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Thea Dudley

Dear Thea,

I am new to credit management in this industry. My previous credit experience was in another industry which was pretty cut and dry regarding credit granting. I am now dealing with a whole other level of customers, many who are considered “high risk.” They are either COD or half down with balance upon delivery. These customers take up an enormous amount of time and energy. Why do we agree to do business with them at all? When I have questioned my boss or our sales reps, I get a lengthy dissertation about the industry or an eye roll. What am I missing?

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— Risky Business in Highland Park


Dear Risky Business,

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If wishes were horses, beggars would ride. Same with credit and customers. If every customer came charging up to your company on a shiny white horse, fully armed with their even shinier credit report, where would the fun be in that?

I don’t know what industry you came from, but it sounds like the land of unicorns and rainbows. An industry where credit is cut and dry? Where every customer is solid? No COD, negotiation of how you are going to get paid— what did you do in all your spare time and why did you leave this proverbial credit promised land?

We do business with them because, for better or worse, without that slice of the business segment, some of us would not be as profitable, move as much product, or even keep our doors open.

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If you are dreaming of a portfolio full of clearly legible customer credit applications, complete with stellar credit reports, flawless financials, and 850+ credit scores, snap out of it. You are now in credit management in the building material space, complete with a side order of construction.

I think you are looking at this all wrong. Don’t misunderstand me, higher risk customers are more work. It takes way more effort to find solutions, alternatives, and ways to justify credit lines to sell those super marginal customers, but who doesn’t love a challenge?

Some of these customers are the nicest people, but they could not pay on time to save their lives. Some have the best of intentions, but nothing seems to go as they plan, and others are outraged and cannot believe that you won’t extend them credit. All still need product and can add to your bottom line. They are going to purchase somewhere, why not from you?

The art of the deal awaits you. Depending on your appetite for risk, your company’s flexibility, and your own creativity, you can find a way to say yes. It may not be the “yes” of your customer (or sales rep) dreams, but you can find ways to sell to them.

You’ve got: COD, half down, half on delivery, small, micromanaged credit lines, very limited terms, personal guarantee, cross corporate guarantee, joint check, preliminary lien notices on projects. Lots of options—not all appreciated, but options none the less.

Stop wishing for the credit pasture you left, saddle up for the rodeo that is your life now.


With more than 30 years of credit management experience in the LBM industry, Thea Dudley consults with companies on a wide range of credit and financial management issues. Contact Thea at

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