Of course, you know when a customer comes under new ownership. Do you also know the risks for your company?
Speaking at the annual National Association of Credit Management Congress, attorney Lynnette Warman warned that new ownership of a customer is often a signal that the company is in trouble and could be having credit problems or make you the victim of slow pays. To be vigilant:
- Do your homework. Check corporate and business records to see if the new management has been involved in other businesses. Also check for tax liens and judgments.
- Use social media. Get updates on what the customer is doing via its posts.
- Get updated financial data. Maybe you already require customers to give you updates when there’s a major change in the company. That’s a good policy to follow when management/ownership changes, too.