Times are tough for credit managers. Here are some tips to help prevent financial disasters:

  1. Increase participation in your department in industry credit groups. This helps to gain insights about customers and potential customers.
  2. Be more insistent with applicants who are signing personal guarantees as a requirement of expanding open account credit terms.
  3. Request that financial statements are provided more than once a year by customers.
  4. Request a parent company to sign an inter-corporate guarantee when selling to subsidiary of a company who’s pattern of payment of financial condition is “disturbing” to you.
  5. When calls relating to past due balances, increase their frequency as well as taking away grace periods before the first of the calls to collect.
  6. Demand that all problems your collection staff are having are reported to you.
  7. Be willing when it comes to leverage in order to get a payment from a customer; use older holds.
  8. If an account continues to become severely past due, do not ignore it once the balance is paid. You should review the account and decide if you should keep it open or not.
  9. Large losses are hard to recover from and to deal with. Consider using credit insurance in prevention of these types of losses.
  10. Have a strong working relationship with sales.
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