Credit Policy for businesses and how to extend credit and manage credit risk

Look for the following signs you may need to hire a debt collection service:

• A new customer does not respond to a first letter or phone calls.
• Payment terms fail. In some cases irresponsible consumers pay when and if they want to. This group is responsible for 25-50% of the cost of collections. Cost and potential losses are reduced by quick action.
• The customer makes repeated and unfounded complaints.
• The customer totally denies responsibility. (Not if you have a signed credit application!!)
• Delinquency co-exists with serious marital difficulties. Be aware!
• Repeated delinquencies occur along with frequent changes of address or jobs. This group is responsible for 90% of all "skipped" accounts. A "skipped" account is a consumer who has moved without informing creditors or leaving a forwarding address.