Remove Bad Debt Remove Credit Risk Remove Transactions
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Tackling Customers that Always Pay Late

Your Virtual Credit Manager

This creates cash flow shortages, an increased risk of bad debt, and a significant work requirement to mitigate the impact of late payments. Those who are financially weak (high credit risk), in addition to essentially turning down the faucet for your cash inflow, present a higher risk of never paying for everything they owe.

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Eight Signs a Customer Is Becoming a Problem Debtor

Your Virtual Credit Manager

Incidentally, the higher your gross margin, the more latitude you have in extending credit to marginally risky accounts. Any subsequent collection expenses and bad debt write-offs are more easily recouped through additional sales than if your gross margins are low. Do you need help with your credit policies and procedures?

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Misalignment Between Credit and Sales Spells Trouble

Your Virtual Credit Manager

Here’s a rundown of the issues that arise from misalignment and a lack of risk awareness: Delays Processing Orders : If credit approvals are slow or inconsistent, sales orders may be held up, resulting in frustrated customers, sales reps, and potentially lost revenue. it just might help them pay you sooner!

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Are Early Payment Discounts a Good Idea in Today’s Economy?

Your Virtual Credit Manager

It will reduce your Accounts Receivable (AR) balance and the associated elevated credit risk inherent in a larger AR. Getting customers to pay now rather than later reduces the risk of a default down the road. Invoices need to be generated and transmitted the same day as the transaction or at latest the morning following.

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How Much Credit Should You Extend?

Your Virtual Credit Manager

And when the risk does not warrant open credit terms ; How can we structure the transaction to ensure a profitable sale? Too often, extending credit is viewed as a yes or no function. In reality, granting credit is much more complicated. The goal is not preventing bad debt losses but rather maximizing profits.

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Complete Guide To Credit Control For Business

Know-It Global

It involves managing credit sales and making informed credit decisions, ensuring timely payment from customers, and minimising bad debt. This guide provides a comprehensive overview of credit control practices and strategies that your business can implement to mitigate credit risk, reduce debtor days and boost cashflow!

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AR Data Management, AR Automation, & Accelerating Cash Flow

Your Virtual Credit Manager

Clear from your AR ledger as many of the clutter transactions as possible. Match as many unapplied payments and unapplied credit memos to open invoices, deductions, and debit memos as possible. Refresh the credit risk ratings and credit limits of customers that have not been updated within the past two years.