Keep a close eye on the financial health of your customer
You can sidestep a lot of landmines with defaults just by keeping a close eye on the financial health of your customer’s business.
Things change in business constantly. Some changes are great, like when your client announces, “We’re expanding!” If his business is booming and your customer has to move to accommodate the growth, then moving is a good sign of things to come and his financial health is thriving. On the other hand, if your client makes changes he doesn’t tell you about, like a change of address or ownership, there’s clear cause for concern. His financial health may be failing.
Keeping tabs on the health and welfare of your customer’s business is smart. And you can do this by keeping the lines of communication open and by reviewing your customers credit information every six months or once per year. Anytime you come across new information about your customer, update his credit data and have your customer complete a new credit app or make appropriate additions or deletion to the old one.
If you have a sales force, they can keep a finger on the pulse of your customer’s businesses by taking note of the activity they see when they make an office visit. How do things compare from one visit to the next? Have they heard any industry rumors? If they visit a retail location, they can monitor the customer traffic and the state of the inventory. Is there a healthy amount of activity?
The moment you or your sales team spots a trouble sign, that’s your cue to go on heightened alert. It just may save you trouble down the road.
Monitor the health of your customer to help you spot trouble before it affects your business.