As both people and businesses begin to feel the economic impacts of the Coronavirus, Tobias Baer provides clear steps that can help your business deal with delinquent accounts.
Many of my clients so far have experienced less delinquencies on consumer debt than I had feared. Unfortunately I don’t think that I can claim that this is only because I’ve helped them draw up extraordinarily effective credit policies and scoring systems – instead, this time around delinquencies themselves might be delayed, and lower balances today may be the receding water levels we observe before a tsunami. A welcome side-effect of lockdown measures across the world was that many consumers had a lot less opportunity to spend – discretionary spending has nose-dived by 30-60% in many markets and card portfolios. And those who were robbed of their income sources by Covid-19 often had some buffers (cash and credit lines) that they could draw upon.
Advice included in this article:
- How to segment delinquent accounts
- Build an economic model
- Reassign accounts to dedicated team
Read the full article, Three Tools You Need to Stem the coming Tsunami of Bad Debt, on LinkedIn.