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

Today Citigroup reported a $9.8 billion loss for the fourth quarter of 2007 and a write-down of as much as $20 billion in mortgage-related investments in addition to deep job cuts and layoffs totaling over 20,000.

If Citigroup goes through with layoffs of 20,000 employees, as is feared, the job market will suffer even more than it already is.  Back in November, Citigroup warned it might write off between $8 billion and $11 billion in loans due to the credit crisis in the mortgage market.  Rumors are that this figure could rise as high as $24 billion in addition to the job cuts.

Additionally, Citigroup’s New York bank said it will move 9,500 jobs to “lower cost locations”.  This restructuring affects 8% of Citigroups current work force of 327,000 employees. 

Layoffs will begin this week.

Approximately 7,300 of the Citibank layoffs will be in the U.S.

Are any of these folks that are losing their income your customers?  Are you prepared to deal with your customers job loss and inability to pay their bills?  Every business owner needs to have a plan in place now if not sooner to deal with the job loss factor of the recession.  If you want to get paid, and not become one of the businesses that goes under in 2008, be prepared and have your credit policy in place and up to date. It is imperative to the success of your business and your livelihood.