{"id":4419,"date":"2016-04-04T10:47:30","date_gmt":"2016-04-04T15:47:30","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/business-finances\/credit-debt-collection-forms-and-contracts.html"},"modified":"2024-06-06T03:58:30","modified_gmt":"2024-06-06T08:58:30","slug":"credit-debt-collection-forms-and-contracts","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/credit-debt-collection-forms-and-contracts.html","title":{"rendered":"Credit & Debt Collection: Forms and Contracts"},"content":{"rendered":"\n
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Credit & Debt Collection: Forms and Contracts<\/h1>\n
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As a small business, you may need to extend credit<\/a> — and by extension, be prepared to collect on unpaid debts<\/a> — in order to prosper and grow. Even simply accepting checks or credit cards can present a risk of nonpayment (a bounced check or fraudulent card, for example) and might be considered a form of credit extension since you would need to take action in order to collect. When offering credit to customers or attempting to collect on unpaid debts, you will encounter a variety of letters, legal forms, and contracts.<\/p>\n

The following article focuses on these various credit and debt collection forms and contracts, with explanations and examples. See FindLaw’s Accounting Forms and Contracts<\/a> and Business Accounting<\/a> sections for related articles and resources.<\/p>\n

Extending Credit<\/h2>\n

Whether you accept credit cards, personal checks, or offer specialized credit terms, you will want to have policies in place before such options are extended. If you accept credit cards, you may want to set a minimum purchase price, since you will have to pay a fee for each transaction. If you decide to also accept personal checks<\/a>, you may want to post sign near the cash register explaining that you intend to charge a given fee to customers whose checks "bounce" (meaning they are returned to the merchant unpaid).<\/p>\n

If you offer credit directly to consumers, whether it’s a company credit card or some other arrangement, you’ll want to make sure you verify the applicant’s creditworthiness and clearly explain the terms. Keep in mind that invoicing a customer for services or products<\/a> already delivered is in effect an extension of credit.<\/p>\n

Credit Application Forms: What to Include<\/h2>\n

In addition to the usual, "boilerplate" information such as name, address, and other contact information, credit applications should also contain the following:<\/p>\n