CREDIT CORNER

 

 

TIME IS MAJOR FACTOR

 

 

With competitive pressures making demands for more and more sales, collection problems are occurring in greater numbers.  Excuses for non-payment will vary and, unfortunately, cannot be entirely eliminated.  Time again becomes the determining collection factor.  Beginning with the first signs of delinquency, definite, individual action should be taken to learn your customer’s reasons for non-payment.

 

1.                 Has the customer made a voluntary effort to explain its delinquency?

 

2.                 Is the excuse for non-payment legitimate?

 

3.                 Has the customer offered or accepted a plan for settlement?

 

4.                 Is the account profitable or does it represent a potential collection expense (or credit loss)?

 

 

A customer, whose business operations have ceased to be profitable and who is past due, is only marking time until pressured to pay.  Or, they may be waiting the time when they can seek relief, compromise or bankruptcy on its own terms or at the expense of creditors.  The longer the money has been owed, the less are your chances of recovery.

 

The greatest credit losses are from accounts between three to six months past due.  Customers in this category call for most attentive, firm collection follow-up.  The day an account passes its due date is the day when your profit is being reduced or endangered!