What The Top 10% of Directors Do

If you are extending credit to your clients, or about to, this one is for you.

Monday I shared that the moment you extend credit to a client, you become their bank. Yesterday I shared that the client most likely to hurt you is probably the one you trust most. Today I want to give you the simplest possible thing you can do about it. Not the full solution. Just the floor. The absolute minimum that every business extending credit should have in place.

Put every client on credit monitoring.

But here is the part most people miss. There is absolutely no point having credit monitoring if nobody is actually monitoring it. And most companies do not.

Here is what the top 10% of businesses do at an absolute minimum. Whoever sends out your invoices, every single month they pull the updated credit history for every client you are owed money by and put it on the sheet. You can see at a glance whether things are moving in the right direction or not. And on your weekly aged debt report, next to every client who has gone past 60 days, you want to see their last six months of credit history sitting right there alongside it.

That is it. Simple. Cheap. Almost nobody does it.

Because here is what happens when you do not. A good client gets hit by a bad debt. They start to struggle. They do not go down alone. They drag their suppliers with them. You did the work. You raised the invoice. And now you are part of the domino effect through no fault of your own.

The warning signs are nearly always there. The top 10% of directors see them. Because they built a simple system to look.

If you want to know how to set this up, call me 07710466166 or drop me an email. No charge. Five minutes. I will point you in the right direction.

I am Mark Smillie. Have a great Wednesday.