Today, let’s focus on a common mistake occurring in the SMEs world & what to do about it!
by Evelyne Legaux on 09-09-2021
As an SME leader, chances are you always get very busy doing everything it takes to grow or scale your business and, rightly so, focus resources on all marketing, sales & operations activities required to support your development strategy.
Your sales portfolio likely contains a mix of historical reliable customers with whom a solid trade relationship has been established & more recent ones who still remain relatively unknown.
And, a natural tendency is for you to expect that historical customers will continue to be good payers no matter what!
But, here is the question: how do you actually know that your historical customer is & will remain reliable? Do you believe, just because their payment behaviour has been irreproachable so far, that they will always pay well without you having to worry about it?
If your answer is Yes, then you need to take ACTION NOW before it’s too late!
In a previous blog post, we highlighted the criticality of carrying out a due diligence Credit check when dealing with a new customer.
‘Knowing your Customer’ however does not stop once a new customer is on-board. It should be ONGOING throughout the lifecycle of your trade relationship!
What this means is due diligence checking on customer creditworthiness is NOT a once-off exercise. Instead, it should be performed on a regular basis to ensure that they DO continue to have the capacity to pay your bills! And, if their financial status does deteriorate, then you can make an informed decision on how best to avoid a bad debt & safeguard your own Cash Flow!
Such best practice is vital, even more so in times of uncertainty & economic volatilities. DON’T overlook it!
If this resonates, do get in touch on firstname.lastname@example.org or indeed through our Contact page.
We can help you manage Credit risk & avoid surprise bad debt!