Free Online Course in International BusinessTelephone ContactsTelephone contacts can be used to supplement financial information on statements submitted to the company or to a credit agency, to obtain references, to bring financial information up to date, and to verify reported contracts. Often the next best thing besides a personal visit is using the telephone, which has the added advantage of being less costly and time-consuming. Before making telephone contact, it is wise to prepare a form noting the points to be covered and the information needed. Doing such is very helpful, particularly for the inexperienced, or when a large number of points are to be discussed. Emailing an agenda and time that the telephone call will be placed is a smart approach by an evaluator, especially if international time zones are involved. As in the case of the personal interview, a memorandum of the telephone conversation should be written promptly and placed in the credit file.Bank InformationAn excellent source of credit information is a seller's bank. An inquiry directed through this source stands a better chance of obtaining useful information than one directed to a foreign buyer's bank. Bank information generally includes a history of a foreign buyer, antecedents of the principals, and some financial data. A fairly complete picture of a firm's credit standing often may be obtained; but, depending on a seller's risk, bank reports should be supplemented by information from other sources.Overseas BanksOverseas banks vary widely in their co-operation with requests for information; and, like information received from a buyer, the credit information secured directly from a foreign bank varies in value. It may include business history, business background of the principals, financial data, or merely comments that this foreign buyer is a respected member of the community.Bank-to-BankIt is possible for a seller's bank to check with a buyer's bank when an international credit manager's efforts are unsuccessful or when special information is needed. Normally an international credit manager will employ this technique when a large value order is pending or initial appearances indicate some higher level of payment risk potential than normal for a seller. Often this technique is successful since banks might disclose more information to other banks than they do to sellers or trade creditors who are not their depositors. Sometimes a fee is charged for this service. When considering the circumstances, this fee might be very well worth the investment.Information Sought in a Bank InquiryAn international credit manager should explain the scope, nature, and reason for the inquiry. The depth of response rests on several basic factors. First is the amount of money involved. Then the credit manager must be certain that the proper person is contacted at the bank; be well prepared with precise questions before calling or writing; and be careful not to violate the following caveats. Banks will not usually volunteer unsolicited information. They will, however, answer specific legitimate questions that do not violate confidentiality. An inquiry that involves a large value and includes specific data, such as terms of sale and a request for financial details, may well receive a more detailed reply than one that refers to a small value with vague reference to the terms of sale and other factors. Banks will generally decline comment about a company's ability to pay a specified amount.Seller's Foreign Sales RepresentativeA seller's sales representative or company agent abroad can also be a valuable source of information. Local, in-country representatives should know much about their customers--not only purchasing patterns, but the company's reputation, competitive environment, employee satisfaction and the like. An agent is known in the customer's trade circle and has access to credit information from local banks and commercial sources. A representative can therefore offer a fair picture of a customer's financial condition, as well as confidential data which would be difficult to obtain from any other source. Of course, if a local sales representative is native to the country, he/she will have a better understanding of business and cultural issues that impact the local customers. An international credit manager must also take into consideration the cultural ties and business relationship between the parties involved.
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