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

What are some of the ways a company can protect themselves or precautions they can take to protect themselves from bad debt? 

Should they change the way they do business in anyway?

ALWAYS get a Credit Application and check references if extending credit.

If the customer is not handing you cash or a check or paying with a debit or credit card at the time of the sale, GET A SIGNED CREDIT APPLICATION and CHECK REFERENCES! I cannot stress this enough.

You should have a good credit policy in place and stick to it! If you do, you will have better paying customers, make more money and make more sales. In other words, you will be more successful and have less stress from bad debt and having to deal with it.

This will change the way you do business, you will have a better customer base, and will be more productive, and spend little or no time hounding customers that don't pay or are past due.