Offer only what you can afford to lose within your profit margins - you want to make sure that you’ve at least covered your expenses. Don’t extend credit past your profit margins. Don’t go overboard trying to outdo a competitor’s terms - instead, try to at least match them if it makes sense. If a competitor company has better credit terms, it might be attracting more customers. Just as you look to your competition to compare services and prices, find out how they handle extending credit to their customers. Here are some tips for setting up your credit policy: Check out the competition. As a business owner, you’ll want to make sure your policy isn’t so lenient that it leads to constant late payments, but not so strict that you lose business to competitors. Prevent late payments in the first place: As the saying goes, the best offense is a good defense, and the best way to head off late payments is to have a good credit policy in place. What to do if you still haven’t gotten a response Payment reminders: Be proactive Chasing late payments is nobody’s idea of a good time, but as a business owner, sending payment reminders is a reality of running a company that extends credit to its customers.Įven the most diligent business owner can’t avoid dealing with late payments entirely, but there are some steps you can take to collect on those late invoices - or even better, cut down on late payments in the first place. You’ve completed the work for a customer, sent off the invoice and are now simply awaiting payment.
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