Without any doubt the greatest challange facing supply side businesses, at this time, is Credit Default. The ability to sift data to select the best, most reliable counter-parts, at the expense of the old risk/reward model, is becoming much more important as sources of finance tighten.

However, it isn't just good enough to pay lip service. Internal procedures and processes to handle information flows need to be created. A wider view of the forces that impact upon customers and can influence their ability to pay and the 'cocktail cabinet' of mitigation tools available must be utilised.

There is no one fit that suits all, and the range of approaches can run from 100% credit insured to wholly self insured. From established relationships ruling the roost to meticulous and perhaps sometimes over cautious, financial ratio driven systems.

In some ways a deciding factor can be the difference between considering yourself a partner to the customer to being an out and out service provider...

Certainly food for thought and I would definately recommend the courses in Managing Credit Risk that are run by Petrospot and other such courses and events from Bunkerworld and Lloyd's MIU.

Indeed, food for thought. If suppliers are to thrive in the months ahead this prescription requires an even more sophisticated credit assessment management process, or a much more conservative business model to manage the risks in a manner seen to acceptable. The former allows for business expansion, the latter results in stagnation. Neither will prevent account failures and their consequences from occurring in the months ahead. Suppliers need to consider whether they are comfortable providing unsecured finance to a sector currently under severe financial constraints and no matter how sophisticated the assessment process becomes it may reduce the risk but it does not come with a guarantee.