It is always best to have a credit card or advance payment on file. However; sometimes a business is required to grant open account credit to reach their sales goals.
When Granting Credit, it is always best to use the following tools:
Design and write a policy to grant credit that also includes how you will establish credit limits.
Get and use a good application before granting open account credit.
Verify Credit – How is the prospects’ paying history – Pull a business or consumer report.
Capability – Do they have the appropriate source and amount of income?
Stability – Are they stable in their job or business? How long have they been employed or in business?
Acceptance or Decline – Put this in writing to the prospect with specific terms for payment of reasons for decline.
Establish a Collection System – The best time to collect a receivable is when it first comes past due, not 60 or more days old. Use our Voice Blast System to send professional gentle reminders or use our Audit System to send a written notice that will find a problem fast or obtain specific payment arrangements. The fee is just $7 per account for the audit service. Call 1-800-613-5110 for details.
IMPORTANT - If you grant credit properly and follow up on past due customers you, will get more business and obtain customer loyalty for being on top of these issues. One thing is for sure, if a client is not paying you, soon they will avoid you, and then they will go to your competition for services needed. You may have made a mistake, and they are not paying on time because they are waiting on you to follow up.
