Many of us think of credit as simply a credit card that is in our wallet to use when we run out of cash or perhaps have another reason to want it or need it. But credit is much more, and if you learn to use it in business, then you will learn about a leverage tool in your business toolbox that can greatly increase your chances for success.
Credit, when extending it your clients, must net you something back. While many of your clients may feel they deserve credit just because, it is a delicate and sensitive part of business and normal life. Those clients who want credit, which is normally net 30 days, can be presented with the option of a credit card. Net 30 means the payment is due on or before 30 days.
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 for most businesses. 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. If you can continue to do commerce using a credit card that immediately collects the funds, I believe there are many benefits to you and your business.
Credit can be important to building your business, but be prepared with your system and how you will make credit work for you. Credit is a tool to help you collect when you want to, and the extension of credit is a privilege to those who deserve it (not everyone does). Credit cards can help you make collections and save clients that might have been lost.