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

The outlook of our economy hinges on the health of the U.S. consumer income growth.  If consumers make enough money, they will keep spending that money, but that doesn’t seem to be the case.

Many consumers have just enough money to live on and have stopped spending and saving.  Credit is tight, jobs are tight and consumers are tightening their purse strings.

According to the Wall Street Journal, consumer spending, which accounts for 70% of the economic output, didn’t shrink in the 2001 recession, even though income growth weakened. 

With credit tight and households just trying to make ends meet as well as try to have a savings, a deep slowdown is on its way if it is not already here.  How is your business faring?  What steps can you take to boost your sales during these tight times?

Depending on what you offer from your business, you might want to offer a sale or buy one get one free if customer’s pay cash.  Try not to extend credit but get paid at the time of sale. This will boost your bottom line and limit your risk as things get worse in our economy.