commercial credit appeal

A great way to impress new customers (and keep your business covered).

April 27, 2010 by admin Leave a Comment

A good way to make a great first impression is the new customer packet. This should be printed on business grade paper (not copied-go visit you local quick printer-and get at least 3 quotes), and sent in a good looking envelope. What should be in your new customer packet? Here are some ideas.

1) A credit application. The credit application allows your business to legally pull a commercial credit bureau and should outline your company’s terms and conditions. It should ask for 3 trade credit line lenders, and a commercial bank check (on a separate form) both of which should be signed by an officer of the customers company. This document obligates the customer to pay invoices in the terms that you permit.
2) A sales tax exemption form or reseller certificate from the appropriate state. This is an absolute must for any company in any business but retail or retail food service. If your company is doing business to business commerce you must obtain this document!
3) A request for a freight guide. This is especially crucial for your small to medium business if you are conducting business with a Fortune 1000 type company. Other wise, your company’s invoices maybe delayed by the freight auditing department or your company fined for not following the customer’s guidelines (or probably both)! This also creates more expense as your company’s accounts receivable department (or yourself if you are just starting out) must now pursue the deduction for pay back which will most often be denied.
4) A welcome to your company. This is a sales and marketing document. It thanks your new customer for their order, and lists appropriate contact people. Who should be included: the main sales contact, customer service lead, credit representative or manager, and yourself-the owner. This document should include all appropriate business cards (included in packet)!

Follow these steps, and your company can reinforce your excellent first impression and ask for new orders. This lets your customer know that they are dealing with a classy organization no matter the size. All customers appreciate class, and this is a way to let them know that your company values their business. Remember to request that the packet be sent back complete if at all possible.

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How to improve your businesses commercial credit appeal

March 10, 2010 by admin Leave a Comment

How to improve your businesses commercial credit appeal

So how can your business increase its credit appeal to other business from which you want trade credit terms? The best way is simply to make it easy for the Credit Manager or Credit Analyst to say yes. As was mentioned before paying your invoices on time is an important step, but there are other factors as well. Part of these relate to how important a particular supplier is to your business. Let me give an example:

Suppose you set up a small manufacturing business selling (you hope) the world famous “Whoitz.” In order to make the “Whoitz” you must have parts for it which mainly consist of the “Whatitz”, the “Wigget”, and the “Watchyamacallit.” Suppose a freight company who you contacted to ship your “Whoitz” wants to do investigate your credit. If all you list on your trade references are such businesses as office supply, quick printers, and the like-these are called weak references. They are not major or vital business partners and could be fairly easily changed if there was a problem. The person analyzing your credit wants to know how you pay your major suppliers-this is called the payment hierarchy and for your business, the suppliers of “Whatitz”, ” “Wigget,” and “Watchyamacallit” will stand first in the payment line because their products are vital. A company supplying paper and pencils will be at the end of the line and seasoned credit people know this. A perspective supplier will try to predict where his company will stand in the payment line, so when its time to pay bills, make sure your major suppliers, and other vital services like power and light, stand first in line. This makes financial sense.

You may also have a sheet of credit references prepared: printed, faxable, and E-mailable. As was mentioned in another article, you have already started building a business relationship with your major trade credit people and your business banker. Everything from a credit standpoint is in order and easily found, and in a professionally provided format. This makes your business appealing to a credit person, and makes it more likely that they will grant your credit terms request.