Extending Credit and your credit policy

Once you have made the decision that you will be in the business of establishing lines of credit of some sort for your clients, the next step is to establish a clear credit policy, and then of course, to stick to it.  Here is a quick primer on getting from ground zero, to having an effective credit policy.

 

1.   What is the competition doing – research.

Flattery is the best from of compliment, and we all live in a competitive environment.  What are your competitors offering as credit to their clients?  If you are able to, match or better them.

 

2.  Start with a credit policy –  up front.

Before you extend that trade credit to your customer or client, be sure that they understand your credit policy – up front – no surprises.  When both parties know what the arrangement is before any commerce occurs, then you both have valid expectations and no surprises downstream.  The best scenario is that your credit policy is in writing, and clearly laid out, and that your customer or client has a copy.

 

3. Which Leads us to.. Put it in Writing!

Credit is not a handshake, the idealistic 1940’s set it in stone with a handshake between honorable people, probably didn’t really happen in the ’40’s and it certainly shouldn’t happen in today’s litigious society.   Have it in writing, have everyone in agreement, and your downstream experience will be easier sailing.

… more to come..

Stay tuned to our Debt Collections Blog.  If you need legal help in the collection of debt in Flroida, or advise on building a credit policy for your company that will ultimately minimize your debt collection risk, please, give us a call.

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