When collecting a commercial debt, it’s important to keep tabs on the financial health of your customer
Knowing what to look for in assessing the financial health of your client is key to staying ahead of trouble. If you see the following 5 warning signs in your customer, it’s time to tighten up your credit policy.
1. Change in ownership.
Be concerned if you call your customer and are referred to an unfamiliar person or the business is using a different name.
2. Deterioration of paying habits.
You’ll notice this if you’ve implemented a process to track paying habits.
3. Broken promises.
This is always a big deal. Promises are typically when things have already reached the “late” stage of payment.
4. Trouble making contact.
When your customer begins avoiding your calls or not returning your calls, it’s a major red flag.
5. Changes in customer orders.
Sudden decreases may signal a decline in your customer’s business.
One unreturned call is no big deal. It happens to us all. But broken promises, an unannounced change of ownership and a deterioration of paying habits IS a big deal.
Part of the process of commercial debt collection is staying in touch, watching for signs and taking action. When you see red flags, immediately implement firm measures to bring the account current. Don’t procrastinate your actions to stay ahead of trouble.
For more helpful information to help you spot warning signs, check out our tips for Matching Your Customers Actions from C2C Resources.
Commercial debt collection has its challenges … but you can stay ahead by paying attention and acting promptly if you spot trouble!