Understanding the worth of Boots on the bottom: Conducting asset and legal responsibility investigations on defaulting and delinquent prospects

Understanding the psychology of delinquent customers/debtors tends to be overlooked when it comes to delinquent customers who end up in litigation or collections. Many lenders could and should have used a local presence to address these issues rather than simply relying on standard collections and legal tactics.

How people feel about and deal with their debt internally and how they resolve their obligations are two different factors to consider. Almost 90% of people have the best of intentions and will not enter into a business to take advantage of others. However, there are those who are determined to burn your business down, asset and liability investigations are one of the most overlooked ways to quickly tell the difference between these clients. Finding out if your client has non-exempt assets for their business or individually is a big part of determining their viability. Finding hidden assets like real estate, equipment, bank accounts and other businesses is crucial. This is a situation where it is vitally important that a licensed and engaged private investigator conduct a site visit to establish personal contact with an overdue client.

Understanding the importance of knowing exactly how your customers’ business is performing the moment they default on their payments can mean the difference between your business recovering its assets or ultimately writing the customer off as uncollectible . Asset & Liability investigations are also among the most effective ways to deal with non-paying and delinquent customers. It starts with recognizing these issues as early as possible, this allows you to be optimally positioned as a secured or unsecured creditor. Far too often companies chase overdue invoices longer than they should and miss the boat entirely. Having a reliable provider in this space can make all the difference for your organization’s DSO. Creating leverage on top of your UCC will ensure your business drastically reduces its risk. With the ever-changing technology landscape in the skip tracing industry; Aspects such as biometrics, International ID – Verification along with facial recognition, you need a partner who can act on your behalf immediately.

The most open-minded and innovative companies tend to understand the value of implementing such services into their processes. They understand that a client’s financial capabilities can change overnight and being able to have someone on their doorstep within a matter of days or hours is critical.

When should such investigations be carried out?

As early as possible. Creditors can initiate this process as soon as the customer defaults for the first or second time, or as early as when assessing a company’s credit risk

What should a creditor expect from an Asset & Liability Investigation?

Determining if your customer has more serious issues than they’re telling you can help ensure your business is making the most informed decision. For example: “As a financial controller, credit manager, or financing manager, you often won’t contact your client and have them tell you why they’re not paying you, ‘because they have a new lawsuit, federal or state tax lien.’ You usually will Don’t say what bad problems they are having or facing. Knowing all the facts will help you move forward in the most informed way possible. The most successful companies are those that use strategy best, and strategy is based on the most complex knowledge of your peers .

Are there other situations where these services are helpful?

You can also get these types of reports to determine someone’s creditworthiness. You may only be able to say “yes” to open the line of credit or fund this device. Once again “knowledge is power”. Each time you can better understand the people you do business with, prepare yourself for a more seamless and productive relationship.

How can a service like this make the difference in your business and help reduce your DSO?

Every single partnership is different and not all relationships should be valued equally. It’s crucial to understand that when companies work together, they build relationships that they hope will last long-term. Knowing that every time a connection is made, not only is your own company name and brand involved, but all the other relationships everyone has built. The next step is to determine how each company can proceed and strategically gather the information needed to assist in mediation and collection on behalf of a creditor. Deepening your company’s networks for locating assets and liabilities will only give your company a stronger competitive advantage. Private detectives are an invaluable resource. Finally, you need a company with a strong understanding of liens and litigation. These things can be done easily and efficiently if you can find a company that can handle each of these areas simultaneously.

Curtis Fort is currently Group CEO of Construction Credit & Finance Group and has worked to help companies cut losses for nearly 20 years. Feel free to contact him at 239-331-5385 or at cfort@ccfgcredit.com