As a small business owner, it can be tempting to offer credit to customers in order to make a sale or build a loyal customer base. However, selling on credit can also come with a lot of risks and can ultimately harm your business if not managed properly. Here are some tips on how to avoid selling on credit as a small business owner:
Set clear payment terms: Make sure that you have clear payment terms in place before making a sale. This could include a payment due date, and any other terms that are important to your business. This will help you avoid misunderstandings with customers and ensure that you are getting paid on time. Using Apps OnTrack Business App help to record credit sales and track payment, you can even send a reminder to customer asking him to settle outstanding payment.
Require a deposit: Asking for a deposit upfront can help mitigate the risk of selling on credit. This way, you have some financial security in case the customer does not follow through with their payment.
Offer alternative payment options: Instead of selling on credit, consider offering alternative payment options such as third-party instalment solutions popularly known as Buy-Now Pay-Later, or even layaway plans. This way, you can still give customers flexibility while also reducing the risk of non-payment.
Monitor your accounts: Regularly monitoring your accounts and keeping track of payments will help you stay on top of any potential issues with customers who are not paying on time. This can include sending reminders or following up on late payments to ensure that you are getting paid in a timely manner. By using OnTrack Business App this can be vary easier for you.
Selling on credit can be a risky endeavor, but by following these tips, you can avoid the potential pitfalls and protect your business. Remember to always set clear payment terms, require a deposit, offer alternative payment options, evaluate your customers, and monitor your accounts to ensure that you are making smart financial decisions for your business.
