Problems in your client's geographical area can be a sign of potential credit problems!
Focusing on trends in specific geographic areas can save your business an abundant amount of both time and money.
Say you have several clients in a region that is losing large amounts of their population due to failing industries. It may be time to rethink doing business there. This is often a sign that customers are going to become delinquent on their debts in the near future.
There will also be times when a geographical area is only facing temporary issues. These may include off-seasons, disasters or miscommunication. If the problem is temporary, it is crucial to communicate with your client or customer to discuss how to proceed and when payment can be expected. Off-seasons may result in lack of funds to repay debts owed when they are due.
Consider changing business terms only to work with that client when they are in season, ensuring they will be able to pay you on time.
Disasters such as floods, fires or tornadoes don't typically require termination in doing business with clients. However, the client may need extended payment terms. As always, keep in mind, most people want to pay their bills.
To make collecting past due debts as smooth as possible, early intervention is key. The likelihood of collecting decreases as time passes. When you can't collect what people owe you, business becomes much more complicated. Keep an eye out for trends in specific geographical regions to avoid unnecessary problems.