Confused yet? I know I am. Probably best then that I just wrote the last entry when I did, rather than waiting and corralling it all into one, long, plot-twisting explanation.
For those who are new or who didn’t click that link up there, in my last entry, I talked about how the CICP course will take you through both the elements of international credit and risk management at a bank, and international credit and risk management at a seller’s company. That was really only part of it though. I just got to Module 10 (fell back behind again, due to a presentation on the Credit Managers’ Index (CMI), which, hey, have you heard about it? It’s awesome) and I’m reading about financing international trade from the importer’s perspective, which is to say the buyer’s perspective.
Banks, sellers, and now buyers, the triumvirate of international business, all of them here, thoroughly discussed and analyzed.
It sometimes seems like I forget that buyers exist, which, in fairness to me, kind of makes sense. NACM is here to help people extend commercial credit, which is a function of selling really. But I may be guilty of dividing sellers and buyers up as though they were always two separate and unrelated entities. It’s probably news to no one but myself that, hey, sellers need to buy things too, and buyers need to sell things too. Pretty basic stuff here, but it’s easy, when focused on the process of credit extension, to forget that the buyer isn’t just the person who’s either going to pay you or not, they’re a person and a business, trying to make it just like you are. They have to do what’s best for them, as do we all.
The only way I can even remember addressing the plight of the importer, or buyer, is a long time ago when I mentioned in an article how sellers can sort of coach their customers into being a successful business (and by extension, an excellent customer). They can help them get organized and help them find sources for new sales and new markets (if they have the resources to do so). It’s a noble goal; it helps establish the business relationship and enhances the chance of prompt payment and if a seller can coach its customer into growth, hopefully that customer will turn around and need even more product.
I probably didn’t include this in the article, but, internationally speaking, this kind of win-win scenario seems like it would be much easier if you understand terms and financing from the importer’s perspective; what they’re looking for and what they want, as opposed to what you’re really willing to give. Trade financing is an especially interesting point because both buyers and sellers need it, but they often have different reasons and (often very) different preferences about how this financing is administered.
I guess what I’m saying is that the CICP course will remind you that, as it is on the dance floor, so it is in business: it takes two to tango.
And possibly three to tango, if you count the bank.
Okay, it takes more than one to tango. I think that’s a fair compromise.
Till next time,