Reviewing your client accounts may help you reduce your risk
Your credit policy is the guideline you follow when making decisions about granting credit, reviewing accounts, collecting payments and payment terms.
Did you know that reviewing your accounts on a regular basis may help you reduce your overall risk?
In the process of reviewing an account, you learn many important things that can be a clue that your policies may need some updating. For instance, do you know how many of your approved accounts routinely pay their invoice late? And just how late are they? This could be a sign that it’s time for you to attach a penalty to late pays, place some accounts on hold or tighten up on your payment terms overall.
Each case must be reviewed individually for obvious reasons: No two businesses are the same. Each customer is as unique as the history they create with you. And while it’s important to stick to your own policies, the reality is, you may make an exception for one customer that you wouldn’t dream of making for another. Those kinds of decisions are made by knowing the customer, knowing his payment habits and history and by keeping up with industry trends.
One thing is for sure; you certainly don’t want your own policy to contribute to the late pays. Routine reviews help you make the necessary changes to keep accounts on track.