Customer Credit Policy Course

The Customer Credit Policy is primarily about managing the credit you give a customer and how you assess their creditworthiness.  If you are not turning your receivables into cash, then it could affect the terms you pay your suppliers and your good relationship with them.

*** If a business owner is not prepared to evaluate the customer correctly, then credit could be given to a customer who has no intentions of paying in the first place.

QLD Government Business website link – Managing customer credit risk

When offering a customer credit, you could get bigger sales. And to be effective, your customer credit policy should be tied to your sales strategy. But offering credit will have costs for your business. The cost of borrowing to fund the ledger is obvious. But the cost of not having the money in the bank for an extended amount of time may not be so obvious. Costs such as unearned interest and the labour costs of collections. That is, until it starts to show in your decreased net profit. These costs can be mitigated by establishing a smart customer credit policy and adhering to it by carefully managing who you give credit to and the accounts receivables collection strategies.

Why have a Customer Credit Policy?

1.  It makes good business sense

2.  It is important to minimise your risk of non-payment of invoices. That being said, there will always be a customer who cannot pay and a downturn in their business can occur after the original acceptable assessment for creditworthiness. Therefore, customers need to be monitored all the time. The only way you can eliminate the risk entirely is not to give credit at all. But if you are prepared to take the risk and provide credit to get sales, then the tighter this policy the better your outcome. The Customer Credit Policy is primarily about managing the credit you give a customer and how you monitor their creditworthiness. A business needs a policy that identifies different customers who will get different terms and conditions depending on the assessment of creditworthiness.

What will the Customer Credit Policy do for your business?

The course offers a step by step guidance to preparing a policy with various strategies to assist the small business owner to manage the credit given to a customer. From the credit application to assessing the customer for creditworthiness. The aim of the suite of courses is for the business owner to manage the credit they give to a customer, so they will not have difficulty in collecting outstanding payments.

What else can a Customer Credit Policy do for my business?

• Extend credit to creditworthy customers in order to increase sales.
• You can clearly set out who you are going to give credit to and under what circumstances
• The policy shows customers that you care about them enough to explain from the start how you do business
• The guidelines are clarifed for credit and sales to work together in order to identify the customer who will pay

Companion Courses

Effective Debt Collection Strategies Course

What are the essential skills required to effectively collect outstanding customer debt?  How can a small business owner deal with customer excuses?  Learn these skills and more in the Effective Debt Collection Strategies Course.

Terms of Trade Policy Course

The purpose of having the Terms of Trade Policy is to define the terms of trade you will give a customer and the conditions of when the payment of the sale is expected to be received. This policy should be set up in conjunction with the Customer Credit Policy, so they complement with each other.

Customer Complaints Policy Course

Every business needs a Complaints Policy, but policies and procedures are not easy to write.  The Complaints Policy Course’s step by step guide for creating a policy makes the task easier.

Responding to Customer Complaints Course

The Responding to Customer Complaints Course is about the first response to a customer complaint, not about solving the problem.  The goal is to maintain a good customer relationship during the complaint process so the business will retain customers.

Collections Phone Script Course

Phoning for outstanding payments confidently and responding to customer excuses can be difficult for some people.  The Collections Phone Script Course provides questions and advice to prolong the conversation with the goal of getting a commitment for payment