Credit Policy for small business
Small businesses here in the Philippines seldom have credit policy to keep existing customers, to get paid and stay in business. The policy should include, clearly outlined procedures and actions when someone can’t pay on time so that a steps can be immediately workout to help the customers and also to protect your business. Here is an excerpt from Entrepreneur.com
Begin starting your credit policy by looking at your reports. See who already owes money, how much, and how far past due on their bill they really are. Start making some phone calls, commit to say 5 phone calls per day or more if your prefer. This will begin the process of getting back the money that is owed to you. Meanwhile, don’t let anyone else charge until you check their credit. This ensures that you will know who will be able to make a later payment, who will not, and who is just attempting to get free items.
Put out a written or typed up statement in your store of what your credit policy is, how much they are allowed to charge, how long until their payment in full is due by, and so on. This lets them know as soon as they walk in the door where you stand on credit and what you will not let them get away with.
Once a customer becomes past due, this is the time to start getting on them. Start off by sending them a friendly reminder regarding their balance. Next, maybe give them a phone call when you know they will be home. If that doesn’t work you can always pay them a personal visit if need be. Or as the final result you could always notify them that they will be sent to a collection agency if the balance is not paid.