Why over-credit selling could be a problem in business.

[TOZZIBLINKZ]

There is absolutely no business owner that would want to lose his or her customers and clients that is why they try all their best to make sure that they keep their various customers and clients close and more coordinated to themselves by issuing the business activity of credit selling . By definition and description the commercial activity of credit selling simply means when an individual sales of renders goods and services to his customers and clients without the immediate physical collection of cash but rather cash collection is to be taken sometime later in the future . There is no problem for a business to issue credit sell to its customers and clients but sometimes overdoing it could lead to the liquidity and to the bankruptcy of the business . Over credit selling of business goods and services to various customers and clients of a particular business organisation could lead to so much bad debt on the parts and on the business books of account of a particular business organisation and we all know that encountering a lot of bad debts in a particular business year simply means no or low business profits .

Some business organisations sometimes issue credit sale to their customers and clients without even keeping proper record of it . If you are a business owner and definitely acknowledge the business activity of credit sale in your business you must endeavour to keep track of the customer or client involved and also the amount of money you intend to receive from them .

 

[CALVINDOL]

The issuing of credit sale in a business organisation is totally one of the ways to win the loyalty and trust of your various business customers and clients because customers and clients absolutely love a business owner that understands the situation and also understands the situation when they do not have physical money or money to give for a particular good for service but promise to pay back when do you and when with money . When a business owner understands the situation of his or her clients and customers he or she is more likely to win the loyalty .

Despite the fact that issuing credit sale in your business organisation is one of the ways of winning your customers loyalty and trust but one thing is advised that it must not be overdone because overdoing the commercial activity of credit sales will totally make you lose your business products and services without making any profit and any income at all and sometimes you may not even be able to know the financial standing of your business because you have accommodate a whole lot of business debt that are yet to be paid . There is absolutely no connections textbook or handouts that says that issuing credit sale is a bad thing in business but one thing we must understand is that we must do this cautiously by always keeping track of which customer and which clients owes you money and on what day the money is to be paid .