The softness of the pillow was making it no less painful. I was trembling. Shifting. Turning on either side. Finally! a shout, a loud shriek and I woke up. It was a dream – nay a nightmare – one that I would never want to live.Unpaid Invoices/ Overdue Invoices – these were the most dreadful words in my Dictionary until recently. Such nightmares had become commonplace. Ever since I had started my journey into setting up my own small business, the one thing that hurt me the most was delayed payments.
Start of Business Journey
#1 – The Payment terms!
How to handle Credit
Now it is not always that you are able to collect advances, at times you may have to give the customer credit. In this case, try to go for a guaranteed credit which will ensure timely payment. What I mean is either a letter of credit from a local bank or an avalized draft from a bank. If none of that is possible, you could make the documentation of your product delivery go bank to bank to ensure the documents are verified and acceptance notice is given to the bank. This is easier when you are delivering products cross country.In the worst case, that is in the absence of any sort of guaranteed payments, you are forced to give an open credit otherwise you simply are not going to make the business. In such cases, first and foremost, you will have to do your due diligence.