One of our salesmen signs up new customers without providing us with enough information about the company. We learn about the customer when we receive an order. How should we establish payment terms?

If possible, it's important for credit departments to establish good, working relationships with the sales team. Typically, the salespersons’ loyalty is to their customers. Create a questionnaire that the sales staff should complete with information about new customers. Establish criteria that new customers must meet before granting credit, or start by limiting initial payments to CIA, COD or credit card until the new account has a track record. For more information read Top Ten Credit Problems and Evaluating Your Clients: Credit Analysis and Scoring.

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