Most customer relationships are built on trust and mutual understanding. By monitoring your customers’ financial health, you can address their financial challenges and offer support. By providing guidance when needed, you strengthen the bond between your business and your customers. This fosters loyalty and encourages long-term partnerships, ultimately benefiting both parties.
Requesting and reviewing customers’ financial statements, such as balance sheets, income statements, and cash flow statements, is a fundamental method for assessing their financial health. These documents offer a snapshot of the customer’s financial position, profitability, and liquidity.
Understanding the key financial ratios, trends, and comparing them to industry benchmarks can provide insights into their overall financial stability.
Interpreting financial data accurately requires expertise in financial analysis and an understanding of relevant industry benchmarks. Extracting meaningful insights from complex financial statements and ratios can be challenging for businesses lacking financial expertise. Investing in skilled financial professionals or partnering with external consultants can help navigate this complexity and ensure meaningful and accurate analysis.
Are you able to monitor all of your customers all of the time?
Clearly, the larger the customer, the greater the impact to your business of an unforeseen bad debt. Why not gain a health check on your three largest customers? We’ll provide an overview of the credit risk attaching to your 3 biggest customers based on the view of a panel of our insurance partner underwriters. This will deliver valuable insights into credit risk, allowing you to make informed decisions about the level of credit offered to your top customers.
If you would like some help with this issue, then click on the link here and we will assess the risk of your three biggest customer exposures. This will deliver valuable insights into credit risk, allowing you to make informed decisions about the level of credit offered to your top customers.