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Extending credit to customers?

Watch out for these early warning signs.

September 14, 2016 by Reynolds & Rowella Leave a Comment

Once you have extended credit to a customer, you have a stake in continuing the relationship even if you suspect trouble is brewing. You don’t want to crack down on a good customer too hard too soon; yet you don’t want to be “taken” by a debtor who has become unable or unwilling to pay. The problem is distinguishing between slow payers and no-payers.

What you need is an early warning system to detect a credit problem in the making so you can stop additional sales to that customer and begin collection procedures in earnest. Here are some telltale signs of an account that is turning sour.

● The debtor has begun paying erratically, settling up on smaller invoices while larger ones get older.

● The debtor fails to return your phone calls or shows unusual annoyance at your inquiries.

● Your requests for information, such as updated financial statements, are ignored.

● The debtor places jumbo orders and presses you for a higher credit limit.

● Despite the problems you are having, the debtor tries to coax you into providing a good credit report to another supplier.

Any one of these hints of trouble can mean it’s time to turn up the heat on your collection efforts with this debtor, and make no more sales unless they’re cash on delivery.

Contact our specialists at consulting@reynoldsrowella.com for more tips.

 

Filed Under: Extending credit to customers Tagged With: Accounting Services Fairfield County CT, Best Accounting Firms Fairfield County CT, Exending Credit to Customers, Tax Returns Fairfield County CT

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