In the world of business there is only one thing that is more valuable than money; that is information. Information is what keeps you on top of the game and puts you in the best position to collect from your client.
Within credit applications, a plethora of information can be found. Information such as current and former addresses that are personal and business related, the different lines of credit in use and the interest that is included on the past due payments, and also the information of their references that know the character of the customer.
Now what good is all this information to you? When analyzed and used properly, this information can prove to be a jackpot. However, it is important to be able to identify a few of the red flags that are included in these credit applications.
When it is seen that a customer is returning to their old bank, it is usually is a sign that they are in trouble. Find the contact information for this bank and give them a call regarding the customer and his debts and behavior.
Next to their banks, the one who may have the next amount of insight on the customers financial situation is their landlord. Whether the customer is still there or not, the landlord has valuable insight. The customer may have been evicted recently, or has moved to a smaller space which shows downsizing. However, the customer may have moved to a larger space which may show growth. Moving to a larger space shows that there is more money to be spent, which means there should also be money to be able to pay off the debts owed.
References given in the credit application are insights into what they character of the customer is like. These references should be related to the industry that he/she is a part of. By providing a look into how the customer conducts his/her business, the likelihood of the account being collected and the difficulty it will pertain can be revealed. These references should be in the order of largest to smallest and be readily available.
At times the wording on these may be so vague that they are unable to be fully upheld, but they provide a gateway to personal guarantees in legal binding agreements. By analyzing and depicting these guarantees, you can dictate the way in which the customer will move in negotiations and guide discussion with that in mind.
When dealing with a partnership, corporation, or LLC, you will be dealing with an executive and their partners. A credit application will be able to designate the percentage of the company owned by the customer and his/her partners. However, if the company is an LLC and it is owned by a sole person it becomes much easier to go after their personal assets.
A superhero often has their utility belt with tools that help them get their job done. The credit application is just one of the few tools that we here at Kearns Brinen & Monaghan use to collect the debt from your delinquent customers. Let us, the pros, handle the collection of these debts and satisfy your needs. We may not wear tights and capes, but our utility belt is packed and ready to go.