The CID Committee hosted a webinar on April 21 to discuss issues facing credit departments in the current environment. Participants agreed that given the scale of the pandemic, all companies are facing issues that no one has experienced and for which there are few easy answers. This underscores the importance of communicating with peers across the industry to share best practices.
Companies are using a variety of tools to help gauge customer credit risk in this environment. These include Oil & Gas Intel, Dun & Bradstreet and the PESA CID database. In many cases, companies are using a combination of these and other tools to gauge credit risk.
The impact of the new accounting standard, Current Expected Credit Losses (CECL) that took effect on January 1, 2020 was discussed. Companies must now consider the current economic conditions as of each balance sheet date and assess if historical loss experiences are expected to be consistent in the future. Given the dramatic change in the market over the past two months, companies should expect an impact on the necessary reserve for uncollectables.
For more information regarding the PESA Credit Interchange Division contact CID Director Vicky Shelley.