Home topics finance finance-cash-flow Cashflow News Cashflow Ten tips to improve small business credit practices David Olsen February 17, 2011 Small businesses are often burned by bad debtors because they haven’t put in place solid workable credit practices to evaluate those they do business with. We asked Veda Advantage to provide ten top tips to help small businesses adopt and implement best practice credit practices. Develop a credit policy. Take the time to write out a clear and concise credit policy that applies to all of your customers and clients. Businesses should take into consideration some of the following tips when developing their credit policies. Ask for a score. Veda commercial scored reports contain key company registration details and rates the business’ risk compared to the Veda Advantage average. It also highlights whether any abnormal activity has occurred and whether there is any adverse information, such as defaults. Know who you are dealing with. Part of your credit policy should include finding out who is actually behind the business that wants credit advanced. Veda Advantage reports can be used to verify registration details and ownership. Know the credit history of company directors. Veda products can include individual director reports which detail the directors’ commercial credit history and any known relationships with other commercial entities. Check whether customers’ assets have existing security rights. Other suppliers may already have rights to claim property if bills are unpaid. Implement the policy. Make sure staff are educated on how the policy is to be