A: Have you ever heard the line, “The best rules are those that are unwritten”? That twist makes credit policy flexible and customer-friendly. Or, said another way, inconsistent and arbitrary. Some credit policies that find their way into policy manuals live in perpetuity. Since they are not updated or revised, they lost their relevance years ago. Employees charged with enforcing these
timeworn restrictions usually ignore them.
Despite their seeming lack of popularity, credit rules—especially those that are periodically reviewed and updated—do have an
upside. A very big, potentially profitable upside, in fact. Successful entrepreneurs know that credit rules have three laudable, business-friendly goals:
- They force a customer to make a commitment to the transaction.
- They protect the company bottom line.
- They spread credit consciousness throughout the organization.