{"id":3754,"date":"2019-11-15T11:50:25","date_gmt":"2019-11-15T11:50:25","guid":{"rendered":"https:\/\/www.tofler.in\/blog\/?p=3754"},"modified":"2020-04-10T11:11:27","modified_gmt":"2020-04-10T11:11:27","slug":"2-important-checks-to-carry-on-your-customers-every-year-to-prevent-bad-debts","status":"publish","type":"post","link":"https:\/\/www.tofler.in\/blog\/2-important-checks-to-carry-on-your-customers-every-year-to-prevent-bad-debts\/","title":{"rendered":"2 important checks to carry on your customers every year to prevent bad debts"},"content":{"rendered":"

We all are vaguely aware of the concept of vendor assessment. However, customer assessment\u00a0is a lesser-known concept. Because who cares to know more about a customer? He is business and one never lets go\u00a0of the business,\u00a0right? However, bad debts and default on payments are common problems. In this article, we talk about two essential things that you should check about your customer, every year,\u00a0to re-evaluate your relationship with them. Ofcourse, you would know a lot just by working with them and through references.\u00a0But would you be able to tell in time when things start moving downwards?<\/p>\n

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  1. Financial growth and margins:<\/strong>\u00a0Always check growth\/decline in operating revenues<\/a> of your customers in the last financial year. Then, compare it with other similar companies in the industry. Are the revenues declining?\u00a0Is it a company-specific decline or is the whole industry facing a difficult time? Also, look at gross margins and net profit margins<\/a>. Are they narrowing for the company or the industry? Looking at these things would at least warn you of any difficult times ahead\u00a0and prepare accordingly.<\/li>\n
  2. Days payable outstanding ratio:\u00a0<\/strong>This is an important indicator but\u00a0few people take note of this ratio. It\u00a0indicates the average number of days a company takes to make payments to its vendors. If your client has\u00a0days payable outstanding of 45 days, then that\u2019s the average time in which to expect the payment from him. You should check this ratio every year. If it is increasing, then that\u2019s a sign of warning. When trouble starts, the first thing that gets affected is the days payable outstanding ratio.<\/li>\n<\/ol>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    We all are vaguely aware of the concept of vendor assessment. However, customer assessment\u00a0is a lesser-known concept. Because who cares to know more about a customer? He is business and one never lets go\u00a0of the business,\u00a0right? However, bad debts and default on payments are common problems. In this article, we talk about two essential things […]<\/p>\n","protected":false},"author":3,"featured_media":1590,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,217],"tags":[65,206,205],"class_list":["post-3754","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-indian-companies-best-practices","category-newsletter","tag-financial-analysis","tag-monitor-companies","tag-sales-prep"],"_links":{"self":[{"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/posts\/3754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/comments?post=3754"}],"version-history":[{"count":6,"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/posts\/3754\/revisions"}],"predecessor-version":[{"id":3777,"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/posts\/3754\/revisions\/3777"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/media\/1590"}],"wp:attachment":[{"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/media?parent=3754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/categories?post=3754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tofler.in\/blog\/wp-json\/wp\/v2\/tags?post=3754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}