The corporate group, the union of several legally independent companies into one economic entity, raises a lot of questions for credit management. Which central measures for risk limitation are possible in a company group with various subsidiaries, branches or fields of activity? Does it make sense to implement a shared service in a group structure? One should also consider which reporting strategies regarding risks and credit are useful and possible at the group level.

Centralized or decentralized?

The organization of credit management processes depends on the general structure of the company group. For groups with a homogeneous structure, central credit management with uniform processes and a standardized credit policy is recommended. In groups whose structure is more heterogeneous, more decentralized credit management may be advantageous; each company within the group can follow its own credit policy with its own strategies for securing credit. Which form – centralized or decentralized – is best depends on the particular characteristics of the group. Creditworthiness checks and the setting of credit limits can be done centrally or at the level of the subsidiaries. Even where the setting of limits is decentralized, it should be possible to have a centralized evaluation of these limits. In both cases, it is absolutely essential that every piece of available information about customers is used when making decisions. With the centralized setting of limits, the total credit limit is then divided between the subsidiaries. This process must take into consideration that the assignment of limits can constantly change and must therefore be adjusted by the employees.

Overview of the entire company group

Even in cases where creditworthiness evaluations, securing of credit and dunning procedures are decentralized, a centralized overview of all customers and activities can, and must, be enabled. Without the proper IT support, however, this is almost impossible. It should be possible to generate global reports and analyses across all of the companies in the group as well as for individual subsidiaries. These could include analyses of DSO, rating distribution or the development of exposure. Particularly in corporate groups that operate internationally, maintaining an overview of the total exposure is a vital aspect. It is essential to be able to view the entire relationship with a customer or supplier across all countries and subsidiaries.

IT support

Solutions for credit management at the group level are becoming increasingly important for internationally operating companies. This is driven mainly by the necessity of having a centralized overview of the default risk of the entire customer portfolio and an effective mechanism for securing credit business. With the appropriate software, relevant data for risk evaluation can be made available centrally in real time. The data is continually updated using internal payment records and creditworthiness information from external agencies, so that it becomes possible to make credit decisions or to approve orders at any time. Modern technologies such as web clients simplify an international roll-out and make all the information and functions accessible everywhere, including the use of tablet PCs and smartphones. International credit management requires a deep knowledge of the practices in the countries in which the customers are based. In regions where business is conducted only occasionally, it is useful to resort to external expertise for credit management. The performance analysis of the credit management will often have to be evaluated region by region in order to achieve relevant results that can be used for decision making. Robert Meters, Head of Marketing and Sales at Prof. Schumann GmbH, explains: "With CAM (Credit Application Manager), we provide a software solution for credit management that has already proved its effectiveness in the international corporate group environment."


A credit management system that is adapted to the structure of the company group can deliver further advantages with the right IT support. Automation and having data centrally available significantly reduce process costs. The DSO is reduced and the risk of defaults is minimized. Robert Meters recounts some of the concrete effects encountered in practice: "In trading companies, it is not unusual to see a reduction of DSO by 5 days and of defaults by 75%. Over time, our customers can also optimize their commercial credit insurance. This is made possible by our integrated early warning system."

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