In recent conversations, several credit managers have raised concerns about price increases and their effect on customers. We are hearing that despite increasing prices on multiple occasions, customers have been reluctant to raise their own prices for fear of losing business. The obvious fear is that these customers, now with lower gross margins, are now more susceptible to negative economic events, especially in their local economy. Here's the issues for your consideration:
If your company has been raising prices, what has been your customers' reactions?
Do you see rising prices as causing an increase in credit risk in your AR portfolio?
Do you see a coming round of inflation, and if so, what will be its effect on your company, customers, and marketplace?
Thanks for weighing in on this. We value your contributions.
If your company has been raising prices, what has been your customers' reactions?
Do you see rising prices as causing an increase in credit risk in your AR portfolio?
Do you see a coming round of inflation, and if so, what will be its effect on your company, customers, and marketplace?
Thanks for weighing in on this. We value your contributions.
Will this affect the A/R…Indubitably. We're drilling down on the customer base; sales/payment activity; payment history. We're getting some really large orders placed, but I'm making doubly sure that if the history doesn't provide a warm fuzzy for the payment to come in within terms, we're looking for deposits and, in some cases, prepay. My opinion, we need to prepare for what could be a very long 3 years.