You ran the credit check when they were a small customer

Credit is assessed at onboarding, when the exposure is trivial, and then the account grows for three years while the assessment stays exactly where it was.

By Steve 4 min read
Abstract bridge artwork for You ran the credit check when they were a small customer

Most businesses that extend trade credit do the assessment once. A new customer arrives, someone runs a check, a limit gets set, often generously, because the first order is small and the relationship is worth having. Three years later that customer is ordering ten times as much, on the same terms, against a limit nobody has looked at since. The credit decision was made about a company that no longer exists, in a relationship that no longer resembles the one assessed. This is not a failure of diligence. It’s a…

Keep reading for free

Create an account to read the rest.

The whole library is free. No card, no subscription, no trial that quietly ends. An account simply lets us know who we are writing for, and opens every article from here on.

  • Every article, in full, at no cost
  • New articles published every weekday
  • Takes about twenty seconds
Create a free account I already have one

Free means free. We will not charge you for the library, and you can read as much of it as you like.

Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

More on Operations

Scroll to Top