The managing of high risk of delayed payment is the important cornerstone of successful business. The competitive advantage and company development can be provided by continues crediting of the established customers, and by granting credit for new, that may cause more risk to the company. Therefore it is important for the Company D in Baltics to collect the information about the customer using different channels, to judge the amount of credit in advance, to evaluate the time it can afford to let the credit be. In addition, the company need to recognize the worth of ensuring that the amount granted is actually paid on time, so the collection process are accurate and on place. The aim of the recommendations …show more content…
Several outside and inside factors are considered:
• Entrepreneurs in Baltics are gaining the confidence in customers in recent years, making it possible to pay with a longer payment terms after the delivery of goods or services;
• The company has a leader position in a market with stable customer basis, the customers focused approach in sale and collection is a part of the strategy of the company
• The turnover increase in Company D Baltic entities is determined by several significant contract sales every year; the aftermarket sales are stable with the trend to grow slowly; customers activity depends on industry and economic conditions in region
• The source of debt of the Company D is trade sales to external customers, every entity provide the sales within the …show more content…
The risk assessment should be structured and the sequences of activities defined so that both the back office staff and sales personnel can follow from the earliest point in the relationship with the customers.
3.1.1.1 Apply Credit Application Form for All Customers
Before the first order a new customer of Company D provides the general information of the company including the name of the company, legal status, contact person and contact information of the firm. The information is collected by sales representative and sent in general email as the request to open the customer account. The information requested form the customer should contain additional data and sent to the SSC in similar template. The advantages of the implementing the more advanced application form in Company D are: (1) the unified template for every new customers in Baltics, easy to administrate by accountant in SSC; (2) the customers master data contain the similar data about every customer regardless of its country of residence; (3) sales representative just need to follow the list of the data required; (4) the credit limit can be applied based on estimated purchases of the customer. Thus the application form would