No company is protected from bad debt unless they do not extend credit. If you extend credit or accept checks as a form of payment, you need to protect yourself and your business by:
- Having a sound credit policy and sticking to it
- Checking references
- Getting a signed contract or agreement
- Pulling a credit report if possible
- Setting a realistic credit limit
Check out Credit & Collections for some free tools, letters and forms to help you with this and if you haven't already purchased "Become the Squeaky Wheel" to keep on your desk to help you with your credit policies and procedures, you can check it out at my website, amazon.com or your local bookstore.
There are ways to let potential customers know that you are serious about your business and getting paid. Print out this bulleted list and keep it by your credit applications so you know how to portray your proffessionalism and get paid in full and on time. Keep reading for more tips.
Debtors will know you are serious if:
- They had to fill out a credit application.
- They had to sign a contract or some type of agreement.
- They receive invoices right away.
- You SEND your invoices right away, as soon as items have shipped or the work is complete.
- You call right away if you don't receive payment.
- You gather all the information you can about the debtor BEFORE the sale.
- You are professional at all times.
- You are persistant.
- You make personal visits when you can.
- You offer different payment methods.
- You charge a late fee and/or finance charge.
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