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Selling your products or services you should remember to state clearly on
which terms you want your customer to pay.
Should I grant credit?
Whether to grant credit, and the terms of such credit, depends on your
agreement with the customer and, to some extent, on trade customs. Many
companies grant a 30 days´ credit or "invoice month + 30 days".
Sometimes, credit is a competitive parameter similar to for instance price.
Bear in mind, however, that the longer credit you grant the greater the risk
of ending up with no payment at all. There is always an element of risk
connected to granting credit.
Exact date
If you do not have a specific agreement with your customer it is often an
adequate measure to state "net cash" or "net 8 days" on your
invoice thus signalling that you do not generally grant credit.
You can state a due date - e.g. 25 April – maybe two weeks ahead. IN this
way your customer knows exactly when to pay.
Month´s non-payment
You can also choose to just await the customer´s settling of the invoice
not requesting payment until after a month´s non-payment.
Even if you by doing so risk granting a month´s credit, you avoid precluding
yourself from requesting payment until a due date stated on the invoice has been
exceeded considerably (for instance net 30 days exceeded by 2 weeks = 1½
months´ credit).
Requesting payment
If you have stated an 8 days´ credit and the customer still has not paid
after 30 days you should not hesitate to request payment after 30 days, or
earlier, if it seems reasonable.
Requesting payment can be done by means of phone, letter or in another way.
This is entirely up to you and is mostly a practical matter.
Check for payment
If you choose to sell on credit you must be sure to look through the debtor
files at regular intervals and ensure that people have paid what they owe you.
- Go to next business issue: Mis-entry
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| Mohit soni, India |
01-02-2012 |
I have got great experience by reading it thankyou
| Akorede, nigeria |
16-12-2011 |
i was cheated
| Abera Misganaw, Ethiopia |
20-01-2011 |
I have no experience but i need your organization credit sales experience.
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Copyright © 2009 Dynamic Business Plan 05-02-2012
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