5 SIMPLE THINGS THAT MIGHT SAVE YOU FROM A BAD DEBT

If you’ve extended credit to a business, the following tips may alert you to a looming problem and assist you to avoid bad debt.

  1. A CHANGE IN PAYMENT PATTERNS

If a well paying customer suddenly changes their payment pattern this could indicate there is something else going on that you need to be aware of.  Sometimes it could be as simple as the person you dealt with moved on and so your invoice is not being actioned appropriately, but it could mean that they are having cashflow issues, make contact asap.

  1. A CHANGE IN PURCHASING PATTERNS

If a customer who pays on the slower side suddenly increases purchases this might be an indication that they have had their account with another supplier put on hold.  You might need to consider a credit limit review or an update to your credit application.

  1. AN INCREASE IN REQUESTS FOR TRADE REFERENCES

If your customer is applying for credit elsewhere you may be approached for a Trade reference.  If a customer is struggling to meet payment terms and an account has been placed on hold they may be applying elsewhere to get product.

  1. AVOIDING YOUR CALLS

We’ve all been there.  The customer who always paid on time and took our calls is now avoiding us.  Referring back to your Credit Application form can assist greatly in this instance.

  1. THE CUSTOMER HAS TOLD YOU THEY HAVE CASH FLOW PROBLEMS

If a customer has advised you that they are having cash flow problems you may need to consider reviewing their credit limit and ensuring that you have an arrangement in place that will deal with any outstanding debt.

In all instances it is important that you act quickly to ascertain what the situation is and if it looks bleak, don’t hesitate to lodge your debt with Tasmanian Collection Service.  We are experts in dealing with bad debt and statistics show the quicker you lodge, the better our chances of recovery!