Credit risk has increased dramatically in many industries because of the uncertain business environment in the new normal. Businesses in non-essential industries and those in heavily impacted services such as travel and hard-hit geographic areas, are struggling to conserve cash until the economy recovers. This makes it very difficult to assess credit risk and collect past due accounts receivable.
Under these circumstances you need to use every resource available to mitigate risk and successfully collect your accounts receivable. Customer relationships can be one of the resource you need in the new normal.
Here is how to mitigate credit risk by leveraging and establishing customer relationships.
Leverage Relationships
Established customer relationships can be used as an advantage for getting paid. Leveraging mutually beneficial relationships can help you get paid sooner when cash is tight and customers are stretching payables. If you have good customer relationships, especially ones where you have helped customers in the past, tactfully handled requests for preferential payment can move you up in the queue.
Establish Good Practices
Establish good practices for fostering new customer relationships to ensure payment.
- Customer service team – Use a customer service team approach at your company to make sure that customers receive prompt responses and solutions to their problems. Good customer relationships are a result of good customer service. If you make it easy for your customers to do business with you, they will value the relationship with your company.
- Be personable – Collection calls can sometimes be difficult, but they should always be personable. Be respectful and friendly to every customer. You will be able to build trust and solid customer relationships.
- Know your customer – Customers are people too. Take an interest in your customers and their lives. Getting to know your customers as individuals helps to build the personal relationships that are the foundation of customer relationships.
- Practice – Practice phone manners and tone on a regular basis. Ask someone to listen and critique, and record if you can. You may be surprised at how you sound and come across on the phone.
- Be empathetic – Show concern for your customers’ problems. Offer support and solutions as much as you can.
Leveraging customer relationships and establishing new customer relationships can help you mitigate credit risk and ensure payment. Developing customer relationships takes time and effort. Automated accounts receivable and collections can make it possible for your AR team to spend the time to develop customer relationships.
Customer relationships will be more important than ever in the new normal. The technology solutions you need to free up your AR team to spend more time with customers are available in cloud-based credit and collection platforms.
Lockstep Collect is a market leader in cloud-based credit and collection platforms. Lockstep Collect can help you with the technology you need to manage credit risk in the new normal.
If you would like to learn how you can benefit from credit and collection platforms, please contact Lockstep Collect at www.lockstep.io.
