WHAT DOES A CREDIT ANALYST DO?
Published: September 11, 2024 - The Credit Analyst manages assigned customer accounts, ensuring collections, reconciliations, and compliance with the company's credit management policies. This position analyzes customer financial statuses, recommends credit limits, and monitors credit concerns, reporting findings to management. This role coordinates with sales, customer service, and accounting teams to resolve credit issues and enhance efficiency and accuracy in AR processes.
A Review of Professional Skills and Functions for Credit Analyst
1. Credit Analyst Duties
- Collection Metrics: Ensuring past due and collection metrics are achieved on a moderately complex portfolio of accounts.
- Customer Contact: Establishing and maintaining contact with customers concerning past due invoices, payment trends, resolution of disputed invoices, and other matters related to receivables.
- Functional Interaction: Interacting with a variety of functional areas at various business sites related to customer disputes, invoice copies, proof of delivery, contract/PO issues.
- Cash Forecasting: Providing monthly cash receipt forecasts and various analysis.
- Credit Terms: Recommending credit terms for new accounts.
- Payment Analysis: Analysing payment trends and making recommendations.
- Customer Satisfaction: Promoting customer satisfaction at all times.
- Credit Underwriting: Performing comprehensive rigorous credit underwriting, evaluating capital structures, company fundamentals, industry trends, and credit agreements.
- Capital Modeling: Creating modeling for capital preservation and downside protection.
- Credit Memoranda: Authoring formal credit memoranda and recommendations.
- Investment Presentation: Presenting investment recommendations to the portfolio manager and ZCCP’s Investment Committee.
2. Credit Analyst Details
- Account Management: Manage assigned customer accounts, collections, and reconciliation.
- Financial Analysis: Analyze and interpret customer financial status and provide recommendations on credit limits to management.
- Credit Policy Compliance: Ensure the company’s credit management policies are followed.
- Credit Monitoring: Monitor and report any credit concerns to management.
- Team Collaboration: Work with sales, Customer Service, AR Accounting team, and customers to resolve credit issues and provide assistance and direction.
- Process Management: Ensure AR credit and collection team daily, weekly, and month-end processes are completed in a timely and accurate manner.
- Transaction Processing: Process debit/credit memos and journal entries related to AR activity.
- Customer Support: Respond to customer (internal or external) inquiries relating to statements, invoices, account lists, etc.
- Sarbanes-Oxley Compliance: Actively participate in Sarbanes 404 controls focused on AR Credit/Collection.
- Sales Tax Assistance: Assist with customer sales tax inquiries and information.
- Process Improvement: Provide recommendations on processes and procedures that improve efficiency and accuracy.
- Portal Management: Invoice and manage customer online portals for accounts requiring portal billing.
3. Credit Analyst Responsibilities
- Credit Analysis: Analyze credit and financial information (e.g., credit reports, tax returns, financial statements) to determine credit risk for commercial lending with minimal direction.
- Data Entry: Enter financial figures into programs to generate ratios and assist in determining applicant creditworthiness or assessing changes in the credit risk profile.
- Borrowing Limit Review: Review and enter accounts receivable/payable agings and inventory reports to ensure borrowers remain within borrowing limits for formula-based revolving lines of credit.
- Cash Flow Projection: Generate cash flow projections using key drivers and assumptions.
- Ratio Analysis: Perform reconciliation, calculation, and interpretation of ratios, comparative, trend, and market analysis, and accurate cash flow analysis with stress-testing.
- Client Issue Resolution: Work independently with Credit and Relationship Managers to identify client issues and make problem-solving decisions to meet credit needs.
- Loan Underwriting: Underwrite loan renewals, generally for requests of $500,000 or less, when time permits.
- Policy Compliance: Understand and comply with credit policy and procedures.
- Delinquent Loan Review: Assist lenders in reviewing delinquent or watch list loans and make recommendations for modification or restructuring when appropriate.
- Business Advisory: Identify opportunities to provide additional advice or information to business members during underwriting and share insights with lenders.
- Turnaround Time Management: Consistently meet or exceed established turnaround times for completing loan analysis.
- Inquiry Response: Respond to staff and member inquiries received by phone or email, both directly and through the department helpline.
4. Credit Analyst Job Summary
- Cash Flow Analysis: Perform cash flow and financial statement analysis.
- Trend Interpretation: Categorize and use business member information to interpret financial and industry trends.
- Risk Evaluation: Collaborate with business lenders to evaluate risk and establish creditworthiness, joining meetings with members when necessary.
- Loan Structuring: Provide recommendations on loan structure and covenants.
- Credit Memo Development: Collaborate with lenders to develop credit memos and presentations for review by lending officers or loan committees.
- Lender Communication: Maintain ongoing communication with business lenders regarding loan status.
- Appraisal Review: Conduct appraisal reviews and update credit memos and presentations.
- Covenant Monitoring: Monitor existing loans for compliance with loan covenants.
- Loan Covenant Verification: Monitor and verify construction draws, borrowing base certificates, and other loan covenants.
- Loan Reviews: Work with lenders to complete annual reviews and renewals for existing credits.
- Risk Rating Assignment: Collaborate with lenders to assign risk ratings to new and existing loans and identify any changes in the borrower's capacity to meet loan terms.
5. Credit Analyst Accountabilities
- Loan Underwriting: Underwrite mortgage, consumer, and select small business loan applications.
- Pipeline Management: Manage and oversee an assigned pipeline of mortgage and/or consumer loan applications.
- Loan Application Processing: Initiate the loan opening process and submit complete applications for pre-approval.
- Eligibility Determination: Determine loan eligibility based on initial review and ensure timely preparation of required disclosures within regulatory timelines.
- Risk Analysis: Analyze risk factors to underwrite loans according to company and investor guidelines.
- Risk Mitigation: Mitigate loan risk through assessment of applicant credit quality, repayment ability, and collateral valuation.
- Cash Flow Analysis: Analyze tax returns and financial statements to determine applicant cash flows and repayment capacity.
- Loan Presentation: Prepare formal loan presentations for senior colleagues and loan committees.
- Credit Authority: Exercise discretion and independent judgment within assigned credit authority.
- Document Scrutiny: Scrutinize supporting loan documents to ensure accuracy and underwriting authentication.
- Client Negotiation: Occasionally negotiate loan-related transactions directly with clients professionally and courteously.
- Partner Interaction: Interact with internal and external business partners regularly.
- Regulatory Compliance: Apply relevant concepts, policies, and regulations consistently throughout the lending process.