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You’re not likely to lend money if you’re not sure you’ll get it back. When you sell goods or services to someone, you’re making a loan. That’s why it is important to run a credit check to determine your customer’s capacity to pay you back.
A credit assessment is recommended in the case of: see credit report for more details.
Reducing costs is one reason. See outsourcing for more details.
To differentiate between a negligent customer and one who is unable to pay, ensuring better collection results at little cost.
Too often, we take things for granted. For example, we pride ourselves on longstanding customers. See collection for more details.
Unfortunately not. However, every company should apply the accounting norm of 0.5% of annual sales volume, a provision that can help avoid a significant imbalance in annual profits or losses. It might also turn into a risk management solution for certain marginal customers with whom you wish to do business while ensuring greater profitability given the risk factor.
It’s simply a matter of observing certain formalities. An excellent means of protection. See construction credit for more details.
To eliminate any doubt regarding the business relationship (privity) and agree on legal obligations that provides you with the best protection.
A world of difference. A trade reference sheet gathers certain information about your customer, while a credit application (contract) is a management tool. See credit application for more details.
No, see credit application for more details.
When the appropriate contracts have been signed, you can carry on sales without registering securities for each transaction. We have on hand all the contracts you need to secure your sales. See contract description for more details.
Unfortunately, many clients neglect managing credit risks by buying credit insurance. Insurers often limit the amounts they authorize, reject potential customers meaning that in the case of default, you assume the cost of the deductible and fees. In case of obvious litigation, claims are refused. That’s why you can’t rely on insurance to entirely manage your accounts receivable. However, as explained on this site, setting up a sound credit policy will enable you to recover eventual costs. Insufficient knowledge of your customer can harm your growth. See credit policy for more details.
No, your lien must have been duly registered. See registering for more details.
Use the following chart to gauge the consequences based on your profit margin.
“I handle formal notices in-house” is something we often hear. It shows a lack of understanding regarding the effectiveness of third party intervention. When a collection agency and credit investigation permits to use a formal notice, the psychological impact is significant. Customers start to worry about their credit rating. Our experience confirms how using this service makes all the difference and gives effective results.
Every business should have a written credit policy in place, see investigation for more details.
It should of the highest importance, because it’s a measure of your company’s treasury operations. The goal is to keep cash flowing, reducing bank loans (credit lines) and allowing you to benefit from the best discounts from major suppliers. Other considerations include the potential reduction of bad debt and an increase in sales frequency. See the section CREDIT POLICY, which explains how to attain these results. DSO is calculated in the following manner: