Establish a Sound Credit Policy for Your Business

As a successful business owner in the UK you are always searching for ways to grow your company and increase your bottom line.  Have you considered offering a variety of credit options to your customers so that they can increase their orders? Would you benefit from new clients who appreciate the credit choices that you extend to them? Being extremely precise and organized will mean that you can have a credit policy that benefits your company; making sure that your new policy is done correctly is crucial to the success toward which you strive. Let’s take a look at some points to consider as you begin to establish a sound credit policy for your business here in the UK.

How Much Credit Can You Allow?

To determine just how much credit you can extend to your clients you should run a statement of your cash flow status to see how much capital you have in your coffers with which to work. It’s important that you perform a cash flow report each month so that you can closely monitor the amount of funds you have coming into and going out of your corporate accounts. You should next establish the terms that you will be able to provide to clients, and then begin to discuss with clients some of these newly developed credit options.

How Will Customers Qualify?

It’s imperative that you develop a sound procedure that evaluates each client and the risk factor that they carry. You’ll only want to extend credit to clients who have good payment histories with your company; being very familiar with your client base and how they have conducted business operations with your company in the past is vital to knowing which clients should be given this credit option for their purchases.

Create Clear Guidelines for Payment and Terms

In order for your credit programme to be successful you should create clear guidelines for payment that include the terms that clients will be expected to meet. These guidelines should inform clients about the time period of the credit agreement, what interest will be charged, and how they can secure one of the business loans in the UK that will allow them to settle their obligation to your company should they need to resolve any outstanding issue immediately. Sometimes, creating a clean slate and starting over will be beneficial to both you and the customer with whom you do business. Make sure that you work with a solicitor to provide you with an authentic credit agreement that you can offer to your clients once they decide to take advantage of your credit programme. This professional can make sure that all terms are explained in detail for your protection and so that the debt can be collected easily should the client try to default on his obligation.

Establishing a credit policy for your clients can serve to grow your company, increase your profits, and develop a positive cash flow that keeps your company a viable entity in the marketplace.