Do’s and don’ts Credit Management Africa during the Order to Cash cycle

Do’s and don’ts Credit Management during the Order to Cash cycle My name is Eric Berendsen In credit management for 25 years Working in the African market since 5 years Summary Short introduction to Boart Longyear The do’s and don’ts for credit management during the O2C cycle Q&A

Boart Longyear Ltd Boart Longyear is a global mineral exploration company founded in 1888. It is headquartered in Salt Lake City, Utah, United States. Listed on the Australian stock exchange (ASX:BLY) Regional offices and operations are located in the Asia-Pacific region, North and South America, and EMEA. The company provides mineral exploration services and drilling products for the global mining industry and also has a presence in drilling water exploration, environmental sampling, energy, and oil sands exploration. As of September 2013, it employes more than 6,000 people.

What is so special about Africa form a business perspective? Large natural resources Political instability Bad infrastructure Poor financial infrastructure Growth opportunity

The order to cash cycle Customer Order entry Order fulfillment Deduction Cash application Collection Invoicing Distribution Order fulfillment Order entry Customer

Customer Who is your customer Where to get additional (financial) information Payment terms T & C’s

Order entry Order fulfillment Get correct PO Which T&C’s are applicable Order release process

Distribution INCO terms Customs Inspection requirements

Invoicing Check what is required by law Currency Language Required CFD’s Getting in on time to the customer

Collection Who is approving Who is paying Which bank to use What currency LC’s

INCOTERMS

Cash application Deduction Getting bank statement Currency Taxes Deducted cost One last thing…….

Example payment application Customer in Ghana is send an invoice of 118K (including 18% VAT) Customer is exempted (doesn’t have to pay tax) Customer deducts fuel invoice of 20K Customer may deduct 2% for early payment Payments we’ve received were 118.000 USD 18.000 VAT 5.000 WHT 2.000 Early payment discount 20.000 Fuel invoice 73.000 To pay in USD 36.500 Payment received in USD 80.000 Payment received in GHS

Takeaways and Q & A Go through your own O2C cycle to determine possible pitfalls Make sure you’re actively involved in the O2C cycle as early as possible Contact specialized organizations

Thank you! Eric Berendsen Manager Credit & Collections EMEA Boart Longyear 12 Avenue des Morgines CH1213 Petit-Lancy, Geneva Switzerland Tel.: +41 22 709 08 84 Mobile: +41 79 176 48 98 eberendsen@boartlongyear.com