Delinquency Early Warning Signs
Alert entrepreneurs will identify early signs of potential payment trouble with customers. Awareness starts with keeping your eyes open and not being afraid of finding something you truly may not want to see; Good Customers, Gone Bad!
Following are a few signs that may signal trouble:
- A normally prompt paying customer begins to take longer and longer to pay their invoices.
- A small customer suddenly places an unusually large order.
- Fellow business contacts report late payments from the same customer.
- A new customer calls and comes out of nowhere who insists on having an exceptionally large order filled quickly.
- A sale is not a sale until the invoice is paid. Until the invoice is paid your goods and services are simply a gift. Remaining alert and cognizant of your customer's changing behaviors, both before and after sale will go a long way in reducing your DSO (days sales outstanding) and chances of unwittingly financing your customer's business operation.
From 20th century US Humorist & Cartoonist James Thurber (1894-1961): "Let us not look back in anger or forward in fear, but around in awareness."
…Some food for thought. Awareness pays.