How can a seller determine a customer that is credit worthy?

[Trush Jodie]

We always say that we should not do any form of credit sales in our business. But is that really practical? That could mean locking out some loyal customers.

Agreeing that credit sales is part of business, how do we determine a customer that is worthy of credit?

 

[gwolf666]

I believe that completely avoiding credit sales can be detrimental to business growth, as loyal customers often value that flexibility, which strengthens long-term relationships. However, I also understand that offering credit without proper controls can jeopardize the company's financial health. The key is to establish a clear and reasonable process for evaluating customers before granting them credit. I personally believe that factors such as payment history, length of time as a customer, financial capacity, and business references, if available, should be considered. Furthermore, implementing credit limits and specific payment terms helps manage risk. It's not just about blindly trusting customers, but about conducting an objective and ongoing evaluation of their behavior. Trust is built, but it's also maintained with appropriate controls to protect both parties.

 

[Fidelia]

You allow customers to build their credit worthiness over time. You can give them very small credit and see how they are diligent with paying back.

 

[Augusta]

You should review multiple sources when evaluating the creditworthiness of a customer. This should include: Customer history: credit history details how long each account has been open,

 

[eLdavis]

A customer that sticks to his words or promises is one that can be credit worthy. Personally i don't give out credits unless am okay with loosing the money.

 

[Kross]

Before you give a customer credit, be sure that he or she has what it takes to payin terms of potential income as you both have agreed.