CoatingsPro Magazine

NOV 2015

CoatingsPro offers an in-depth look at coatings based on case studies, successful business operation, new products, industry news, and the safe and profitable use of coatings and equipment.

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Page 18 of 83

COATINGSPRO NOVEMBER 2015 19 supplier or service provider, if I say 'no'?" • "Does the customer have a large secured creditor?" • "What is the 'word on the street' regarding their situation?" • "Is the customer offering additional security or a personal guarantee in exchange for new shipments or services provided?" Most CEOs feel that the credit department only has to call up and request a credit report from any reporting organization and that would determine what amount of credit a potential or existing customer should receive. T he truth is, though, that it also takes numerous man hours to determine what credit line potential or existing customers should receive. T he references that the potential or existing customer gives to the sales department, which in turn are supplied to the credit department, should be checked out and scrutinized. W hen was the last time you recall someone giving a bad reference if they knew that reference was going to be checked? T he credit manager should not only verif y the references given by the potential or existing customer, but they should also f ully investigate related organizations. Most industries in today's marketplace also have some form of "Credit Interchange Group," which supplies a great wealth of information that's useful in setting a credit line for a potential or existing customer. But for the information to be useful, credit managers must give honest answers. In most organizations, the credit manager must also wear the hat of the collection manager. T he credit execu- tive must then utilize his or her ow n resources in order to make decisions on whether to continue extending credit or whether to cut off continued goods and ser vices and begin to pursue collection on the claim in a timely manner. T hey must also know when to take further action to protect their company's interest. Other key components in the decision-making process are as follows: • You must be prepared and have your ducks in a row upfront either way if the claim ends up becoming a collec- tion issue or not. • Check your documentation! • Do you have a credit application on file? Lawsuit Leverage If the collection doesn't happen and a credit hasn't been repaid, you may be forced to go into legal action. From a Money Matters Wr i te in Re ad e r In q u ir y #34

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