A decision faced by most value-added businesses is whether to extend credit to the purchasers of your product/service. Although sales can be stimulated by extending credit to purchasers, it also requires you to have more working capital to finance the credit sales. More important, collection problems can result in additional costs associated with collecting accounts that are over due and writing-off uncollectible accounts.
Information to help you assess your credit and collections program is provided in the box at the right.