Two-Way Trust

"It's easy to open a store account," says a small-town merchant who has asked not to be unidentified. "All you have to do is ask and you have one, and we have very few credit problems." If you think this is an example of comfortably doing business in a community where everyone knows everyone, think again.

"Our success with credit comes from the way we operate the business, not just because it's a small town," he says. "It's true that there's trust on both sides. Customers trust that when they place an order and pay cash, we'll deliver. In turn, we trust them to pay when it's on credit. But the real secret is a few simple policies for handling accounts receivable backed by computer software designed specifically for our type of business."

This article explores the five key policies this retailer uses! It covers his credit-granting philosopy; collections philosophy and strategies; the mechanics of their statements; when they get tough. . . . (to read the remainder of this article, please log in below.)