 Effective Credit policy
Does anyone have an effective credit policy?
What I mean by that is, take an ISP or phone company, dont pay your bill by a certain date and you are cut off, no ifs, no buts, you lose the service and most likely have to pay reconnection fee and late fees.
The end result....everyone pays on time.
As a small business is there anyone out there in small business land that does this?
I am writing a credit policy at the moment which I intend to get all new clients to sign.
Existing clients would be left alone unless they are poor payers (I only have one poor payer left)
Some of the items that I want to put in:
1) Payment due within 7 days of receiving the invoice
2) Reminder sent at 14 days + $15 administrative charge
3) Account suspended at 21 days which means we will be unable to complete any work.
3b) At 60 days issue a default notice from the local court.
4) Serial late payments will mean that we will move the client across to prepaid work only which means they would have to buy a block of hours up front (minimum 10 hours) prior to any work being conducted.
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