{"id":4429,"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\/do-s-and-don-ts-credit-policies.html"},"modified":"2024-06-06T04:03:38","modified_gmt":"2024-06-06T09:03:38","slug":"do-s-and-don-ts-credit-policies","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/do-s-and-don-ts-credit-policies.html","title":{"rendered":"Do’s and Don’ts: Credit Policies"},"content":{"rendered":"\n
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Do's and Don'ts: Credit Policies<\/h1>\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

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THE DO’s<\/h2>

<\/p>

DO<\/b> develop a credit and collection policy if you are going to offer credit to your customers. Planning ahead and knowing how things are going to work will save you a lot of time and energy later.<\/p>

DO<\/b> be sure that your credit policy meets your cash flow needs. Be sure that you have enough money coming in from your invoices to pay your company’s bills to its vendors.<\/p>

DO<\/b> try to talk to your customer in person or on the phone about his or her past due bill. It is much easier to ignore a bill or reminder notice than a person.<\/p>

DO<\/b> ask your customer to give you a specific date when the payment will be made when you talk to him or her about a past due bill.<\/p>

DO<\/b> listen to your customer’s reason for not paying the bill. If there is a problem that your company can fix, you should do so.<\/p>

DO<\/b> contact your attorney regarding your credit and collection policy. Your attorney will be able to advise you regarding state and federal laws applicable to collection matters.<\/p>

THE DON’Ts<\/h2>

DON’T<\/b> let customer obligations “slide” without taking any collection action. The longer that you let an account go, the harder it will be to collect.<\/p>

DON’T<\/b> get angry if your customer makes excuses for not paying. Instead, calmly ask the customer for a promise of when he or she will be making payment, and in what amount.<\/p>

DON’T<\/b> have the person who sold the product be the one to collect the debt. The sales person will usually not have the ability to be impartial.<\/p>

DON’T<\/b> threaten to turn the account over for collection unless that is what you are actually going to do.<\/p>

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