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Storm Warning: Private Company Red Flags

Your Virtual Credit Manager

The Customer Delinquency Challenge Successful accounts receivable (AR) management involves minimizing past due balances to ensure steady cash in-flows and limit bad debt losses. In contrast, customer bankruptcies or other defaults typically cause the loss of most, if not all, the AR owed. Do you need help improving cash flow?

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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. The Impact of Bad Debts The problem with larger customers who chronically pay late is the increased probability of a bad debt loss, which is costly.

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How Are Your Customers Doing?

Your Virtual Credit Manager

This company was fortunate to avoid significant bad debt loss until Ames Department Stores, Kmart, and Fleming Foods (a distributor) all filed bankruptcy within the same year. Bad debt losses were understandably huge. Making uninterrupted sales was deemed more important to their distribution network.

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Are Your Credit & Collection Policies Aligned with Company Goals?

Your Virtual Credit Manager

In most companies, sales are given a strong priority over the risk of slow payments and bad debts regardless of gross margins and the resources the credit and collection function can provide to mitigate risk. Customers default. Photo by Piret Ilver on Unsplash ) Too often, credit and collections are an afterthought. .”

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Gain Leverage Over Slow Paying and Risky Customers by Holding Up Their Orders

Your Virtual Credit Manager

Meanwhile, customers who previously were approved during your initial credit evaluation may become past due, max out their credit limit, or, worse yet, be in a deteriorating financial situation, all of which become even more likely when the economy is volatile—the result: cash flow problems and more exposure to bad debt losses.

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Big Company Red Flags You Can't Afford to Miss

Your Virtual Credit Manager

If you are not on the lookout for customer red flags, especially those raised by public firms and other large enterprises, you will be at increased risk for incurring bad debt losses. Trustee Program estimates that bankruptcy filings will double over the next three years. Register Do you need help improving cash flow?

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Is Your Company Ready for a Downturn in the Economy?

Credit Research Foundation

Since then, we’ve weathered the COVID-19 pandemic, which many experts predicted would lead to a wave of defaults and business closures. Does my team have the expertise and experience to keep us ahead of potential default situations? During that period, the U.S. economy shed over 8.7