A/R Optimizer » Improve Credit Underwriting

Check References

Depending on the type of business you have, there are certain criteria one should watch for when making a business deal. Some questions to ask are:

• Where does this person usually do business?
• What does his or her credit history look like?
• What other major purchases is this person currently pursuing?

Researching credit history on a customer may seem like a tedious task, but it will be worth it in the end and could save you a lot of money. The best way to do this is to check at least three (3) references with which the client has done business.

Supervisor Approval

So what happens if the customer’s credit is poor or their payment history is greater than 60 days?

If the customer doesn’t have an ideal credit history, you are not obliged to offer an approval for a sale. The delay of a customer’s payment 60 days or more might be harmful to the company. The best way to deal with this type of situation is to gather judgment from the supervisors. They are also more suitable to deny or approve this type of customer because they are a higher decision-maker.

The supervisor may recommend getting a deposit from the customer before any work is performed or goods are delivered.  Once you use the deposit, the company can decide whether to ask for another deposit to continue work or whether the customer has demonstrated their creditworthiness to a degree that no further deposit is necessary.