Every business has bills to pay. And if you extend credit to your customers, you could be at a bigger risk in making sure your bills get paid. That means you need to have a credit policy (pdf) in place and you need to make sure you monitor your customers’ credit on a regular basis.
One of the biggest mistakes I’ve seen business owners make is to extend credit to a customer who already owes them money. Hello??? Why would you do that to your business? If someone is already behind on what they owe you, the likelihood of you getting paid gets even slimmer if you allow their debt to grow. Just don’t do it.
And you want to step up your “in person” interaction with these folks too. Face-to-face is best, but at the very least make it voice to voice according to an article about credit risk recently published in CFO magazine.
What do you do in your business? Do you have credit policies in place? How are they working for you? Let’s talk about it. Please leave a comment.
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