Tag: Best Practices

Payment delinquency is a common but costly reality for credit professionals. Although cash flow issues are the primary cause of payment delays, sometimes the fault lies with internal inefficiencies on the servicing company’s end. Distinguishing between the two causes can help determine who is responsible for the delay and how to respond.

Every credit manager knows bad debt all too well. Mounting bad debt can send ripples throughout a company, as quarterly targets are missed, budgets tighten and meaningful investments are delayed as cash flow cramps.

Business-to-business (B2B) credit has come a long way from 30 years ago. Back then, you either had to make a phone call, mail a letter or knock on someone’s door to conduct business. Nowadays, credit professionals can work virtually from anywhere, holding virtual meetings, emailing documents and sending messages instantaneously.

A thorough credit investigation is a hallmark of a strong approach to extending credit. Learning the ins and outs of a company’s operations, their financials and their ability to pay in a timely manner informs the credit manager on how to best extend credit without putting their company at risk.

Artificial intelligence (AI) has taken a life of its own, integrating itself into almost every facet of our daily lives. Over the years, its use has only increased in both professional and personal settings. However, AI is only as useful as the information you provide it, and without the right context, it can generate false or inaccurate responses.

In credit management, your day-to-day work varies. One day you might spend hours determining the best terms for a customer with a rocky credit history while on others you might be settling a mounting pile of disputes. No matter what the day brings you, data is likely playing an important role in how you make those tough credit decisions.

Having a customer who consistently pays on time and represents a large portion of a company’s earnings may be a dream for the sales team, but for credit managers, a single customer dominating their accounts receivable prompts concerns about concentration risk.

When assessing a customer’s creditworthiness, things are not always as they seem. A business may have strong cash flow but still carry crippling debt, or it may have a poor payment history yet still maintain substantial reserves. Without closely evaluating financial statements, credit professionals risk making uninformed and potentially costly decisions. However, while financials may not tell the full story, the person reading them can.