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PLAN ON DOING BUSINESS
ABROAD? HERE’S WHY CREDIT
MANAGEMENT IS CRUCIAL
Proper credit management empowers businesses to protect their finances and profit
margins while also decreasing debts. Best practices? It is vitally important that
business owners do their homework by collecting all the relevant information about the
potential client. Most importantly, that information should be easily accessible or
offered at request. Another important box to tick is their financial history, including
credit scores, payment records, or outstanding debts. As difficult as this may be to do,
particularly in emerging markets, thoroughly checking and contacting individuals that
can either reinforce a statement or deny it will definitely pay off on a long term basis.
In addition, businesses should make sure the agreement terms are as clear as possible.
Disputes can arise otherwise and it can be easy to fall in a trap because of vagueness
or space for interpretation. An effective credit management plan will always include
crystal clear processes and up to date information, preferably with payment required in
advance but depending on the nature of the business.
In a simpler way, many times and especially during a crisis and not only, the temptation
of taking a risk in an effort to gain a win increases. Such moments are key for decision
makers and they need to be thought through. Should payment inconveniences occur,
the wrong decision may cost a business more than not taking the risk.