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Check credit ratings before the sale
by Janet Attard
One of the best ways to avoid collection problems after a sale is to make sure the customer is credit worthy before the sale. Doing so is particularly important in today's economy. If it's not practical to run a credit check on every customer that wants you to extend credit, set a limit on how much credit you'll extend without running a credit check. Depending on the nature of your business and you tolerance for risk, that limit might be $500, $1,000 or more. You can buy reasonably priced credit reports and credit score reports from Experian.
Listen to the buzz in your industry, too. If you are unsure of the credit-worthiness of a business, try to find others who have sold to the businesses. Ask is they have had any trouble collecting, and if they have, don't make the sale.
How to Get Paid Sooner
Posted by Janet Attard on January 16, 2009 at 9:55 AM
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