What to Consider before Extending Credit Terms to Customers

Lets talk money and extending credit terms to customers. If you are operating a business and thinking of extending credit terms to customers, here are a few tips:

• Determine who you will extend credit to, the determining factors and the length of these terms

• Develop a credit application process, with trade references, banking and credit check authorization

• Pull a credit report

• Improve collection efforts and reduce the likeliness of late or default payments by exchanging payment data with the consumer and business credit bureaus

• The history and amount of revenue generated by a customer will help in determining who to extend credit terms to

• Have a collection policy in place to protect and manage your accounts receivables.

• Know the consumer laws

• Extending credits is most valuable to a business that has already established a solid cash flow

• Don't extend terms to every customer.

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