Please check the credit rating of your customers before you extend them credit. If you don't, you'll be in for some nasty surprises. Your customers will be in the habit of not paying their bills on time and if you don't find this out on time you're going to have wasted a lot of money.

The person's job is to make sure invoices are sent on time and follow through on aligning your credit management strategy with every customer interaction. You need someone responsible for making sure the money is paid to your business.

Credit terms should be set by the supplier in agreement with the customer, because there are many limitations involved when a buying organization decides to set their own credit policies.

This is a credit sales agreement and should include the terms and conditions of credit sales between a creditor and a customer. This document, once signed by both parties, sets out the agreed credit terms in accordance with the law and may also be referred to as a 'credit sales agreement.'

Getting paid within 30 days of invoice date is the goal as defined in most small business cash flow management systems. Late payments can have a series of negative effects. For example, late payments may increase the risk of bankruptcy or insolvency, which normally lead to a loss of a contract and an interruption in cash flows to the business. Furthermore, late payments will lead to a reduction in working capital which is essential for any business to continue operating smoothly. 

• The type of customer,
• The size and financial strength of the buyer,
• The supplier's operating cycle,
• Seasonality,
• Payment history,
• Supplier's profit margin