How to avoid accumulating many business bad debts.

[TOZZIBLINKZ]

Sometimes for a business whether large-scale or small-scale allowing the issuing of credit sales to customers , clients , and consumers who initially do not have the money to pay for goods bought or services rendered is absolutely a good way to keep customer loyalty . But overdoing credit sales can liquidate and shut down your business , that is why you must be able to make sure that you do not accumulate many business credit sales which could in one way or the other lead to business bad debts . It is advisable to keep track of business credit sales to various customers and clients who did not pay or made an initial payment . Not only keeping track of business credit sales is advised , but also you must endeavour to pursue a particular business debtor when his dues is over dued .

Even before issuing out a huge credit sale to a customer , client , or consumer who is not able to make initial payment at the moment , it is first of all advised to read and analyse the customer , client , or consumer's financial standing . There are actually two ways to do this , one way is by using your eye to read him or her from head to toe to know whether he is worthy of the credit sale . Another way is by asking other individuals to be fully informed where this individual you intend to give a credit sale is worthy of paying back at due time , So as to avoid accumulating unnecessary and uncalled business bad debt .

 

[Augusta]

I think this is why there's need for a credit card or report so that new lenders would be able to know the credit worthiness of their proposed clients. Humans are just fond of getting credits that they can't pay, this is not a shade to the genuine ones that they do pay but fall on bad times that hinders them from paying their loans. I'm referring to the perpetual debtors that gets loans and from the onset has made up their minds not to pay. This is why creditors should be very careful of borrowers to avoid having huge money outside as bad debts

To avoid bad debt one needs to first check the credit worthiness of the customers. Their track records needs to be ascertained that it has always been clean at least for 6 months.

You can asked for a collateral that fits with the amount of goods needed or products needed. The collateral should be what you can easily auctioned. You don't need to collect something that would take time to sell out, since this is your business money.

Give the instalment payment option, so that the person can make the payments in bit to help ease fast payment.

 

[Abigael]

It is truly best to avoid bad debts in a business. They are so detrimental as they could lead the business to bankruptcy. So it is best not to trust all your customers with unpaid products or credits. Some of them will not pay back and that will lead you and the business to so much strain.

One way to avoid bad debts is actually checking a person's credit history. It will tell you alot about their ability to pay back the products or money borrowed. Someone who has a negative credit history should never be trusted with credit. Especially if they still have unpaid loans.

Another way to avoid bad debts is avoiding credits altogether. If you make a rule in your business that you don't offer credits, then I am sure that people will respect it. Especially when the credits is mostly taken by family members and friends who know the business owner well.

Lastly, one should always sign a contract before taking things on credit in your business. Especially those products that are very expensive. When there is a contract, it is easier to get back the money when the creditor defaults. Sometimes the contract will even allow you to take the money directly from the debtor's income account.

 

[Sotherefore]

I don't really see the reason why people should be giving out their product on credit to other people because to me this is not the best and these people that are getting these product may not likely return it because when they finish the products they have gotten from you , They will feel so reluctant to pay back this money.

No matter the type of business I run and no matter how familiar I will be with you , I will hardly give out my products on credit except it is absolutely necessary because this is one of the things that is bringing down so many people's business.

Yes sometimes it is necessary for you to take all this action just to make sure you have succeeded in whatever you are interested to do, Because if you are to be very kind with so many people , they will likely use this against you by coming for a product or service on credit which will obviously brings down the progress of your business.

Even as a business owner, you shouldn't be fun of getting a loan here and there and be starting up a business up and down , this is not the best option too.