When you start your business you will have terms and conditions usually relating to how you want to get paid and what will happen if you don't get paid in those guidelines.
Normally a customer will fill out and sign a credit application which states that they have read and understand your credit terms, payment expectations and any conditions or discounts you might offer.
I recently had someone ask me this question:
"I'm a credit and collections manager for a freight forwarding company. Lately I'm having issues with big companies who have a policy of not filling out credit applications. They have faxed me their credit references, but how can I make sure they are agreeing to our terms and conditions
if they are not willing to fill out and sign our credit application? Your advise is greatly appreciated."
My answer:
"If a company has a policy of not filling out credit applications I would not extend them credit. That is a very bad sign. If they do not sign an application they don’t agree to your payment terms and can pay when and how ever they like, not a good idea. If they don’t sign your credit application you do not have permission to check their references or pull a credit report on them to decide if you want to let them be a charge customer. If they refuse to fill out and sign a credit application you may want to make them pre-pay or pay COD, cash only. Suddenly, they will fill out and sign your credit application. Good luck!"
Seems like a no-brainer to me to get everything signed in writing - pity that some companies seem to think they're above that. Good post Michelle!
Posted by: Easton Ellsworth | June 22, 2007 8:52 AM | Permalink to Comment