Companies are urged to carry out more frequent assessments of high risk accounts, especially in the current crisis in the Middle East, Coface Head of Underwriting, Southeast Asia, Ms Marie Lim, has said.
At a Coface event, she said, “Check out their payment behaviour to see whether there are any anomalies.
“For example, if you have been trading with them for many years and they have been paying promptly, but suddenly ask for longer credit terms.”
Ms Lim added, “Macro environments, tensions in the Middle East, or even tariffs may be affecting the business, which is why they are asking for longer credit terms.
“I think it is best to understand customers better, which may help manage and track strategy.”
She said that companies could adopt some credit risk mitigation strategies to keep their premiums at a more affordable and sustainable level in the long run. These strategies include conducting more regular reviews of their customers, such as financial analysis.