Spotting and Reacting to Changes in Customer Habits
In This Chapter
Setting controls to maintain cash flow
Avoiding payment slowdowns
Dealing with customers’ excuses for slow payment
Handling changes in customers’ payment behavior
Tracking down elusive customers
Arguably, the most important skill of a credit and collections professional is the instinct to recognize and react to changes in customer habits that signal trouble. To avoid trouble, you must listen to your instincts and follow up on your hunches. In this chapter, we give you some pointers for handling potentially troublesome situations.
When goods and services flow smoothly and payments are made promptly, you and your customers are more comfortable with your relationship. For the most part, your customers won’t object to your close monitoring and your eager follow-up for payment of invoices. Indeed, down the road, customers that take offense at your close monitoring are usually the ones that give you the most trouble with payments and collection.
General Controls for Keeping Your Cash Flow Steady
Keeping a steady cash flow is difficult in good economic times and a real challenge when recessionary pressures set in. A domino effect occurs when your customers fail to pay your company on time — resulting in your company’s inability to pay its creditors on time. To keep your cash flow positive and sufficient to cover your company’s bills, you must implement some general controls as part of your credit policy. Some ...