1. Are There Erratic Or Late Payments?
Is your customer trying to change payment terms or failing to comply with your credit agreement? It's likely that they may be suffering from a volatile cash flow.
2. Is Your Customer Making Questionable Credit Decisions?
Did your customer just land an abnormally large sale with a suspect buyer? Be wary of downstream risk. If your customer is not practicing prudent credit management, its mistakes could become your own.
3. Are There New Financial Processes?
Is your customer in the process of securingnew financing or changing banks? They may be doing this because their current bank won't lend them additional funds, so it may be wise to treat them with caution.
4. Do You Hear Excuses, Excuses, Excuses?
Non-stop excuses from your customer for not delivering payments are generally a tell-tale sign that trouble is on the way.
5. Is There An Increase In Credit Checks?
If your customer is experiencing a constant stream of checks fromcredit providers it may signify that the company is having trouble paying its current creditors or is desperate for credit to cover cash flow needs or recover from financial losses.
6. Are There Changes in Buying Behavior?
If the customer starts to purchase erratically after a consistent pattern or increases its purchases dramatically in a short timeframe, you may want to inquire about the reasons behind the behavior change.
7. Are There Changes In Public Perception?
Have you noticed an increase in bad press or public complaints on social media and review sites? If a customer shows signs of skimping on their service and/or products, it could signal trouble.
8. Does Your Customer Keep Asking For Extensions?
Have you been getting unexpected or more frequent requests to extend payment? a one-off extension may be normal but if a new pattern emerges, it may be putting off an inevitable non-payment.
9. Are There Structural Changes to the Customer’s Business?
Broad-sweeping or unusual changes in management could signal a problem on the horizon. Pay attention to changes that don't seem in line with past history -- especially if they bring on a restructuring officer.
10. Is Your Customer Not Returing Calls?
No answer? That’s a problem. If a customer won't contact you after repeated attempts to reach them, it's time to take action.