In this post we talk about accounts receivable in a recession with Brad Lohner, president and CEO of PCM Corp.
Brad has been in the credit and collections industry for the last four significant recessions. He has also helped companies in various industries, including construction, finance, food, media, distribution, retail, transportation, petroleum, and many more.
As the saying goes, an ounce of prevention is worth a pound of cure, and so it is with your accounts receivable in a recession. In this interview he talks about:
Protecting your receivables
Watching for warning signs
And what he is seeing in our current economic time
We divided this Brad Lohner interview into smaller, digestible “chunks” which you can watch below. Enjoy!
What is the feedback in the collection industry of what you’re seeing right now? Are things getting better or getting worse? What is true and actually happening?
Hospitality, supply, and media industries are impacted the most
Construction is doing quite well- now is the time to build
We talked earlier this year with credit industry expert Jay McKeown about businesses hitting a wall with the subsidy program ending in September. Can you speak on economic updates post-September?
The Canadian government elected to extend until July of next year
Use the time to get your expenses under control
Do you recommend creditors do customer reviews at this time? What to look for?
Get your A/R scored and find problem spots
Pandemic has created a short-staffed team and inventory cannot be penetrated quick enough
PCM provides outsourced accounts receivable -[dt_highlight color=”” text_color=”” bg_color=””] check it out here[/dt_highlight]
What are some examples of things you would consider red flags at this time?
Pull a credit report
How are they paying your essential suppliers? You become a “nice to pay” supplier
Other data sources- your sales team, departure of key people, a credit or industry association group
Advice for those who tighten their systems but then get their favourite or long time customers delaying?
Are they avoiding or dancing around your questions?
It’s your responsibility as a credit professional to mitigate that risk
Would you recommend incentivizing customers to pay early/ on time? Or is it more a matter of I shouldn’t have to incentivize you to pay your bills?
Are early pay discounts getting you what you need or are you giving money away?
Shrinking margins plus a high-needs customer may or may not be worth it
Thoughts on partial or full payment up front at this time?
C.O.D. (cash on delivery) can be a good way to establish a relationship with a new company with little to no credit data
You don’t walk into the bank and expect to get a loan without giving them any security
Brad Lohner is a 35-year veteran of the domestic and international credit and debt collection industry. He started PCM Corp on his own in 2005, which is headquartered in Edmonton AB (with a branch office in Ann Arbor, Michigan, USA). Brad is Past-President of his Rotary club and is acting in the capacity as Vice President of the International Association of Commercial Collectors (IACC) for 2019-2021. Brad has extensive experience and knowledge in the debt collection industry and is a ‘go-to’ resource for his colleagues. If you have any questions about credit, debt collections, or lien filing, please reach out to Brad directly.
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