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America feels the Heat!

Did you know….

There was a 57% increase in home foreclosure filings in March, compared with the same month last year?

 
Keep your eye on the economy for the next year and a half and make sure your business can survive this terrible economic crisis.  Are any of the people being foreclosed on, your customers?  How can you help them while helping your business?

Keeping your head above water will become harder and harder in the coming months.  Take practical steps to make sure you can stay afloat.  Don’t extend credit unless you are POSITIVE you will be paid back.  With the economy in such turmoil, many consumers financial positions are changing overnight, you need to be aware of this and make sure you will be paid for your services or products or your financial position will change and it won’t be in a positive manner.

Revolving Credit May Pose Next Risk - Top 5 ways to Tighten your Credit Policy Belt

If your business extends or offers credit you will want to really take steps to minimize your exposure to high-risk debt in the coming months.  You may have noticed that many banks and lenders have much stricter guidelines for applying and being approved for credit lines. 

Bankruptcies are expected to soar in the coming year and with revolving credit becoming something that is much harder to obtain, cash is king. 

Some things to remember as you tighten your credit policy belt:

1. Be clear on the terms of your deal, get it in writing!
2. If credit is extended, WATCH the accounts, keep them up to date.
3. Have a penalty for past due balances, such as a late fee, or terminating the privilege of credit.
4. Research collection agencies now, so when or if you have a problem, you know which agency will work the best for you and your company.
5. Have every customer sign a credit application and check their credit!!!

Can a bad economy mean more profit?

High gas prices, rising unemployment, and a bad economy have made it tougher for people to pay their bills and live week to week.

I recently read an article “A bad economy can mean a boost in business for some” by Cosby Woodruff.  Woodruff states that when times are like this, the number of past due accounts are up but it is harder to collect on them.  This is very true. 

Woodruff goes on to say that when money is really tight, many companies don’t go through the debt-collection process.  I was surprised by this statement since this is one of the major ways a business can increase it’s bottom line, in times like this.

What are you doing to increase your bottom line as the economy struggles?

Are you collecting on your past due accounts or outsourcing them to someone to collect for you?

Read more entries at BizCreditPolicy - Business Credit Policy »