Thu 10 Apr 2008
Sell Your Products on Your Credit Terms
Depending on the type of small business that you run, you might have to extend credit to some of your customers. This may be due to the size of the order or the relationship that you share with certain customers - or maybe just because the rest of the market is extending them credit.
Here are a few tips that will help you increase your sales without ending up cash-strapped.
Check Out Your Potential Credit Customers
Do a check on the reputation and credit worthiness of your customers before agreeing to sell them products on credit. Never agree to sell goods to new customers unless you are sure of their ability to pay.
Establish Some Ground Rules - and Stick By Them
Make it clear to your customers that you are quite strict with your credit terms. Ensure that your customers pay you by the end of the credit period without exception.
If you ignore payment delays, then in the future it may be very difficult for you to recover the money. If some customers have pending payments, then do not stop selling to them, but rather cut down on the value of the products that you supply to them so that slowly their credit limit and amount paid are equal.
Provide Incentives for Prompt Payments
If your customers want to pay you before the due date, then you can offer them up to a 2% discount, so that both of you are happy.
Use the above tips to ensure that you sell your goods on your credit terms and that your customers do not take advantage of you.