Why have a Customer Credit Policy?
The Customer Credit Policy is primarily about managing the credit you give a customer and how you assess their creditworthiness. If you are not turning your receivables into cash, then it could affect the terms you pay your suppliers and your good relationship with them.
*** If a business owner is not prepared to evaluate the customer correctly, then credit could be given to a customer who has no intentions of paying in the first place.
When offering a customer credit, you could get bigger sales. And to be effective, your customer credit policy should be tied to your sales strategy. But offering credit will have costs for your business.
The cost of borrowing to fund the ledger is obvious. But the cost of not having the money in the bank for an extended amount of time may not be so obvious. Costs such as unearned interest and the labour costs of collections. That is, until it starts to show in your decreased net profit. These costs can be mitigated by establishing a smart customer credit policy and adhering to it by carefully managing who you give credit to and the accounts receivables collection strategies.
My Experience to Deliver this Course
I am a business manager, qualified trainer, and small business owner. My background has been in office administration and then business management for over 25 years in 20 different industries. Cash flow control and cost management in addition to accounting, budgeting and customer debt collection has been my strengths. I was also a quality assurance manager and my role included writing policies and procedures. So I would like to share my knowledge and experience with small business owners and administration personnel to reduce the chance of writing off a sale by getting the customer to pay their account on time.
Join me in the course
I am sure you are like most people who go into business; you are doing it to make money, and you feel you need to give credit to make sales. Debt collecting costs you money. So let's give you a new strategy of running your business by assessing for the customer for creditworthiness, so you can reduce that cost considerably and keep a good relationship with your customer.
