Credit Policy for businesses and how to extend credit and manage credit risk

Everyone talks about how you should have a credit policy, but what is a credit policy actually made up of?  What are the things that you put together and present as "My Credit Policy"?  Here are the things you should to that will ensure you have a credit policy:

• Getting a signed Credit Application

   

• Checking references

   

• Getting a signed contract or agreement

   

• Pulling a credit report if possible

   

• Setting a reasonable credit limit

   

• Staying on top of your customers accounts and balances

   

If you do those things, you have a credit policy.  If you enforce those things, you have an awesome credit policy.  A credit policy only sounds difficult, confusing and scary, when it really isn't.  By taking those 6 steps listed above, you can have better paying customers and make more money.