Chapter 1
Getting to Know Credit and Collections
In This Chapter
Implementing written credit policies
Keeping good records and documentation
Chasing down slow payers
Hiring an outside collections agency
Considering litigation
When you’re in business, you may feel that a competitor always lurks on the horizon, plotting and scheming to take away your customers, cut into your market share, and take your profits. And you’re right. Competition is a fact of life, and with it comes the pressure to extend credit to all the customers who come your way, whether they deserve it or not. After all, if you don’t give customers credit, they can probably find a competing business that will.
If you’re relatively new to the credit and collections process, you may be asking yourself several questions:
Should I always be willing to open a line of credit for a customer?
How do I balance the risks of extending credit against the risk of losing the business of customers I turn down?
What happens if a client doesn’t pay an invoice?
How can I deal with issues such as bad checks or disputed claims with a customer I’ve done business with?
What do I do if a customer suddenly moves, leaving no address or phone number to make contact?
Can I file a lawsuit, and how do I sue?
When do I need a collections professional to help me, and how do I find one?
This chapter addresses those questions, and the remaining chapters of this book explore credit and collections issues in great detail.
Establishing Good Habits ...
