It’s generally understood that a community is more powerful than one person. “We’re working together—that’s the secret,” Sam Walton often said. In the world of credit, this is also true; no single internal metric tells us everything we need to know.
Looking back at your past credit decisions—have you ever placed a “hold” on a customer or extended or granted a greater credit limit when you weren’t sure it was the best decision? What drove that decision? When you ask a credit professional this question, the most frequent response is—“My data supported the decision.”
This, of course, is a logical response, but was it the right call? Does your data alone tell you enough to make tough decisions? This article is not about strategy, but answer two very important questions: What action do you take when your customers are not meeting your terms? and What steps do you take to approve a new account or a greater limit?
Your accounts receivable (A/R) may be your company’s single most important asset and as a credit manager or financial officer, you’re there to protect it. We credit professionals may not make the sale, but our informed credit decisions and actions support company growth and bottom line results. The operative word here is “informed.”
As information technology has advanced and become more interconnected, accessing and sharing information has never been easier. Companies need not make decisions in a vacuum. Data suggests those who do business without proper risk management tools tend to be less profitable and cash poor. Without corrective measures, over time, under-informed credit decisions will prove costly.
When you have an uneasy feeling about an account, what should you do? A decisive credit professional will access and analyze the company’s A/R aging data and perhaps even crosscheck it with other known and trusted industry professionals. But for an informed decision, members can refer to Blue Book Services for a comprehensive overview of the account in question. Sometimes gut feelings turn out to be nothing, but as credit or finance managers, we have to do the homework and follow the old adage, “better safe than sorry.”
SHARING A/R FILES As technology has allowed produce buyers and sellers to share trade experiences for over a century with relative ease, today it’s become even simpler. Not possible you say? Well, yes, it is…and there are greater advantages.
It’s generally understood that a community is more powerful than one person. “We’re working together—that’s the secret,” Sam Walton often said. In the world of credit, this is also true; no single internal metric tells us everything we need to know.
Looking back at your past credit decisions—have you ever placed a “hold” on a customer or extended or granted a greater credit limit when you weren’t sure it was the best decision? What drove that decision? When you ask a credit professional this question, the most frequent response is—“My data supported the decision.”
This, of course, is a logical response, but was it the right call? Does your data alone tell you enough to make tough decisions? This article is not about strategy, but answer two very important questions: What action do you take when your customers are not meeting your terms? and What steps do you take to approve a new account or a greater limit?
Your accounts receivable (A/R) may be your company’s single most important asset and as a credit manager or financial officer, you’re there to protect it. We credit professionals may not make the sale, but our informed credit decisions and actions support company growth and bottom line results. The operative word here is “informed.”
As information technology has advanced and become more interconnected, accessing and sharing information has never been easier. Companies need not make decisions in a vacuum. Data suggests those who do business without proper risk management tools tend to be less profitable and cash poor. Without corrective measures, over time, under-informed credit decisions will prove costly.
When you have an uneasy feeling about an account, what should you do? A decisive credit professional will access and analyze the company’s A/R aging data and perhaps even crosscheck it with other known and trusted industry professionals. But for an informed decision, members can refer to Blue Book Services for a comprehensive overview of the account in question. Sometimes gut feelings turn out to be nothing, but as credit or finance managers, we have to do the homework and follow the old adage, “better safe than sorry.”
SHARING A/R FILES As technology has allowed produce buyers and sellers to share trade experiences for over a century with relative ease, today it’s become even simpler. Not possible you say? Well, yes, it is…and there are greater advantages.
For the past decade, Blue Book Services has been in receipt of accounts receivable data from companies within every major shipping district in the United States, Canada, and abroad. Aging data reflects current risk and pay performance trends on industry buyers and has played a pivotal role in our rating processes. Other industries have been sharing A/R data back to the days of old green-and-white hand-delivered hard copy data files. The produce industry can benefit as well.
Why should you provide your A/R data to Blue Book Services? Our two-part answer to this fair question is quite simple: (1) it benefits the industry, in particular, other contributors; and (2) more importantly, it benefits you.
YOU FIRST Providing your A/R information gives you access to the far-reaching, comprehensive data pool that Blue Book Services has been compiling for years. At any time, a member contributor can access A/R aging data within Blue Book Online Services under the “A/R Reports” tab of a company record.
This is a powerful risk management tool that allows you to properly analyze your customers’ credit and pay performance.
BROADER BENEFITS Customer Growth Sharing your A/R data builds your customers’ credit profiles. Sure, we all want to know who is becoming a greater trade risk, but your well-paying customers will benefit from your contribution as well. These stable, consistent customers deserve your recognition, and providing information on their pay can enable greater buying opportunities, allowing these partner companies to grow. Your customers’ growth can be a tremendous opportunity for your company’s growth as well.
Simplicity & Ease of Use Sending your A/R data files electronically reduces the amount of time spent sharing data other ways and frees up more time to devote to your company’s other needs and expectations. As long as your file is in an Excel or CSV format, we can make it work.
Increase Your Leverage Remember, your trade experiences are shared in the strictest confidence. They always have been, and this will always be the case. And although this is true, you have the opportunity to let your customers know that you share this information with Blue Book Services, either through credit applications or as part of your invoicing.
Customers who know you’re providing this information may be more likely to pay as promptly as possible, to ensure they receive the very best report possible. When your customers know you share your A/R data with Blue Book, they’ll know your file includes all prompt and slow paying customers, and you’re not not reporting any ‘past due’ accounts.
Best in Class Standards And this brings us back to the top of the article: when companies share intelligence, the entire industry benefits through more informed decision making. When you provide accounts receivable data, you become part of an exclusive community: a community that benefits from its members’ shared knowledge. By sharing and gaining access to additional data, your credit department will be supporting company growth and bottom line results.
Stay ahead of the curve and don’t get caught in the vacuum. Contact a Blue Book Services rating analyst today to express your interest in submitting your accounts receivable data files. Be on the positive side of the “what goes around comes around” business equation.
