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Give Them Credit

Before you extend credit, make your credit policies crystal clear to customers.

Opinions expressed by Entrepreneur contributors are their own.

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

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

Of course, make sure the customer signs the document. Anddon't forget the obvious--ask for and check creditreferences.

Excerpted from Get Smart: 365 Tips To Boost YourEntrepreneurial IQ

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