Granting Credit

While not being credit experts, there are some general comments we  suggest for extending credit.

•        Most people who are 'credit worthy' have an ample supply of credit  cards, which they use freely to pay their bills.  They have demonstrated their earning potential, and willingness to pay in a  timely manner.  Extending them personal credit actually restricts  your cash flow, and is discouraged.

•        It is far easier to pay a few bills, then a lot.  Your bill might be the one placed at the bottom  of the stack, to be paid 'when we get around to it.'

•        In small communities, there are many people who are well known, and  keep an 'account' at the local stores.  There word is good enough,  and they always settle their account in a prompt manner.  If your  cash flow needs can handle this, granting an 'account' to such  people displays your trust, and a closer personal relationship.  It  can easily earn loyalty, repeat business, and referrals.

•        Obviously,  in larger communities, such relationships are rarely formed.  Many businesses like to have an account from their service  providers.  It is a simple manner of bookkeeping.  Their businesses  run on a cash basis - but its far easier to pay a bill once a month for a number of services rather than write a check every time a  service is provided.

•        Check the business' payment reputation  carefully.  Many businesses never pay their bills, but easily afford their luxuries.

•        Generally speaking, whenever you can defer credit, it will be to  your advantage, except with large service accounts to other  businesses that have solid reputations.