Credit Management | Kaufmann's Comments

Credit Helps Small Businesses Grow

When you start a business the capital required comes from your personal resources, family, friend or venture companies. As long as you do well and your business continues to grow, you will continue to need credit. Unless you have very high profit margins and minimal expenses, you simply will not be able to grow [...]

Where's the Cash? Look at Your Receivables

When you stop and think about it, it is amazing how many different choices we have to pay for the products and services we can buy. We can pay in person, over the phone or on the internet. We can pay by American Express, Discover, Visa, Mastercard, PayPal, store credit card, debit card, check [...]

What Could Possibly Go Wrong?

You Don’t Have the Cash Until You Have the Cash

There is a direct relationship between a sale and the cash in your pocket. If you have the cash, you have a sale. If you don’t have the cash, you don’t have the sale.

So many things can occur to prevent you from [...]

The True Cost of Bad Debt

When you finally decide to write off an uncollectible receivable, what is the total cost to you? If you think it’s just the amount of the invoice, you’d be wrong. To calculate the true impact on your business, you must add in the cost of other important factors that are often overlooked by management:

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The Credit Decision

In an ideal world, businesses would never have to extend credit to their customers. Instead, as soon as a product or service was delivered, the customer would pay immediately in cash.

Of course, we don’t live in an ideal world. Extending credit is just a fact of business life; you must offer credit terms to be [...]

Managing the Credit Policy

It is important to have a written credit policy to ensure that you are consistent in making your credit decisions. However, the credit policy is not just a document that you put on the shelf and refer to on occasion. Instead, it is a process that must be constantly monitored and managed.

If you are not willing [...]

Effectively Manage the Marginal Account

It would certainly be a miracle if your marginal customers could become credit-worthy overnight. Don’t hold your breath…it simply won’t happen.

However, the marginal customer can be a profit generator for your business, while at the same time representing increased risk. Regardless of how hard you try to justify open account privileges, there always remains that element [...]

Create a Credit Policy That Increases Profits

Extending credit is an excellent way to increase sales, but you must be careful how and when you extend credit. [...]

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