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How to prioritize tasks effectively
How to manage your time efficiently
How to reduce stress and anxiety
Check the credit rating of your customers
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.
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Credit terms should be set by the supplier
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.
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Late Payments.
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 an...
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A credit application form/agreement
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.'
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Factors that affect business credit terms:
- The type of customer,
- The size and financial strength of the buyer,
- The supplier's operating cycle,
- Seasonality,
- Payment history,
- Supplier's profit margin
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Have someone dedicated to tracking debtors
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.
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Savvy credit management
Every credit policy tells you what your company will do if a customer doesn't make a payment on time. It also tells you what process you have for doing that. You have to have a credit policy because it affects your cash flow and the risk of loss if customers do not pay.
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Establish credit limits
Having credit limits in place will fundamentally help your business in two ways.
- It establishes clear rules for you and for your customer
- Credit limits work as a protection for you and your business.
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CURATED FROM
CURATED BY
Credit management is my biggest lesson for the past 24 months. I personally lost $6, 000 to a client in Malta because of a lack of good business credit management on my part. I don't want you to make the same mistake.
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