin sürdürülme kararında ve kredi koşullarının belirlenmesinde sürecin tümü önemli bir rol oynar
Sonuç - Dünya ticareti büyüdükçe, kredili satışlar tedarikçiler için önemli bir rekabet aracı olmaktadır. Kredi riski, tedarikçilerin kredili satış faaliyetleri sonucunda finansal zararla karşılaşmasına sebep olan önemli bir risktir. Tüm dünyada ticari faaliyetlerin kesintisiz bir şekilde sürdürülebilmesi kredi riskinin etkin bir şekilde yönetilmesi ile mümkündür.

References

  • Becue, Paul. (2013). Credit Insurance. Leuven, Lanoo Campus Publishers.
  • Bragg, Steven.M. (2011) Accountant, Controllership:The Work of the Managerial Accountant. John Wiley & Sons,Inc.
  • Çetiner, M., & Eke, S. (2018). İhracat Artışının ve ekonomik büyümenin Sağlanmasına Yönelik Olarak İhracatta Tedarşkçi Kredi riskinin Sigortalanması. JEFA, journal of Economics , Finance and Accounting, 5(4), 359-372.
  • Çetiner, M., & Eke, S. (2020). İhracatta Tedarikçi Kredi Riskinin Garanti Altına Alınmasında Faktoring, İhracat Artışına ve Ekonomik büyümeye Desteği. Finans, Ekonomi ve Sosyal Araştırmalar Dergisi, Cilt 5, Sayı 2 , 288-301.
  • Gordon, K. (2008). Investment Guarantees and Political Risk Insurance: Institutions, Incentives and Development. OECD Investment Policy Periodicals. Retrieved from https://www.oecd.org/finance/insurance/44230805.pdf
  • Holliwell, J. (1998). The Financial Risk Manual, A Systematic Guide to Identifying and Managing Financial Risk. Financial Times Prentice Hall.
  • Kontus, Eleonora. (2013).Management of Accounts Receivable in a company. Ekonomska Misoo Praksa .
  • Lam, J. (2003). Enterprise Risk Management, From Incentives to Controls. U.S.A: Wiley Finance.
  • McKinsey & Company (2020). Managing and Monitoring Credit Risk after Covid-19 Pandemic. Retrieved from https://www.mckinsey.com/business-functions/risk/our-insights/managing-and-monitoring-credit-risk-after-the-covid-19-pandemic
  • O'Connelly, P. (2007). Trade Credit Risk Management , Fundamentals of Craft in Theory and Practice. Florida : Library of Congress.
  • Bottoni, A. (2001). Handbook of International Credit Management. (B. Clarke, Ed.) Gower Publishing Limited
  • Bullivant, G. (2010). Credit Management (Vol. 6th Edition). London, U.K.: Gower Publishing.
  • Hopkin, P. (2017). Fundamentals of Risk Management. U.S.A: Kogan Page.
  • Joachim C Bartels, G. A. & Geoffrey Hirt (2001). Handbook of International Credit Management (Vol. Third Edition). (B. W. Clarke, Ed.) Burlington, U.S.A: Gower Publishing Company.
  • Joseph, C. (2013). Advanced Credit Risk Analysis and Management. U.K: Wiley Finance.
  • Jus,Miranda. (2013). Credit Insurance. Elsevier Publications
  • Bouteille, Sylvain , Pushner,Diane Coogan. (2013). The Handbook of Credit Risk Management. New Jersey , U.S.A: John Wiley & Sons, Inc.
  • Edwards, Burt (2010).Credit Management,Gower Publishing
  • Berk, Prof.Dr.Niyazi (2000), Finansal Yönetim. İstanbul: Türkmen Kitapevi
  • Rejda, George E.; McNamara, Michael J.( 2017).Principles of Risk Management and Insurance. Essex, Pearson Education Limited.
  • Salek , John C.( 2005). Account Receivable Management, Best Practices. New Jersey, Wiley Best Practices.
  • 2019 CPI Report. Retrieved from Transparency Internatonal: https://www.transparency.org/files/content/pages/2019_CPI_Report_EN.pdf
  • Allianz Global Corporate & Specialty,. (2020). Retrieved from Business Interruption Insurance Trends: https://www.agcs.allianz.com/solutions/business-interruption.html
  • Atradius Group. Retrieved from https://group.atradius.com/
  • Bribery Act 2010. Retrieved from https://www.legislation.gov.uk/ukpga/2010/23/contents
  • Coface Global, Retrieved from https://www.coface.com/
  • Compliance Case Studies.Retrieved from https://redflaggroup.com/category/type/case-studies/
  • CRIF. Retrieved from https://www.crif.com.tr/üruen-hizmetler/risk-yoenetimi-çoezuemleri/
  • EU Global Sanctions Guide. Retrieved from https://sanctionsguide.eversheds-sutherland.com/countries/the-european-union/
  • Euler Hermes. Retrieved from https://www.eulerhermes.com/en_global/economic-research/country-reports/Turkey.html
  • Institute of Risk Management. (2020, Nov.28 ). Retrieved from A Risk Management Standard: https://www.theirm.org/media/6827/arms_2002_irm.pdf
  • Kredi Kayit Burosu. Retrieved from https://www.kkb.com.tr/hakkimizda
  • OFAC Sanctions List. Retrieved from List https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists
  • Refinitiv. Retrieved from https://www.refinitiv.com/en/about-us
  • Riestra, Ampra San Jose (2003) Retrieved from credit Insurance in Europe, Impact, Measures and Policy Recommendation: http://aei.pitt.edu/9563/2/9563.pdf
  • S&P Global Market Intelligence (2020, July 24) Covid-19: Assessing Credit risk Impact on Small and medium Enterprises. Retrieved from https://www.spglobal.com/marketintelligence/en/news-insights/blog/covid-19-assessing-the-credit-risk-impact-on-small-and-medium-enterprises
  • The United States Department of Justice Foreign Corrupt Practices Act. Retrieved from https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act
  • SDN. Retrieved from https://sanctionssearch.ofac.treas.gov/
  • World Check KYC Screening. Retrieved from https://www.refinitiv.com/en/products/world-check-kyc-screening/customer-risk-screening
There are 39 citations in total.

Details

Primary Language Turkish
Subjects Economics, Finance, Business Administration
Journal Section Articles
Authors

Selda Eke This is me 0000-0003-4162-3549

Ozlem Toprak This is me 0000-0003-3228-4063

Publication Date December 31, 2020
Published in Issue Year 2020

Cite

APA Eke, S., & Toprak, O. (2020). ŞİRKETLERDE KREDİ RİSK YÖNETİM SÜRECİNİN KURGULANMASI. Journal of Economics Finance and Accounting, 7(4), 392-408. https://doi.org/10.17261/Pressacademia.2020.1330

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