Ever thought about capping the amount you’re happy to let a client owe you before enough is enough? Setting credit limits for your customers can be a great way of minimising your exposure to poor payers and lower your risk to non-payers. However, it may also restrict a growing client from trying to spend more with you. So where do you set the limit?
Each customer will have different requirements – as well as different reputations or financial scores. There is no exact science to this, and sometimes you will need to go with your gut and assess your own risk appetite. Internally, you should also review the total debt you’re owed and analyse it by client. You may decide that you do not want any one client owing you more than x% of the total debt – if they went bust that could be a significant write off dependant on the overall value.
An ideal start would be to review the client on a credit scoring platform (such as company check or creditsafe). Soon, app integrators to platforms such as Xero, like Futrli, will be adding this to their system but there’s no word on what that may be.
Based in London, we’re happy to arrange for meetings using the facilities at our offices set just by Bank Station. We’re equally happy to come to you too if required.
Looking for other locations? We’re also experienced internationally, so you just need to let us know what you’re looking for.