What are the guidelines you should follow when extending credit?

Answer 1

When extending credit, follow these guidelines as you write deductively:
a. Open by extending credit and acknowledging shipment of an order. Because of its importance, the credit aspect is emphasized more than the acknowledgment of the order. In other cases (in which the order is for cash or the credit terms are already clearly understood), the primary purpose of writing might be to acknowledge an order.
b. Indicate the basis for the decision to extend credit and explain the credit terms. Indicating that you are extending credit on the basis of an applicant's prompt paying habits with present creditors might encourage this new customer to continue these habits with you.
c. Present credit policies. Explain policies (e.g., credit terms, authorized discounts, payment dates). Include any legally required disclosure documents.
d. Communicate a genuine desire to build a strong business relationship. Include resale, sales promotional material, and comments that remind a customer of the benefits of doing business with you and encourage additional orders.