How to improve the payment morality of customers

We are a big multinational company producing electronic equipment. We sell our products to companies in the Czech Republic and have approx. 40 customers.

We used to have payment problems with almost half of our customers. They paid more than 60 days after maturity date, in some cases we even dealt with claims more than 180 days after due date. Bad quality of receivables negatively influenced our cash flow and that was what our foreign managers noticed.

 

One of our partners recommended us to start  cooperation with CSOB Factoring to improve our situation. The factoring company first set financing limits for each customer. CSOB Factoring has long-term experience and so their limits also serve as recommendations for us - we know what amount of business credit to provide to particular business partners.

 

Soon after starting the cooperation we found out that payment morality of majority of our customers improved significantly. The factoring company provided us the access to on-line system FactorLink for a symbolic fee and now we can see all information about improvements in payment morality of our customers directly on our computers. The cooperation with CSOB Factoring brought two effects: the time structure of our receivables improved and we are no financially independent on our parent company.

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