What can be an indicator that a customer account may need a hold?

The indicator that a customer account may need a hold is represented by repeated requests for credit limit increases. When a customer frequently asks for higher credit limits, it may suggest financial strain or that they are facing difficulties in managing their credit responsibly. This concern can lead to an increased risk of non-payment or delayed payments, as it often indicates that the customer is looking to expand their purchasing ability beyond their financial capacity. Monitoring such requests helps accounts receivable teams proactively assess potential risks associated with extending further credit to the customer.

In contrast, consistent on-time payments (first choice) and increased purchases during a sale (fourth choice) typically demonstrate positive financial behavior and a reliable customer relationship. Frequent communication with the accounts receivable team (third choice) may indicate a properly engaged customer but does not inherently reflect financial distress or a need to halt credit. It’s crucial for accounts receivable professionals to understand these distinctions to manage credit risk effectively.