Client did not have a credit policy.
Extended credit to company with outstanding balance of $250,000.
Smith Schafer Approach
We assisted client in developing credit approval document and system of inquiry and reporting methods to limit credit extended for all new customers to specified dollar levels. For the problem customer we assisted our client in contacting this company and changed rates to reflect a premium and their terms to COD for all new work being performed.
Client performed approximately $1,000,000 in work for their customer on a COD basis at premium rates before that customer filed for bankruptcy. Our client received about $140,000 of the outstanding $250,000. Quick reaction kept the problem from being much worse.
Smith Schafer Services