1. No credit policy in place.
When you started your business you had a business plan and you use a marketing plan to publicize your business. Do yourself a favor and create a credit policy so you can have a financial plan.
2. Extending Credit to anyone.
When you go to buy a new riding lawnmower, or washer and dryer and can’t afford to pay all at once, you always have to fill out paperwork. Are you extending credit to customers without having them sign or fill out a credit application?
3. Not using a Credit Policy to make more Money & more Sales.
When you don’t have a credit policy in place, you will probably have a lot of customers, but how many are paying in full and on time and how many are placing repeat or large orders? When you implement a credit policy, you create a solid customer base of good paying customers with credit limits that allow them to make larger and more frequent purchases.
4. Receiving too many NSF or Bad Checks
Are you getting checks returned to you for NSF? Do you accept checks from any customer and without verifying their information or checking ID? Accepting a check as a form of payment is a privilege you extend to your customer based on the unspoken promise that there are sufficient funds to cover the check.
Now look at your business with an unbiased eye. Do you have customers that owe you money? Do you have a credit policy in place? Do you want to get paid in full and on time and make more sales and money? Creating a credit policy can be as easy as having a filled out and signed credit application.
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