In Focus Risk
The big question: are they friend or foe?
For small companies, taking a step back and properly assessing a sale is crucial to future profitability
Krista T. Walsh President, KC Collect!
krista@kccollect.com
It is often difficult for a small-business owner to play the role of the friendly sales agent, as well as the adamant credit manager, while maintaining a relationship with the customer.
No way to guarantee Unfortunately, when extending credit there is no definite way to guarantee payment. With a proper credit policy in place, this
should decrease receivables and make it less likely for the business owner to turn into the enemy when faced with collecting the overdue account.
Eager to sell Many company owners, especially new owners, are so eager for a sale that they neglect signing documents or discussing payment. The business does not want to offend the
new customer by asking for a method of payment. They fear that if it is difficult for a
customer to obtain credit, they will take their business elsewhere. Lack of proper credit policy is the main
reason that businesses have overdue accounts. Small businesses are infamously guilty of having a weak or non-existent collection policy.
Inconsistency Some businesses have a policy but use it inconsistently, this yields less than favourable results. As one of the keys to success of any
business, receivables management must be taken into consideration when venturing out as an entrepreneur.
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www.CCRMagazine.com
Lack of proper credit policy is the main reason that businesses have overdue accounts. Small businesses are infamously guilty of having a weak or non-existent collection policy
Unfortunately, this key element is often
overlooked as the entrepreneur’s attention is pulled in different directions.
Information is key If you obtain as much information as possible from the customer when extending this credit, recovery of the account is more likely if it becomes past due. In order to successfully manage debt, it
is customary to ask potential customers for credit references. In smaller communities, it is suggested
that, in addition. you network with fellow companies, creating a mutual exchange of information. Most companies are quite willing to share
information on past delinquents to help you to learn from their mistakes. CCR
December 2018
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