“It is unfortunate that in today’s economic climate we are faced with situations that challenge our ability to keep business moving forward. Being proactive instead of reactive will assist with minimizing your business risks. Whether you are a business owner, in charge of sales or even a salesperson moving through the ranks, you will be faced with challenges, such as loss in potential profits, which can trickle down to affect sales commissions, shortages of contracts awarded for materials and/or craftsmanship, and labor. This brings me to the point of this article -- protecting your assets by making smarter decisions in regards to collecting money from your customers.”
If you have Clients that Owe YOU Money and have showed any signs that they are not willing to work in good faith, you must make a decision and take action! The nonchalant attitude or not making this a priority and giving debtors to much time to strategize increases your odds on losing 100% of what’s owed. You are now in competition with the banks calling in their notes and the IRS as their revenues are down, more so now than ever.
Signs to look out for begin when your clients are starting to not return phone calls, drag on with excuse after excuse, saying payment is on its way and it never shows up, etc. These are all Red Flags and I assure you that something's going on. They could be buying themselves time to SHUT THE COMPANY DOWN and transfer all current assets to the new Company, Simply shut down their operation and file Bankruptcy, or simply be using your money as an INTEREST FREE LOAN. This is happening more frequently nowadays. Products are being sold and not paid for, contracts are being executed and contractors aren’t getting paid, banks are putting the brakes on projects in various stages, loans aren’t being distributed, credit lines are being cut off or minimized, and many suppliers want to get paid upfront for materials needed to begin the jobs. These are just a few signs of the times that our economy has been forced to implement due to the mortgage crisis, stock market plummeting and many other contributing factors. Many people are living on borrowed money and above their means; we need to get back to the basics. You must do your due diligence before the execution of any deal.
Steps of Proactive Procedures:
Take advantage of doing some preliminary background investigations including Credit Checks, Bankruptcy Watches, Asset and Liability Investigations, checking references and talking to other industry professionals in your area and check to see if your prospect clients or existing clients have any pending lawsuits against them either where they are the plaintiff or the defendant. Below is an outline of customized searches you can utilize outside of the standard D&B. Paying for these services will have to be deemed whether worth the investment during the due diligence phase of your credit granting process pending the amount of the credit requested……
Basic Search Civil Filing Search
Corp status and date of incorporation Lawsuits (subject named as defendant)
Officers Lawsuits (subject named as plaintiff)
Phone numbers Liens/ Bankruptcy Information