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The best time to manage risk and control delinquency is when you
are evaluating a credit applicant.
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Another time to do so is when performing periodic updates on active
customers.
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The more flexibility you demonstrate when dealing with delinquent
customers, the wider you open the door to continued abuse of your
company's terms of sale.
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Often, the louder a customer protests about not getting the credit
limit they want the more likely it is that the customer/applicant
has something to hide.
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When presenting a payment plan to a delinquent debtor, credit
professionals need to emphasize that this is the MOST they can do
to help the debtor. If the debtor fails to make even one payment,
demand should be made for the entire balance due.
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Never re-renegotiate a payment plan. You have already made a huge
concession by accepting 'any' extended payment proposal. If a debtor
tries to renegotiate this deal, chances are pretty good that you
are never going to be paid in full.
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Creditors should make it as easy as possible for customers to
report problems on invoices [such as shortages or pricing problems]
by including a toll free help number on their invoice as well as
on the packing slip.
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Once you recognize that salespeople are trained to look ahead,
it becomes easier to understand why it is so hard to get them to
address and resolve problems involving sales and shipments that have
already been made.
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The fact that you have 'Never lost a penny' selling to a particular
customer in the past does not guarantee payment in the future. If
past performance were a perfect predictor of future actions, we would
all move to Las Vegas and become rich at the Casinos.
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Customers have a vested interest in telling no one [especially
creditors] they are considering a bankruptcy filing. Why? Because
this news could cause a 'run on the bank' in which trade creditors
lose confidence and refuse to ship on open account terms.