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While multiple factors can contribute to an organization's financial downfall, insufficient cash flow is typically the primary trigger for bankruptcy proceedings. Ineffective AR management and poor performance inevitably result in cash flow challenges. Your Virtual CreditManager is a reader-supported publication.
Among other things, commercial bankruptcies have been steadily climbing over the past year. The experts at Your Virtual CreditManager are ready to help you improve cash flow and reduce AR risks during these challenging times. Update creditapplications: every 5 years, unless triggered sooner by a change in the business (e.g.,
We don’t, however, want to minimize the importance of the credit side of the equation. As discussed in a recent post , gathering customer information doesn’t stop with the creditapplication. You put your firm at risk by limiting credit assessments to only new customers, which is too often the case.
After, the Great Recession of 2008, commercial bankruptcies peaked in 2009 and did not drop below pre-recession levels until 2012. Department of Justice projects a substantial increase in bankruptcy filings. Trustee Program has estimated that bankruptcy filings will double over the next three years.
Ensuring Successful Debt Collections Even with these headwinds, there are steps trade creditors can take to improve their collections game: Be Proactive: It starts with a comprehensive creditapplication and vetting process and is complemented with clear communications about terms, the billing process, and the expectation of on-time payments.
A business with a strong credit history is more likely to be considered creditworthy than one with a weaker credit history. A business's credit history also includes any past bankruptcies or defaults, as well as collection agency placements. Click here for more information about creditapplications.
Processing Delays There are several AR activities that often take longer than they should and therefore cause delays: processing creditapplications, approving orders, generating invoices, and posting payments. Poor CreditManagement' We’ve already talked about how poor credit decisions can impact sales and collections.
To continue reading and learn about eleven events or circumstances that should trigger a collection response, in addition to when a customer goes past due, you need to be a paid subscriber to Your Virtual CreditManager. The experts at Your Virtual CreditManager can help you bring in the cash.
Cash Flow is the number one cause of small business bankruptcies. Without effective AR management, your cash flow is subject to entropy as the AR ages, as well as to the shocks caused by customer defaults. Buy Credit Reports In regard to collections, a well defined process is imperative. Cash is king.
please take advantage of our July Sale to lock in a subscription to Your Virtual CreditManager for just $34.99 Subscribe now Do you need help managingcredit and collections? The experts at Your Virtual CreditManager are currently offering 33% off our standard small business consulting rates.
A business credit score is a rating whose goal is to demonstrate how financially responsible a business is as well as its potential for profitability. The number and type of creditapplications, payment history, history of debt, company structure and personal credit score of the founders or owners all affect a business credit score.
Each one maintains a credit file on every adult American who has ever applied for credit or engaged in a financial transaction reported to them. Credit card and loan bills. Bankruptcies and tax liens. It’s usually best to not let a lender pull your credit until you’re satisfied they meet your needs in all other ways.
This third party can be responsible for reports such as aging reports, scheduling payment reminders, tracking and collecting overdue invoices, and identifying high-risk customers to avoid extending more credit than they can realistically take on. These modules include: CreditManagement and Monitoring. Cash Application.
3) Bankruptcy Proceedings: If a debtor owes more than $15,000 in total debt, a creditor may file for bankruptcy against the debtor. When a bankruptcy case is filed, the interest on the debt also stops growing. The court selects an officer to handle the process.
What if you need that down the road for a bankruptcy filing? Perhaps you’ve experienced some or all of these issues with your paper credit files. Fortunately, now there is a way to store credit files electronically and access the information from your desktop.
Your Virtual CreditManager is a reader-supported publication. Besides driving process improvement, the experts at Your Virtual CreditManager can apply default risk probabilities & other financial benchmarks to your AR portfolio that reveal actionable credit & collection insights.
No management role is exempt. This is particularly true for CreditManagers. By its nature, the credit and collections function requires advance planning and strategies to meet aggressive targets, how best to deploy and develop staff resources, and to provide continuous process evaluation and improvement.
Meanwhile, the number of commercial bankruptcies is accelerating. In February, Epiq Bankruptcy reported that commercial Chapter 11 bankruptcy filings climbed 118 percent year-over-year. The experts at Your Virtual CreditManager are currently offering 33 percent off our standard consulting rates. A Case in Point.
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