At the beginning of 2020, everyone expected a promising year to finally recover the damage from the last financial crises that the national market faced. But just as our economy was showing signs of recovery, we are haunted by a new crisis stemming from COVID-19.

With just over a month of closed trade, many companies are already feeling the negative consequences imposed by the disease that are reflected in a drop in billing, employee cuts and default. And we are only at the beginning of the crisis!


Even if the quarantine ended today, the damage is already done and the reflexes of this crisis will still last for a long time, all over the world. And in the face of this emergency situation, companies need to take even greater care to avoid customer default.

Therefore, we have separated some tips with preventive actions to help your company avoid major financial losses:

1 – Never fail to evaluate customer history

Selling is a crucial need for any company, even more so in the urgency of the moment we are currently going through. However, even though it may be an essential practice, forward selling has its risks, and you should be careful with them.

Before closing any agreement, carry out an analysis of your customer's credit to have a full idea of ​​how their situation is with credit protection entities. And this is not restricted to new customers, even old buyers of your company, with the status of good payers, can become delinquent in the current scenario.

There are several services that can help you identify a client's financial health, such as queries for pending payments, protests and partner participation in other businesses. And best of all, you can make these queries online.

There is also the possibility of carrying out consultations with business associations, which allow the request of commercial and bank references. Another important tip is to get to know the client's business and study how the area has been affected by the COVID-19 crisis, in this way you will minimize business risks.

2 – Invest in software to manage customer data control

Knowing how to differentiate between good and bad payers is essential for the health of your business. So, if your company still doesn't have a financial management system, it's good to review your concepts, and soon.

A financial management system is software that provides data to help you keep track of various processes in your company, such as payment history. This data helps to identify customers who have always honored agreements (or delayed, on a timely basis) from those in default that cause a real headache in your finance department.

There are software on the market that offer complete data about their customers that allow the company to define the best collection or negotiation strategy.

3 - Create billing and renegotiation systems

If your defaulting customer is a company, you can be sure that they have other outstanding debts in addition to yours. The big problem with defaulting companies is that outstanding debts tend to increase very quickly, due to interest and fines.

Even if you don't have anything that can actually avoid this situation, there is a way to minimize the damage to your business. It is enough to implement a billing system that is practical and effective.

Ideally, you should alert the debtor at the first delay because, even if the collection may seem uncomfortable for some, the customer may have stopped paying due to mere forgetfulness. However, if the default is for another reason, be sure to make it clear, and in a friendly manner, the actions your company will take if payment is not made.

As we live in an atypical situation, negotiate to try to receive at least part of the value through renegotiations of the amount to be taken. Depending on the case, offer the extension of the debt with the customer, under conditions that are favorable to your company.

However, if the default persists , take legal action to guarantee your rights. Bad debt is the main contributing factor to crises in our economy and you cannot postpone the resolution of this situation, as it can compromise the functioning of your company.

4 – Credit insurance is the best protection your company can have in times of crisis

The big problem with going to court to solve the problem of a delinquent customer is the long time they take to be solved. In addition to all the discomfort that these procedures can generate, in some cases the customer can even go into judicial recovery and postpone even more the receipt of values ​​by your company.

Therefore, Credit Insurance is the definitive solution to protect your company's cash flow in times of crisis, so that, with it, the insurance companies will take years to receive the values.

The benefits of Credit Insurance are basically countless and they can be adapted to each type of company, combining the necessary protections that can be better targeted including ensuring profits and even increasing sales.

Interested in learning more about this powerful tool in times of crisis? So make a quote , chat right now with one of our experts.


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