Give Them Credit

Before you extend credit, make your credit policies crystal clear to customers.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

First, use a standard credit application form for every customer. The application should list the company's legal name, the name it operates under and the principals' names. It also should provide complete contact information, including who has the authority to make purchases and who to call about invoices; both physical and mailing addresses; phone, fax and e-mail numbers; and any special instructions required.

Next, either on the application or on another form, clearly state your terms and the consequences for failing to meet them. This could include late fees, legal fees if action becomes necessary and where any lawsuit would be filed.

Of course, make sure the customer signs the document. And don't forget the obvious--ask for and check credit references.

Excerpted from Get Smart: 365 Tips To Boost Your Entrepreneurial IQ

More from Entrepreneur
Our Franchise Advisors will guide you through the entire franchising process, for FREE!
  1. Book a one-on-one session with a Franchise Advisor
  2. Take a survey about your needs & goals
  3. Find your ideal franchise
  4. Learn about that franchise
  5. Meet the franchisor
  6. Receive the best business resources
Through 5/27/21, save on our collection of recommended social media books, including:
  • No B.S. Guide to Direct Response Social Media Marketing
  • Ultimate Guide to Youtube for Business
  • Ultimate Guide to Facebook Advertising
  • And more
Discover a better way to hire freelancers. From business to marketing, sales, finance, design, technology, and more, we have the freelancers you need to tackle your most important work and projects, on-demand.

Latest on Entrepreneur