How Do I Know That My Customer Is Having Financial Problems?

In times of recession we are all trying to survive and

sometimes the worst thing that can happen to your business is that one of your

customers is in trouble. If they go

down, your business could be the next in line.

So how do you know when one of your customers is having problems?

The first and most obvious one is that they have not paid

your latest invoices. This is a rather

drastic way to find out so look for these clues to their having financial



They pay later than usual.


They order more goods than normal.


They ask for extended credit terms or increased credit.


They ask for a change in the credit terms that

seem a little unusual.


They send an order outside of the credit terms.


They make a sudden surge in their advertising and/or

increase the pressure on their sales staff.


Their sales staff seem very stressed from being pressurised

into finding new customers or having too few staff available.


They make key staff redundant.


They change their trading hours – more means

they are chasing sales, less means they are cutting costs.


They restrict their product line.


They do not order goods from you in their less

popular ranges.


The hold a lot of sales.


Industry gossip indicates problems.


They become the takeover target of predatory companies.


Their accounts group becomes difficult to



They do not return phone calls.


Their support line is unusually busy with

complaints or quiet from lack of business.


Their cheques are returned unpaid.


There appears to be a lot of meetings of their

top staff.


A manager, more senior than you usually deal

with, asks for a meeting to discuss trading matters.

If you see one or more of the above then you need to

seriously review the credit that you extend this company. You should also consider meeting with one of

their senior managers to discuss matters.

It may be that you can assist them or barter some of their good for

assistance within your company.


Lee Lister is a Business Consultant with more than 25 year's consultancy experience for many household names. She is known as The Bid Manager or The Biz Guru.

From an early age she began an unparalleled journey through business consulting that continues to span across the UK, USA, Europe and Asia. She has consulted for a considerable number of companies all over the world. Specialising in business change management, start up consultancy and trouble shooting. Lee's experience in marketi...

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