One of the mistakes made by Japanese companies in international transactions is that they do not “investigate customers”.
Of course, it does not mean that we do not investigate all the customers. In particular, one should survey a non-listed unknown company with whom you haven’t had transactions before. However, the situations differ with the entry of an “introducer”.
Often we trust partner and end up giving credit owing to an introduction by influential customers or local politicians or a heavy influencer.
In addition, surprisingly, there are many introductions of managers and directors. Under internal credit management rules, even for customers that are not eligible for credit, it is often the case that it is treated specially by the president's voice of authority such as “This company can be trusted because it is credible”. As a result, the transaction is started without conducting sufficient investigations and examinations, resulting in problems such as delayed payment.
Having an introduction and doing research is a story of different dimensions. Customers should be investigated according to regulations, regardless of introductions.
In addition, there are companies that have investigated at the time of new credit and never conducted regular investigations. It is important to rank and rate according to the customer's creditworthiness and change the frequency of the periodic investigation accordingly.
However, no matter how powerful a company is, it does not mean that it is not necessary to investigate for 5 or 10 years. In particular, overseas companies have a side where information is difficult to obtain, so even major companies should conduct regular surveys every two to three years.
It is the same as the human body, an unexpected illness may be discovered at a regular medical check-up. Such steady activities will lead to the early detection of business failures of customers.