Credit Policies

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•     Do you plan to sell on credit?
•     Do you really need to sell on credit? Is it customary in your industry and expected by your clientele?

•     If yes, what policies will you have about who gets credit and how much?

•     How will you check the creditworthiness of new applicants?

•     What terms will you offer your customers; that is, how much credit and when is payment due?

•     Will you offer prompt payment discounts? (Hint: Do this only if it is usual and customary in your industry.)

•     Do you know what it will cost you to extend credit? Have you built the costs into your prices?

Managing Your Accounts Receivable

If you do extend credit, you should do an aging at least monthly to track how much of your money is tied up in credit given to customers and to alert you to slow payment problems

You will need a policy for dealing with slowpaying customers:

•     When do you make a phone call?

•     When do you send a letter?

•     When do you get your attorney to threaten?

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