The MAPI foundation report U.S. manufacturing will grow slightly faster than the general economy in 2015 and 2016. While industry growth forecasts are always good news for manufacturers, it does not always translate to success for individual businesses. To take advantage of the growth in your industry, you need to have a growth strategy and all growth strategies need one thing, cash flow.
The trouble is that cash is not as easily accessible as it has been in the past, according to the United States Census which that found capital spending on equipment needed for growth is already growing faster than sales. For manufacturers that means freeing the cash stuck in accounts receivable and putting it to good use is more important now than ever for manufacturers who want to take full advantage of the forecasted manufacturing boom.
Manufacturing companies are well known for having a hard time getting paid within terms, and a recent Atradius Payment Practices Barometer explains that this may be cause a large majority of companies are not following proven accounts receivable and business credit management best practices that could make getting paid on time much less of a hassle. For example:
- Only 18.27% of manufacturing companies send payment reminder letters to their customers.
- Only 47.72% of manufacturers check customer credit worthiness
- Only 51.27% of manufacturing companies monitor credit risk
Many times manufacturers neglect to take these steps because it can be a time consuming and overwhelming amount of work when you rely on traditional tools and strategies; but it’s crucial to start better protecting yourself against extending credit to risky customers, writing off bad-debt, and opening your company up to financial instability.
While you may be aware of traditional business credit management strategies, the white paper below will teach you the basics of credit risk management and how you can make better, faster decisions about extending credit to customers with modern tactics and tools you may not yet be aware of.