Bankruptcy is a word that strikes fear through the hearts of any business that supplies other firms. But a customer in bankruptcy may not be the worst thing that could happen. You can still do profitable business with a company in bankruptcy as long as you take the time to act carefully.
Monitor the customer to make sure he does not go over any credit limit you have set if you gave credit. Make sure that he does not take any discounts you may give other customers if he pays by cash or check.
Set sales terms for a customer in bankruptcy to make sure you will collect money after the sale. If the customer cost you bad debt when he went bankrupt, only agree to sell to him on a cash basis or with greatly reduced terms. For example, use "net 15" instead of "net 30," meaning he has to pay you in 15 days after invoicing or delivery of goods or services instead of 30 days, the usual credit terms.
Increase your credit limit or increase your sales if the company in bankruptcy is doing better for two reasons: first, the company will make you more money, and second, the increased good will could result in a good relationship if the customer can come back from the financial trouble.
Review your accounts receivable to make sure your customer facing bankruptcy has not cost you a lot of money. Sometimes you are lucky and a customer goes bankrupt in between buying things from your firm. If a customer goes bankrupt but doesn't owe you anything when they do, it is safe to sell to them while the firm is in bankruptcy as it is required to pay any new suppliers it takes on after filing for bankruptcy.
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