Ten common mistakes when tackling business debtors – Mistake 3: Being inflexible and failing to review terms
9 February 2016
Mistake 3: Being inflexible and failing to review terms
While it is of course vital to the survival of the business to have a credit policy, which you send out with your terms of business at the start of your relationship with your customers, it is also very important to learn from experience. With time, you will begin to identify and profile the types of customers you have who are high risk and those who are low risk. You can then tailor the availability of credit to each type of customer accordingly. Some of your debtors may have genuine cashflow issues but otherwise be prompt payers, so it is important that this is taken into consideration.
Businesses should review their credit policies to ensure that they remain relevant and effective for their business. Businesses change, economies strengthen and weaken, and there can be differing demands on cash flow. If you do not adapt your policy having learned from mistakes you have made in the past, or tailor to the changing needs of your business, you could end up in serious financial difficulty.
For more information on credit policies or any other debt recovery matter, contact Sarah Everton on 01782 525 012 or email email@example.com.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.