As a credit grantor, you should be aware of some basic principals:
- Granting credit carries an unavoidable element of risk. You will have some losses regardless of how closely you screen applicants.
- There are some fundamental procedures that can help in your collection efforts. While no collection procedures will completely cover all your needs, there are some general ideas that can assist you, regardless of the goods or services you provide.
- A clear understanding by both parties of the terms of the credit transactions when it is initiated.
- A systematic and diligent follow up of every account.
- A periodic age analysis of every outstanding account.
The Boston Herald recenly asked me about this topic to share with their readers in their business section. Because of the credit crisis, this is a very popular topic right now, and everyone is looking for answers.
Our company extends terms to businesses, however, there are certain staffers that try to use this as a selling tool and try to create special terms for special customers. I know that you have to extend the same credit terms to the same type of businesses and cannot favor one over the other by giving them more days in which to pay their invoices. However, I have been searching the web for the law on this, but have been unable to find. Please assist on the law.
Posted by: Anonymous | April 26, 2008 5:10 AM | Permalink to Comment