DEFAULT: PREVENTION, CONTROL AND DEBT COLLECTION THROUGH CLIENTS´ PROFILE

Abstract

Boom in the Brazilian economy means an increase in credit demands. According to SERASA, default rate in 2011 was 22% and caused firms to increase their prevention, control and debt collecting methods. When a firm has a good credit policy, the analyst has certain tools that make credit investigation more precise for decision-taking. From the enterprises´ point of view, the most important factor is to avoid defaults due to costs inherent to debt collection. Credit analysis should be based on an analysis of the clients´ profile and traditional debt collection. A descriptive and qualitative research was undertaken by means of documents, interviews and reports on 40 client sheets of the firm Senai in Paranavaí, Brazil, to identify the profile of defaulters and the tools employed. A monthly control of defaults and data on billing and percentages also report the amounts that may be received according to deadlines. The firm calls up clients, sends letters and places them on commerce protection lists besides hiring a debt collecting firm. Although the methods are good, improvements may be adopted in credit analysis and flexibility in debt negotiations which may enhance the credit policy.