With a little extra effort, you can get the full picture of a customer and protect yourself from risks beyond just bad debt – like slow pay, dispute risks and fraud. You have lots of information at your disposal to uncover what kind of customer you are getting.
For example, you can stop payment disputes before they happen. A lot of your profit margin— not to mention time and frustration—can get burned up in resolving disputes. Your credit process should identify customers with a history of complaints so you know who you are dealing with before you extend credit.
When conducting your credit check, make sure to cover these essential areas that can provide insight into a customer who may be prone to complaints:
• Ask dealer references about how many complaints the contractor made and how often the dealer needed to do something to make it right (regardless of fault).
• Pull Better Business Bureau reports to see the type and frequency of customer complaints being made against a contractor and how they are settled.
If a contractor has a history of complaints with other dealers, expect that you will get the same treatment. There is also a direct correlation between how many complaints a contractor gets from his customers and how many he will take up the chain to dealers like you.
Learn how to spot other signs of credit risk such as slow pay and fraud, by reading the full article.
About the AuthorMore Content by Scott Simpson