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Credit Sale

If possible do not sell on credit.

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.

If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.
- Jeff Bezos, Amazon.com founder

Gross Profit - how to act on it
SWOT Analysis + PO
Contribution Ratio vs Markup
Credit Sale
Contribution Margen or Gross Profit
Influence on Profits
Fixed Costs / Overhead Expenses
Terms of Sales and Delivery
Reduce Stock
Keep Control
The Art of Consultancy
What is Accountancy?
Principles in Accounting
Understand Financial Info
Safeguarding Your Assets
Help to Take Action
Close your Business