I get asked this question alot and the answer is Yes!! Just like your business plan or marketing plan, your credit policy should be made to fit and work with your business.
A service business is different from a retailer. Also, your credit policy is based alot on your personal preference, such as how much risk you are willing to take. Depending on your buisness, what you sell or offer and where you are located, these are things that can all affect your credit policy.
There is some framework that every business will use in their credit policy.
- Credit applications
- Checking references
- Checking credit
- Enforcing credit limits
- Educating staff and customers on your credit policy
If you want a bare bones credit policy, or just haven't been doing anything in regards to credit, you might want to do these few things. They can make a huge difference in your cash flow and bottom line.
If you want to create a credit policy for your buisness and need some guidelines, check out "Become the Squeaky Wheel, a Credit & Collections Guide for everyone" I have examples of credit policies you can use, or change to suit you and your buisness.
Remember, every business should have a credit policy. A Credit policy puts you in control of your cash flow and your success.
Happy collecting!
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