Mistakes can be expensive –
particularly if you do not learn from them. Mistakes that are repeated can
create a massive hole in your wallet.
When a company has a bad debt write
off, it may be within the company’s best interest to evaluate and examine
whether or not the credit risk was properly handled and monitored. Also, it is
important to determine whether or not the account was managed correctly when
there was reason to believe the customer was financially compromised. These may
be some important questions to ask:
- Who was involved in making the credit decision?
- Was everything properly documented?
- When was the last time the credit file was updated?
- What occurred to indicate that the debtor was
financially compromised, and what was done about it during that time?
- What was done to collect the balance owed?
- How long did it take for management to be informed of
the issue?
- Were appropriate measures taken to prevent the problem
initially, and to mitigate damage done to the creditor company once the
problem came to light?
An objective review of the credit
situation is imperative, and should be examined with the whole credit team. The
reason behind this is not to embarrass any member in the team, but to encourage
growth. This will in turn (in theory) reduce the chances of the company losing
money because of a similar problem sometime down the road.
Marcadis Singer, PA
Florida Collection Attorney
5104 South Westshore Blvd.
Tampa, Florida 33611
info @ marcadislaw.com
(888) 547-1881
(813) 288-1881
New Clients
Ext. 247 Gil Singer
Ext. 240 Ralph Marcadis
Existing Client Client Liaison
Ext. 242
To Pay a Claim
Ext. 245
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