A sale can only be of benefit to an organization if it has been paid for or else it remains a cost in the books of accounts. Credit management is therefore essential and prerequisite to any businessman who wants his business to be a going concern.
Failure to do proper credit management has lead to the death of many profitable business , if you desire to have your business live longer after you exit the world, it is very important to put credit measures that will ensure payments are made on time by your credit customers.
The sole reason for Offering goods and services on credit is to maximize sales, if the credit is not well managed it can cause negative implications to the business. Uncollected sales cause profit leakages through the cost of credit and capital in case the clients default.
Always communicate the terms of credit to your customers and ensure that they are paying on time, otherwise your high sales will be of no value to your business. A healthy bottom-line requires proper credit management measures for the survival of the business entity.
Credit control will not only grow your business alone but that of your customers as well. Help your customers build a good credit history by paying you on time.