How can I reduce the risks of trading with customers with poor credit ratings?
If your customer has either, an Extreme Risk, Very High Risk, High Risk or Above Average Risk rating then asking for full payment upfront is the best way of doing business with them. If they are unwilling to provide payment upfront and you still want to do business with this customer, there are a number of tools you can use to increase your chances of getting paid: Ask for Part Payment: ask for a part payment upfront, before you deliver the goods or service for them. Establish payment terms and conditions: get your customer to agree to legally binding, detailed, limited terms and conditions. A solicitor can help you draw these up as they need to be unique for each and every business. Send a credit terms letter: to all new customers which they must sign and return to you. Use CREDITFOCUS to generate a credit terms letter for each new customer you credit check. Limit your payment terms: to 7 or 14 days instead of the standard 30. Offer a discount for early payment: although you can only
