Vetting New Customers: Don't Skimp on Background Checks

Extending credit to a new customer is a vote of confidence, but it's also a risk. One unpaid invoice can
wipe out the profit on a dozen good ones. The good news is that most credit losses are preventable. The bad news is that many businesses only discover a customer's payment history after the invoice goes past due.

Here’s how you can spot red flags before they become a problem:

Run a Background Check and Look for Red Flags

Beyond credit, a few quick searches can surface problems a credit report won't show:

• Search for lawsuits and judgments. Court records are public. A history of unpaid judgments tells you they've been through this before.
• Look at their online presence. A professional website and active business presence are good signs. A company that's hard to find or has no footprint may be harder to collect from.
• Watch for red flags in the relationship itself. Be wary of customers who push for unusually large credit limits, rush you to ship before paperwork is done, or resist signing a credit application. Pressure to bypass your process is a warning sign, not a sign of confidence.

Monitor After You Say Yes

Vetting isn't a one-time event. Customers change; new ownership, cash flow problems, or a downturn in their industry can turn a reliable payer into a slow one.

• Recheck credit periodically. Pull updated reports on your larger or older customers at least once a year.
• Watch payment patterns. A customer who starts paying at 45 days instead of 30 is telling you something. Address it early.
• Review credit limits regularly. Raise them for customers who earn it, and tighten them for those who don't.

Learn more in our latest article.

Get Help with Commercial Debt Collection

No matter how carefully you vet, some accounts will still go unpaid. That's a normal cost of doing business on credit. When it happens, the key is to act quickly and professionally.

We handle commercial debt collection from the first professional demand letter through litigation if necessary, so you can protect the relationship while still getting paid. You can place a claim securely through our online portal, upload your documents, and track progress in real time.

Get the money you deserve. Call us at 248-370-8160 or fill out a click here to fill out a contact form.

Vetting New Customers: Start with the Basics

Vetting a new customer before you extend credit isn't about being suspicious of everyone. It's about
knowing who you're doing business with, setting terms you can live with, and catching red flags early. 

Here's a practical checklist to help you get it right.

Before you talk about terms, confirm you're actually dealing with a real, operating company. Here’s what you should start with:

• Get their legal name and structure. Is it an LLC, corporation, partnership, or sole proprietorship? This matters for who signs the agreement and who you'd pursue if payment fails.
• Confirm they're registered and in good standing. Check your state's Secretary of State or business registry for the entity's status and registered agent.
• Check the people. Know who owns the business and who has authority to sign. A quick look at the company's leadership can tell you a lot about stability.

Next: Pull a Business Credit Report

A business credit report is the closest thing to a payment track record. Services like Dun & Bradstreet, Experian Business, and Equifax Business provide scores and payment history that show how the company has handled credit in the past.

What to look for:

• Payment history. Do they pay on time, late, or not at all? Patterns here are the strongest predictor of future behavior.
• Credit utilization. A company that's already stretched thin may not have room to pay you.
• Public records. Bankruptcies, judgments, and liens are major red flags.
• Trade references. Ask for references from other suppliers or vendors and actually call them. Ask how the customer pays, not just whether they pay.

Check the Owner's Personal Credit (for Small Businesses)

For small businesses and sole proprietors, the owner's personal credit is often the real story. Many small companies have thin business credit files, so the owner's personal history is a useful window into how they manage money. If you're extending meaningful credit to a small business, a personal credit check on the principal — with their permission — can be worth the effort.

Learn more in our latest article.

Get Help with Commercial Debt Collection

No matter how carefully you vet, some accounts will still go unpaid. That's a normal cost of doing business on credit. When it happens, the key is to act quickly and professionally.

We handle commercial debt collection from the first professional demand letter through litigation if necessary, so you can protect the relationship while still getting paid. You can place a claim securely through our online portal, upload your documents, and track progress in real time.

Get the money you deserve. Call us at 248-370-8160 or fill out a click here to fill out a contact form.

Common Mistakes in Credit Policies, Part 2

With over 50% of B2B invoices now paid late and write-offs persisting across industries, the difference
between a healthy receivables portfolio and a growing problem often comes down to the policies you have in place before an invoice ever goes out.

In our last blog, we shared two common mistakes we see in company credit policies. Here are two more to watch out for: 

Ignoring Red Flags in Payment Patterns

The mistake: Treating every late payment as an isolated incident. Slow pays, partial payments, and repeated excuses are often early warning signs of deeper trouble — but many companies don't flag them until it's too late.

The fix: Build triggers into your AR system. If an account goes 30 days past due twice in six months, escalate it for review. Train your team to spot patterns, not just individual events.

No Segmentation of Customer Risk

The mistake: Treating all customers the same. A startup with six months in business and a Fortune 500 subsidiary don't belong on the same terms, but many companies offer net-30 across the board.

The fix: Segment your customer base by risk level. High-risk accounts get shorter terms, smaller limits, and more frequent check-ins. Low-risk accounts can enjoy more favorable terms. Your credit policy should flex based on data, not instinct.

Learn more in our latest article.

Get Guidance from a Debt Collection Agency

Our B2B debt collection agency works with businesses of all sizes to design, audit, and implement credit policies that reduce risk and support growth. Whether you need a full policy overhaul or a targeted review of your current processes, we're here to help.

Contact us today to learn how we can help you turn your credit policy into something that works FOR you instead of AGAINST you.

Common Mistakes in Credit Policies, Part 1

Have your customers been paying invoices later and later?

When was the last time you reviewed your credit policy?

Bad debt doesn't appear out of nowhere. In most cases, it's the predictable result of a credit policy that has a few holes. Here are two mistakes we often see in a company’s credit policy:

No Formal Credit Application Process

The mistake: Extending credit based on a handshake, a referral, or a quick online search. Without a standardized application, you're flying blind on the customer's financial health, payment history, and legal standing.

The fix: Require a complete credit application from every new customer, including trade references, bank information, and a signed personal guarantee where appropriate. Make it a non-negotiable step before any goods or services are delivered on credit.

Failing to Review Credit Limits Regularly

The mistake: Setting a credit limit once and never revisiting it. A customer who was a solid risk two years ago may be struggling today, and your old limit could be exposing you to far more than you realize.

The fix: Schedule periodic credit reviews — quarterly for high-volume accounts, annually for everyone else. Tie limit adjustments to payment behavior, aging trends, and any new financial data you can gather. A living limit is a safe limit.

Learn more in our latest article.

Get Guidance from a Debt Collection Agency

Our B2B debt collection agency works with businesses of all sizes to design, audit, and implement credit policies that reduce risk and support growth. Whether you need a full policy overhaul or a targeted review of your current processes, we're here to help.

Contact us today to learn how we can help you turn your credit policy into something that works FOR you instead of AGAINST you.

When Settlement is the Smarter Play

In our last blog, we talked about when it’s best to pursue the full amount. In this blog, we’ll take a look
at when it’s best to pursue a settlement.

Settling can be the better business decision when:

• The debtor is struggling financially. If the business is on the verge of closing or has limited assets, a settlement may be the only way to recover anything at all.
• Time is money. Dragging out a collection effort for months (or years) eats into your team's bandwidth. A quick settlement frees you up to focus on revenue-generating work.
• Legal costs would eat into the recovery. If pursuing full payment means expensive litigation, a settlement can actually net you more in the end.
• You want to preserve a business relationship. In some cases, a mutually agreeable settlement keeps the door open for future work once the debtor's situation improves.

Learn more in our latest article.

Learn Your Options with a Collection Agency

There's no universal right answer. The best choice depends on the specific facts of each account, your cash flow needs, and your tolerance for time and risk. What matters is having a clear process for evaluating your options, and a collection agency who can guide you through them.

Ready to talk through a specific account? Contact us today for a no-obligation consultation.

When Full Payment Makes Sense

When a commercial account goes unpaid, business owners face a tough question: Should you hold out
for the full amount owed, or accept a settlement and move on? There's no one-size-fits-all answer — but understanding the trade-offs can help you make the right call for your bottom line.

Pursuing the full amount is usually the right move when:

• The debtor has clear assets or steady cash flow. If the business is still operating and has the means to pay, there's no reason to discount what you're owed.
• The amount is substantial. For larger balances, the cost of pursuing full payment (legal fees, staff time) is often worth the effort.
• You have a signed contract with clear terms. Strong documentation gives you leverage and a clearer path to full recovery.
• The debtor is responsive. If they're communicating and showing good faith, working toward full payment is reasonable.

Learn more in our latest article.

Learn Your Options with a Collection Agency

There's no universal right answer. The best choice depends on the specific facts of each account, your cash flow needs, and your tolerance for time and risk. What matters is having a clear process for evaluating your options, and a collection agency who can guide you through them.

Ready to talk through a specific account? Contact us today for a no-obligation consultation.

Commercial Collections Focus on Negotiations

Many commercial debts stem from cash flow challenges, accounting problems, ownership transitions,
or disputes over products or services. Collection efforts often involve negotiation, investigation, and structured settlements rather than simply demanding payment.

The Stakes Are Often Higher

A single unpaid invoice can involve thousands or hundreds of thousands of dollars. Accounts receivable are often a company's most important asset, and delayed payments affect payroll, purchasing, growth plans, and financial stability. That's why many businesses involve a collection agency before an account becomes uncollectible.

Commercial Debt Collection May Lead to Litigation

Commercial agencies often work with attorneys specializing in creditors' rights. When a debtor refuses to cooperate despite clear documentation, litigation may become necessary. The possibility of legal enforcement also provides leverage that encourages resolution beforehand. RSD's process extends from initial collection through litigation when warranted.

Learn more in our latest article.

Get Experienced Debt Collection Services

Commercial debt collection requires a different skill set than consumer collection—a deeper understanding of business relationships and complex contractual issues.

We've spent decades helping businesses recover outstanding receivables through professional, ethical strategies. Whether you're dealing with a single unpaid invoice or an entire portfolio, our team can turn past-due receivables into recovered revenue.

Contact RSD today to learn how our debt collection services can strengthen your cash flow and protect your bottom line.