When you mention credit to anyone the first thing that comes to mind is “bad”. Credit means so many things but when I talk about it on my blog, I am talking about business credit. This can mean money available for a customer to borrow in some cases. If your business extends credit, you are letting someone borrow money from you with the promise of paying it back. You are deferring payment with strict terms (this would be your credit policy) of repayment. Extending credit is a privilidge you grant for the purpose of extending time to make payment on a debt.
If you don’t have a credit policy or check potential customers credit, you are giving your work and services away to strangers for free in many cases. When a new customer or potential customer comes to you for products or services, check credit, this is a first step in creating a credit policy and making sure your business has even cash flow and it helps ensure that you are making money!
Remember: You are in business to make money. You may make some friends while doing business but that is not why you are in business.
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