This is a message to our trader, retailer and supplier clients. Start thinking more like a bank when giving credit to your customers. Many suppliers give large amounts of credit to customers – often on the basis of having a lengthy business relationship. Your bank does not think so generously – and neither should you.
Banks are very careful about examining your history and financial position before giving you credit and take as much security as possible for advancing funds. This places banks in an enviable position when things go wrong with their customers.
Suppliers often take a much more lenient approach relying on previous business relationship history or at best terms of trade to protect them. Having terms of trade is only the start. Business owners must follow through on the protection their terms of trade offer them. Business can be tough – so give yourself the best chance of getting paid.