Creditors’ Rights 14
A: The only way to avoid credit losses is to act like a fast food restaurant, where the customer
comes in, orders and pays, and then, and only then, the customer gets the product. The problem with that is that the customers expect to get credit, and if you don’t give it, they may go somewhere else to buy their goods and services.
Therefore, create a company that has a culture of establishing a sound credit and collections policy from the start. Take the time to research completed credit applications thoroughly. Include interest chargeable on past due balances and a provision that if the account goes into default and you refer it to an attorney for collection, the defaulting party must pay your attorneys’ fees.