COURSE : CERTIFICATE IN CREDIT MANAGEMENT

OBJECTIVE

To enable a student to become a specialist in the field of Credit Control and Credit Management where the total field of operation of credit is studied. The emphasis of the certificate course is on the practical application of the theoretical knowledge that is imparted to a student. The ICM sets, examines and moderates on the ICM's Certificated Course in Credit Management and the following rules apply:

Students must enrol at an approved college or technicon in order to be prepared for the Institute's exams. Please telephone the ICM National Office, who will provide you with an alphabetical list of approved educational institutions in your area.

Students enrolling at a college or technicon must enrol as Student Members with the ICM within three weeks of the commencement of their course. Membership fees, registration fees and examination fees are payable directly to the college, who will assist students in completing the enrolment and registration forms and forward the funds collected together with the completed forms to the Institute within three weeks of the commencement date of the course.

On receipt of the funds and forms the Institute will confirm membership directly to the student and provide the examination number. The closing date for all exam registrations is 1 (one) calendar month prior to the exam date. NO late registrations will be considered for whatever reason.

The certificate is made up of three parts (four parts effective January 2012). The three (four) parts cover the total area of operation of credit management, including the principals and procedures as well as the legal requirements associated with the granting, assessing and administration of credit sales.

ENTRY QUALIFICATION

Part One
Applicants must be in possession of at least a grade IX certificate PLUS 3 years working experience in Credit Control OR be 23 years of age PLUS successfully completed the ICM Bridging Course in Credit Management.

Part Two
Applicants must be in possession of Part One of the ICM's Certificate in Credit Management, OR exemption from part one by the Board of the ICM. Note: the Board of the ICM may require an applicant to write the Board exemption examination.

Part Three
Applicants must be in possession of Part Two of the ICM's Certificate in Credit Management. No exemption will be granted under any circumstances.

EXEMPTION

Exemption may be granted ONLY from Part One of the certificate course and such exemption will only be granted to students with a St. 10 certificate or equivalent AND a minimum of 5 (five) years experience at a senior level, such as a person occupying the position of a Credit Controller. The granting of an exemption is an exception and students may be required to be formally tested in their claimed abilities and knowledge. Where such exemption is granted students concerned are required to familiarise themselves with all aspects covered in part one of the certificate course and the ICM will not accept responsibility for the fact that such a student may find part two too difficult.

EXAMINATION

Examinations are written in May and November every year, with a re-write for May examinations in November and November examinations in January the following year. Students failing the ICM examination at one sitting by no more than 9% may apply to the ICM, through their college, to re-write at the next sitting. The ICM's standard re-write fee is payable.

COURSE OUTLINE
 

Part One Syllabus

• The duration will be a minimum of 30 hours and the core syllabus will cover:
  
  1. Definition of Credit
  
  2. Forms of Credit :-
   

  Definitions, sectors affected and the role of the economy of:- Consumer credit Commercial Credit Export / International credit Government credit Banking credit Agricultural credit

  3. Sources and role of Credit :-
   

  (i) Controls, functions, products and responsibilities of:- Commercial Banks Merchant Banks Finance Houses Factoring Houses South African Reserve Bank Land Bank Small business development corporations Micro lenders

  (ii) The role of Credit in business:- Cash cycle and the use of credit in business Advantages & disadvantages of offering credit Cost of Credit to a business Chain of distribution and the varying credit requirements

  (iii) The role of Credit in the life of a consumer:- Benefits and dangers in using credit Understanding consumer rights and obligations

  (iv) The role of Credit in the economy :- Understanding the various pressures and economic influences Legislation Social obligations International Political Technological Brief overview of the impact of the excessive use of credit on the economy

  (v) Definitions of Credit Terminology:- Open Account (include risk & ownership) Installment Sale Agreements (include risk & ownership) Leasing & Rental Agreements Revolving Credit Credit worthiness Purchasing Power Credit Redemption Credit Volume Credit Limit Cash Cycle Credit Risk Credit Service Profit Over-trading Liquidation Sequestration Conditions of Sale Credit terms Credit period Trade Discount Settlement Discount Age Analysis Overdue Report Days Sales Outstanding Forward Buying Consignment Stock Cash flow Bad debts Finance charges Penalty charges Interest Interest rates Jurisdiction Domiciled Seasonal dating

  (vi) Payment Terms and factors influencing them:- Cash with Order Cash before delivery Cash on delivery Specific days from date of invoice Specific days from date of statement Load over Load Sold on Consignment Sight draft Installments

  4. Internal Credit Environment:-

  (i) Functions of a Credit Department:- New Account Assessments Account maintenance Collections (ii) Credit Policy:- Definition Role and use of the Policy Basic Contents of the Policy (iii) Credit Evaluation:- The 7 C’s of Credit:- Character Capacity Capital Collateral Credit History Conditions Common Sense The role of the 7 C’s in determining risk:- Consumer Commercial Credit Bureau listing (iv) Consumer Assessments:- (a) Gathering Information Credit Applications & Credit Agreements (Open accounts, cash loans & installment ) (Which information is asked for & why) Credit Bureau (include the role of the bureau and consumer information) Trade References (which ones to use, and information to be obtained) Employment Verification Deeds Office Government Gazette (b) Value of Personal Interviews When are they used How are they conducted What role do they play in the assessment process (c) Evaluating the Risk Manually:- Using the 7 C’s of Credit Scoring :- Manual Scoring - using:- Contactability Salary confirmation Electronic Scoring – using:- Information weightings based on past bad debt history and industry trends (d) Decision Making & Credit Limit setting Manual system Scoring System (v) Commercial Assessments :- (a) Sources of Information Credit Application Forms + Conditions of Sale (Importance of information obtained – including understanding all forms of business ownership and the legal set up requirements thereof ) The Role of the following non-financial sources in Commercial Credit: Credit Bureaus Director Links & past history Trade References Salesman’s Report Bank Codes & Reports Deeds Office Government Gazette Newspapers Industry Share Groups Professional Institutions Competitors (b) Evaluating the Risk using the 7C’s of Credit and the non-financial information gathered. (c) Setting a credit limit:- Basic method – : taking customer requirements, terms and credit worthiness. (vi) Collections (a) Importance of prompt collections Cost of overdue accounts Cost of bad debt write-offs (b) Payment Methods:- Negotiable Instruments:- Bills of Exchange Promissory Notes Cheques – Endorsements & Restrictions Post dated Cheque Acceleration Clause Telegraphic & electronic transfer Postal Orders (c) Collection Objectives (d) Collection Procedures Policy Definition Format Internal & External influences Content (e) Target setting for individual collectors Categorize debtors – using:- Age Amount Payment history (f) Collection Tools Age Analysis Exception Reports Facsimile Letters Telegrams Statements 3rd Party collections – ADRA & Code of Ethics (g) Differences between consumer & commercial collections (h) Measurement of Effectiveness Time, Value and productivity (vii) Debtors Administration Maintaining the account Understanding debits and credits Credit and debit notes - authority levels & allocations Journals – Credit and Debit Importance of keeping an “open to buy” situation Banking procedures and balancing Data Capturing & balancing Reconciliations – Open Item & Balance brought forward Cash Sale Reconciling Masterfile maintenance & authority levels Filing systems and the importance thereof (viii) Inter-departmental Co-operation Introduction to Company & departmental objectives The obligations of the credit personnel to other departments The obligations of other departments to the credit personnel Importance of Team strategy

  5. Introduction to the Basic Law of Contract

  (i) Law of Contract Definition of a legally binding contract – verbal or written Exceptions to the above criteria (ii) Contract of Sale

  6. Supervisory Skills

  Role of the Supervisor:- Obligations to Management Obligations to staff – basics of Plan, Lead, Organize and control

  On successfully completing Part ONE of the Course, and obtaining a minimum of 50% in the examinations set and moderated by the ICM, students will be provided with a document stating that they have successfully completed Part ONE of the THREE Part Certificated Course in Credit Management (Part ONE of the FOUR Part Certificated Course in Credit Management effective 2012).
  
  Next : Certificate Credit Management : Course Outline : Part Two
   

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