As you write your policies you need to understand your credit risk. Credit risk is the risk of loss due to a default on a contract, or the risk of loss due to someone not paying you as agreed. If you don’t demand payment up front you are leaving yourself open to credit risk.
Your credit risk is the time in between when the customer leaves with your product or receives your service and when you get paid.
Some steps you can take and include in your policies to reduce your credit risk are:
Get a signed personal guarantee
Offer month-to-month credit
Offer ship-to-ship credit
Ask for a security deposit
Get a 50% (or more) deposit on every order