If you are an established business and find yourself without a credit policy and many past due customers or many bad checks there are things you can do. First you want to clean up your customer base.
- Start by printing out a Credit Application and making copies.
- Address envelopes to each past due customer.
- Type a form letter in your computer telling your customers that you are auditing your books and every customer must have a signed credit application on file.
- Put a copy of the form letter and the credit application in each envelope.
- Mail the envelopes with this printed on the outside: Confidential Information Enclosed, To Be Opened By Addressee Only.
- Make a note on each customer’s account stating the date you mailed their envelope.
- Do not allow anyone to charge anything without paying for it until you have the credit application back.
- CHECK ALL REFERENCES.
- Send out approval or denied letters once you have checked credit.
- Do not extend credit to customers who have proven they are slow or late payers.
- Start offering a small discount to people who pay before terms.
If you take these steps you will see how your customer base as well as your accounts receivables really cleans up and you will start making more money with your existing customers and new customers.
Good luck! 
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