This economy is constantly throwing new challenges at business owners. Supply chain issues, a chip shortage, a labor shortage, and constantly rising prices are squeezing the profit margins of many businesses. With these pressures a business owner cannot afford for a customer to not pay an invoice.
Deciding which customers to extend credit to is getting even tougher. Many companies that were once household names are now at the brink of bankruptcy. There are several prudent steps business owners should take to help mitigate their risk of non-payment.
- First, make sure you know who your doing business with. Get a valid, signed purchase order from your customer. The purchase order should include invoicing instructions and payment terms.
- Now that you have your customers full name and address, run a credit report. There are several companies that run general business credit reports. Some industries, like transportation, have companies that specialize in credit reporting for that industry.
- Understand what has to happen for your customer to accept your invoice and enter it into their payment system. Get all necessary approvals as soon as your project is completed.
- If your project is large enough, you may consider buying credit insurance. With credit insurance in place, you will no longer be concerned with non-payment. Again, understand your deductible, and the method and timeline for submitting a claim.
American Receivable has helped our clients manage their credit risk for over 43 years. Through both good and bad economies, American Receivable has helped it’s clients successfully mitigate their credit risk. We do this by using multiple credit reporting agencies and our own extensive credit files. Our management has weathered every economic storm since 1978, this experience is critical to guiding our clients through ever changing market conditions.
Call us today to find out how American Receivable can help you or complete our quick online application form to find out how American Receivable can put your company on the road to success.
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