A Visit to your Debtor might provide the facts that the Figures don't reveal.

The Better Payment Practice Group is urging small business owners to consider the value of a personal visit to their debtors as a means of identifying the risk they face in offering or increasing credit exposure.
The importance of credit vetting procedures should not be underestimated and a face-to-face meeting with the customer at their premises can form an integral part of that process. Accompanying office bound procedures with a personal visit to the debtor can reveal a wealth of information that is free, fast and up to date, enabling small business owners to build a far better picture of their customers.
A visit to the premises not only affords the chance to witness the business and its employees in operation but also provides the opportunity to explore some vital aspects of the business which are not always answered through credit application forms:

• Who are the debtor’s major customers, suppliers and competitors?

• How does the debtor deal with late payment from their customers?

• What is their market share?

• What is their bank’s position?

• What does the debtor’s order book look like?

• What profit does the debtor retain in the business?

• How do they plan to develop their business and what are their ambitions for it?

• What keeps your debtor awake at night about their business?

Peter Rowe, Director General of the Institute of Credit Management says: “It is essential that small business owners recognise the importance of an effective credit management policy. Thorough checks, whether they involve personal visits to the customer or not, must be conducted before a decision to offer credit is made. It would be seen as foolish to lend money to a stranger on the street – so why lend money to a business you know nothing about?”

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