Tags |
|
|
Links |
|
|
Article Check - How To Decide On Giving Credit To Your Customer
Factoring is an efficient and reliable way of meeting capital needs of the business. It is beneficial when a business promises to have definite profits in future but faces capital deficit to get the project completed.Factoring Fundamentals: Principles that govern factoring are same as those governing bank loans, credit cards and other such lending methods. The basics of factoring are divided into two main practices. When a factor purchases an estimated value of the future account receivables it is known as non-recourse
* Use it to protect you for requirements under the law.
3. Credit is based on your business relationship, in other words, how much do you trust the other business?
Use the completed Credit Application to ask yourself some qualifying questions:
* Have they been Cash On Demand (COD) for a while, and now you look over their history, and feel you could try them at Net Amount due in
E-Procurement is the process of purchasing goods electronically. The various stages of electronic procurement include identifying vendors or suppliers, placing orders and the arrival of goods. E-procurement helps to improve the efficiency of the purchase process and decreases the cost involved in traditional purchasing. Most of the paper work is eliminated, thereby cutting the cost and time required reaping benefits often to the tune of millions of dollars.Studies indicate that a firm can enjoy returns that may measure
Here are 3 ways to help in the decision process, and help minimize the risk of extending credit.
1. Evaluate the risk factors of each payment type, and decide on which level of risk you are comfortable with.
Cash: zero risk (unless you forget to check for counterfeit bills).
Credit Cards: fairly safe, the risk is on the credit card company, as long as you follow the procedures of checking the signature & expiration dates. There is a possibility of a charge back, but you will be able to provide proof of a legitimate sale to resolve that. Sales over the phone or internet are a different story, the risk is of a stolen credit card, or a fraudulent card obtained by identity theft.
See the section on Scams & Frauds in “Get Your Money EZ, A Business Owner’s Guide to Collecting Their Receivables”, for more information, and ways to protect yourself and your business. (link information is provided below).
Checks: they are riskier than credit cards, because the check could prove to be NSF – non-sufficient funds, and YOU not the bank will be out the money.
Credit Accounts: they are the highest risk, especially because of the time factor, you may not realize you won’t be paid for 30, 60, 90, or longer days!
2. Always use a signed Credit Application, and Credit Agreement.
Your credit application has to perform several functions:
* Use it to get all the information you need to make your “credit worthy” decision (this same information is needed if you have to chase them for a bad debt).
* Use it to let them know in plain English what their requirements will be, and what your credit policies are.
* Use it to protect you for requirements under the law.
3. Credit is based on your business relationship, in other words, how much do you trust the other business?
Use the completed Credit Application to ask yourself some qualifying questions:
* Have they been Cash On Demand (COD) for a while, and now you look over their history, and feel you could try them at Net Amount due in
Whatever business organization is ventured into, the capital gain is what gets the most attention. Business procedures naturally generate a handsome amount of lucrative revenues. Service management is the term used to refer to the administering of serving producing companies. This is largely in contrast with that of the agricultural and manufacturing companies, because the term service management mostly applies to information and technology sectors and at times to auto repair and housekeeping industries.These days proc
Cash: zero risk (unless you forget to check for counterfeit bills).
Credit Cards: fairly safe, the risk is on the credit card company, as long as you follow the procedures of checking the signature & expiration dates. There is a possibility of a charge back, but you will be able to provide proof of a legitimate sale to resolve that. Sales over the phone or internet are a different story, the risk is of a stolen credit card, or a fraudulent card obtained by identity theft.
See the section on Scams & Frauds in “Get Your Money EZ, A Business Owner’s Guide to Collecting Their Receivables”, for more information, and ways to protect yourself and your business. (link information is provided below).
Checks: they are riskier than credit cards, because the check could prove to be NSF – non-sufficient funds, and YOU not the bank will be out the money.
Credit Accounts: they are the highest risk, especially because of the time factor, you may not realize you won’t be paid for 30, 60, 90, or longer days!
2. Always use a signed Credit Application, and Credit Agreement.
Your credit application has to perform several functions:
* Use it to get all the information you need to make your “credit worthy” decision (this same information is needed if you have to chase them for a bad debt).
* Use it to let them know in plain English what their requirements will be, and what your credit policies are.
* Use it to protect you for requirements under the law.
3. Credit is based on your business relationship, in other words, how much do you trust the other business?
Use the completed Credit Application to ask yourself some qualifying questions:
* Have they been Cash On Demand (COD) for a while, and now you look over their history, and feel you could try them at Net Amount due in
Wherever you work, at a home office or at a work office, your office working experience depends entirely on its design and productivity. If you ask any experts, they will tell you that your office environment and ambience can tell a lot about your efficiency and productivity. A bad office design and an insipid office environment may dampen your spirit and seriously curtain your overall productivity. You may not have the required budget and necessary time to carry out a detailed office renovation work. Nevertheless, you can al
See the section on Scams & Frauds in “Get Your Money EZ, A Business Owner’s Guide to Collecting Their Receivables”, for more information, and ways to protect yourself and your business. (link information is provided below).
Checks: they are riskier than credit cards, because the check could prove to be NSF – non-sufficient funds, and YOU not the bank will be out the money.
Credit Accounts: they are the highest risk, especially because of the time factor, you may not realize you won’t be paid for 30, 60, 90, or longer days!
2. Always use a signed Credit Application, and Credit Agreement.
Your credit application has to perform several functions:
* Use it to get all the information you need to make your “credit worthy” decision (this same information is needed if you have to chase them for a bad debt).
* Use it to let them know in plain English what their requirements will be, and what your credit policies are.
* Use it to protect you for requirements under the law.
3. Credit is based on your business relationship, in other words, how much do you trust the other business?
Use the completed Credit Application to ask yourself some qualifying questions:
* Have they been Cash On Demand (COD) for a while, and now you look over their history, and feel you could try them at Net Amount due in
The number of firms offering machining services has increased over the years, which can confuse a client wanting to avail of machining services. Machining firms often take care of this problem by quoting their machining rates on the Internet or via toll free phone lines.Machining quotes are available for different types of machining techniques such as laser machining, wire electrical discharge machining (EDM), Chemical etching machining, metal stamping machining, water jet machining, and abrasive water jet machining. Q
2. Always use a signed Credit Application, and Credit Agreement.
Your credit application has to perform several functions:
* Use it to get all the information you need to make your “credit worthy” decision (this same information is needed if you have to chase them for a bad debt).
* Use it to let them know in plain English what their requirements will be, and what your credit policies are.
* Use it to protect you for requirements under the law.
3. Credit is based on your business relationship, in other words, how much do you trust the other business?
Use the completed Credit Application to ask yourself some qualifying questions:
* Have they been Cash On Demand (COD) for a while, and now you look over their history, and feel you could try them at Net Amount due in
Have you ever felt a jolt of envy to see a competitor – or even a friend – grinning up at you from a newspaper or trade publication?It kills you, doesn't it?And you know why: you need to become that authority. Prospects will gravitate to the authority on a subject they are interested in.If you can establish yourself as an expert in your industry, qualified prospects will be attracted to you. Why?Everybody wants to do business with an expert.As an entrepreneur, a majority of your focus is alw
* Use it to protect you for requirements under the law.
3. Credit is based on your business relationship, in other words, how much do you trust the other business?
Use the completed Credit Application to ask yourself some qualifying questions:
* Have they been Cash On Demand (COD) for a while, and now you look over their history, and feel you could try them at Net Amount due in 15 days (NET 15)?
* Are they brand new to you, but been in business for a few years, and their credit references speak highly of them?
* You feel comfortable based on their credit check, to extend credit to them, especially because you have tight policy & procedures in place?
* They don’t show any of the “Dead Beat” red flags?
Note: a complete listing of the “dead beat” red flags is in chapter 3 of “Get Your Money EZ, A Business Owner’s Guide To Collecting Receivables” (see the link information below).
Unfortunately, there are no exact and safe rules to follow in granting credit and creating receivables that must be collected from your customers. You will always be balancing the risk of not being paid against the benefit of more business. As mentioned above, Policy’s and Procedures in place and followed every time are extremely important in the credit process. They are the structure of your business, and save you not only time, but unnecessary risk. There are special bonus chapters in the book with examples of a Credit Application and a Credit Agreement. The book also goes into more detail of tools to use to decide to extend credit.
So to recap the steps, you are going to:
* Have them fill out and sign a Credit Application and Credit Agreement.
* Use them to evaluate your business relationship (read trustworthness here) of how they have done business with you in the past.
* Decide on the level of trust (none- they will be cash only), (some – they can have 15 days before you come hounding them), or (quite a bit of trust – they can have the benefit of the merchandise or service for 30 days before paying).
I would encourage you also to trust your “gut feelings” along with the steps above. Good luck, and may you prosper in your business!
HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.caseupon.com/article/4013/caseupon-How-To-Decide-On-Giving-Credit-To-Your-Customer.html">How To Decide On Giving Credit To Your Customer</a>
BB link (for phorums):
[url=http://www.caseupon.com/article/4013/caseupon-How-To-Decide-On-Giving-Credit-To-Your-Customer.html]How To Decide On Giving Credit To Your Customer[/url]
Related Articles:
Opening A Dollar Store - Focus on Lease Costs
Building Powerful Business Relationships That Sky Rocket Your Success
Limited Liability Corporation Definition
Bookmark it:
|