How businesses avoid credit frauds

HOW TO PREVENT CREDIT FRAUDCredit frauds can impact a business adversely in various manners. Such manners can include lower cash flow liquidity, supply management shocks and low availability of capital for investments. There are many simple steps businesses can take to protect their business from fraudulent practices. Such steps can ensure more transparency, help build better relations with customers and gain early payments. Some of these steps include notifying customers, resolving claims quickly, purchasing customer insurance or in extreme cases, handing over invoices to debt collectors. The following is a list of all such solutions.

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CREDIT LIMITBusinesses can review customer history individually to set appropriate credit limits. Some customers may have had a troublesome past with the business. Such customers can be treated with more care and extra

insurance can be purchased to protect business from such customers. Similarly, low credit could be assigned to new customers until they can instill a certain level of confidence.

TERMS AND CONDITIONSBusinesses should draw out clear terms and conditions for their customers. Customers can be notified about these terms and conditions in a formal letter or through various convenient online channels. It is

important for customers to understand the duration, amount of credit and the legal consequences.

CUSTOMER RELATIONSHIPSIt would not be unreasonable to assume that every business can have a low point at some point of time. In order to understand suppliers and customers and their situation thoroughly, it is for businesses to have good relationships with their customers. Such relationship can avoid unnecessary legal hassles and also

extend a helping hand to build a long term relationship.

http://www.coface.se/Vaart-erbjudande/Kreditfoersaekring/Single-Risk