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Extension of Credit
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What does it mean?
- It allows our clients to purchase our services while offering flexibility on payment terms.
- Providing credit is not free to Employbridge.
- Longer credit terms means more cost to Employbridge.
- Larger credit amounts means more cost to Employbridge.
What is our potential exposure?
- We are at risk that after providing the services and paying our workers, our client does not pay us.
- Credit needs to be carefully monitored during a business relationship.
How does it hurt you and your branch?
If clients fail to pay for services provided, the costs are charged to the branch, market, region, and division thereby reducing profitability.
Example:Employbridge had to write off $4.6 million that Matheson owed to the company due to Matheson’s inability to pay and subsequent liquidation.