Who should you extend credit to and why?

Accepting credit cards is a regular business practice and is nearly a necessity for all businesses, both large and small. But who we should extend credit to is a judgement call. If the client requesting credit is a major client and doing business with you on a consistent basis, then it may be a good idea to make buying from you as easy as possible in order to promote sales.

To extend credit to clients who are not regular buyers might cost you time and money. This is an issue that each shop needs to think about before it is raised. If you can continue to do commerce using a credit card that immediately collects the funds, I believe there are so many benefits to you and your business. Of course, with the credit cards comes a fee, but repeated billing is expensive and time consuming. The fee you pay to the credit card company might seem like a bargain.

Credit can be important to building your business. But be prepared with your system and how you will make credit work for you.

-Stephen Capper, A-1 Awards