November 8, 2024
You’ve probably heard about the three most important factors in real estate: location, location, location. Communication plays the same role in credit risk management.
Experience shows that regular contact with a business partner is the richest source of information. This information is also more up-to-date than financial data published retrospectively. Regular contact also helps to build trust and, consequently, to find win-win strategies.
When payment delays occur, it is necessary to check what is behind them. Pay attention to explanations, agree on a plan of action for the future and follow up with the partner. If it is a long-term partner who has a history of always sticking to agreements, your level of alarm and action should be different from partners with a history of non-payment and a poor credit record.
If the partner continues to fail to pay, a “stronger arsenal” should be brought in. This is the moment when the back office should take over the communication with the partner. You smell a “good cop, bad cop strategy” – that’s right, it is. This helps to maintain a good relationship between salespeople and customers, and you bring an unencumbered interlocutor into the process.
The greatest art of this process is knowing when to move from one stage of communication to another.
Your experience?
