The success of your business depends on how you handle customers, employees, products and, most importantly, your cash flow. While the economy makes its slow road to recovery–and continues to nose dive in certain communities–business owners suddenly find themselves making more collection calls in an effort to get paid.
Foreclosures are at a record high with no quick fix in sight. Home prices in 10 major metropolitan areas in October were down 6.7 percent since last year at the same time. People are losing their jobs in many industries making it more difficult to collect money. Credit is drying up at a pace not seen in decades. You may have noticed it yourself: Getting credit is becoming harder and harder.
To determine how and to whom you should extend credit you need to gather information from your customers. The most painless way to do this is to use credit applications. Credit applications give you a wealth of information you can use later if you are having trouble getting paid. You need to establish billing procedures before you start telling people what your credit policy is. This will enable you to offer your customers credit based on how you want cash to flow through your business.
