Everyone wants more customers and more sales. But watch out when you extend credit in order to get a new customer or make more sales, can that customer pay you?
Will they pay you?
There are some things you can do to make sure you get paid BEFORE you make the sale.
To decide how you will get paid from new customers you need to know:
- What your payment terms are.
- How and when you want to be paid.
- How much risk are you willing to take?
When you are trying to decide how much credit to extend to a new customer ask yourself:
- Do they pay their other bills on time?
- Are they normally delinquent?
- Do they pay on time sometimes and not others? Is there a reason for this?
- Do they have a job? How long have they worked there?
- Are they in the midst of a divorce?
- How much do they want to purchase a month and charge with a credit account?
- Will they pay cash while you investigate their credit?
What is the customer is another business and not a consumer? Ask yourself these questions before extending credit to them:
- How long have they been in business?
- Who are their customers? Are their customers paying them?
- Who is their competition?
- Do they have any liens, NSF checks, bankruptcies or judgments agains the company?
ALWAYS get a signed credit application!!
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