Let’s start off with a couple questions:
- Does a recovering economy force businesses to review their collection procedures?
- How do you determine how much credit exposure your company is willing to gamble?
These questions may seem a little strange; however they work hand-in-hand more than you might think. When thinking about the answers to the above questions, one must consider today’s business challenges. Issues such as slow economic growth in many industries; constantly changing and evolving regulations; significant changes in extension of credit policies; little-to-no sales growth in some industries; and the rising cost of doing business are some of the most significant. Lowering your credit risk has become a standard best practice and in these times is a necessity to reduce your financial risk when conducting business. With credit terms becoming more stringent, has your company reviewed your collection strategies to align with the same guidelines?
Having a strong receivables partnership with your current agency is critical to balance stricter credit terms and redesign current in-house and external collection efforts to reduce your DSO (days sales outstanding). Strong partnerships with your third-party agency can provide you the ability to tap into their best practices, with many services being complimentary, to assist with managing higher costs, less credit extensions and slower than anticipated sales as our economy continues to rebuild.
In most industries, businesses are in the midst of 2013 sales and budget planning. Do your plans include redefining your business by potentially adding more risk and credit exposure in addition to stronger strategic partnering to maximize revenues?
Share your plans and thoughts with us by using the comment field below!
