Reg Walwyk, managing director, Purfect Binding Company
When we deal with a customer we don’t know, we will take a number of precautions before giving them an account. We will always ask around, talking to people like ICSM and, to start with, we will always have new clients on full or part-payment up front. You have to be cautious, ask yourself why this person is coming to you now, but you want new business so you can’t be too cautious. You can’t do an in-depth check, it just doesn’t make any sense to be looking at accounts from three years ago as it isn’t relevant. At the end of the day, you have to take a bit of a chance and keep your ear to the ground.

Rick Taylor, finance director, Howitt
Communication has never been so important, as that way you will hear the signs of danger quite quickly. Credit vetting should be happening on all new accounts, especially with a large order. Strong communication with your sales team will ensure you’ll be fully aware of any unusual activity with your clients, such as budget cuts or redundancies. Plan in advance and keep good contact with your clients account teams to find any problems before they happen. Ensure your credit controllers maintain a good rapport with clients’ account teams and have precise dates for payment. If danger signs should appear, you need to act quickly and decisively.

Mike Keating, managing director, Key2Group
The possibility of incurring a bad debt is not something new that has come about solely through the Credit Crunch. All businesses should be prepared for this type of situation anyway. Whereas there is no sure-fire way of 100% bullet-proofing yourself, we have very strong systems in place here which include a credit-checking system that we use for all potential new accounts to gauge whether they are credit-worthy and have sustainable finances before we supply them. New companies without much financial security in place can be a concern, but just because a company is a household name doesn’t necessarily mean it won’t be a potential risk either.

Nick Faint, managing director, Redlin Print
Redlin has a diverse range of customers across a number of differing sectors. In a recession, our client base provides us with comfort as the risk is spread. We protect ourselves from bad debt through a number of processes. We maintain close working relationships with all areas of our customers business, prevention is much better than cure. Our accounts team works to well established, tried and tested processes that are designed around providing our customers with a quality level of service, while not compromising the need for debt control. Our processes are slightly different when prospecting for new business with the level of risk being reviewed more regularly.