Credit officials say payment delays rising
Keeping sales up and trying to collect credit is the dilemma of today's corporate credit manager. It may be a losing battle, according to an early-July survey of members of the National Association of Credit Management.
The number of association members reporting falling sales rose over 25 percent, while 10 percent reported increasing problems with slow-paying customers.
Already beset by customers who delay payment of invoices rather than borrow at high bank interest rates, members report another hazard emerging in today's credit climate. The members see a growing number of companies, particularly smaller ones , seeking haven in the provisions of the debtor-oriented Bankruptcy Code of 1978.
The collectors of the nation's corporate bills report dealing with these problems through prompt and aggressive follow-up with past-due accounts. Others are holding up shipment of new orders, or putting customers on COD, to force prompt payment. Also mentioned was increased use of interest charges on past-due accounts, requiring more detailed and frequent financial data from customers, and more customer counseling.