Have you ever wondered what phase and level your business would have reached if you hadn’t done the majority of the credit sales you did last month? It’s always one aspect of business that no business owner wants to deal with on a daily basis, however, credit sales are inevitable in the business world.
The lack of readily available cash to pay for goods and services should not put a stop to business. Under normal conditions, sales of goods and services can continue to be made to individuals that are interested in them and are able and willing to pay for them in the near future.
A business’s cash flow is the lifeblood, and you can’t afford to have any of it floating around. In this regard, each business should consider whether it is doing everything possible to ensure that its customers pay on time for every transaction or for every credit sales received.
Recovering business debt can be upsetting, time-consuming, and sometimes unsuccessful. It is advisable to establish proper protocols and standards for your staff and customers as regards credit sales. Having a strong credit management policy is key to being paid on time.
A credit sale is one in which the money owed is delayed and charged at a later date. Credit transactions are purchases made by consumers that do not render payment in full or do not pay at all at the time of purchase. Below are some guidelines for managing credit sales.
Requirements for Credit Sale
If a business owner chooses to give a customer credit, it must first set credit customer’s terms of sale with specifications. The credit period, and any discount you wish to give the client, as well as the discount period, will be included in these words. A credit customer’s terms of sale specify how the company can deliver its goods or services. Does the company insist on a cash sale or will it offer credit? Credit appraisal and deciding who should be given credit are used to make this decision.
Ensure sales staff are familiar with the company’s credit policy.
It’s important that you inform your employees about the credit sales policies you’ve established in the business this informs their decision on whether or not to award credit sales to any individuals. Hold daily meetings with the sales staff to stay on top of any problems with credit sales policies that they don’t comprehend.
Relationship management is extremely important.
Good customer service encourages debtors to pay their bills. If, on the other hand, you are constantly in heated arguments with your clients, who are always complaining about poor and unsatisfying services they receive from your business, and you are demanding your dues, you are in trouble.
Each Customer Should Have A Set Credit Limit.
Set a “minimum order” level for credit purchases based on the customers’ past purchasing history. Each new customer should be subjected to a credit check. Determine which customers will be eligible for credit – credit in business is not an automatic entitlement.
Record Every Credit Sales
The importance of providing a complete and accurate report on your business’s credit sales cannot be underestimated. Esopos is a powerful tool that allows you to keep track of all credit sales and debtors in your business, as well as all of the information required to recover them. If you don’t have a proper record, you’re more likely to depend on speculation or petty arguments with your customers. Make sure your business is still working on the right cash flow with Esopos