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 Intercompany Solutions

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Intercompany Solutions: How To Establish Great Credit With Other Companies

 

You cannot always expect companies to maintain good faith payments when they do business with you. Some companies are going to let you down. That is why you need to establish more fluidity within your accounts receivable department. That way you can account for every transaction that comes and goes.

 

1. The first thing you need to do is keep better track of who you do business with. Some companies like to check things off as soon as their part of the deal is complete. You should not check things off until the person has paid for their services. You can mark the file "paid in full" when both sides of the transaction are complete.

 

2. Most companies should have a limit to be paid. That limit is usually 15-45 days. Some companies like to give the client the benefit of the doubt. This is a business. You cannot always do that. There is something called a "Days Sales Outstanding." You need to set a goal for how long you intend to wait for the payment. Some companies are going to go past the date.

 

You need to think about your bottom line. When a company goes past the line, you cannot be afraid to call them. You need to set some boundaries. Otherwise, you are not going to make money at all.

 

3. Do you offer a credit account to some of your clients? Set some rules. Tell them how long they will have the credit policy for and how much. Some of you may work on commission sales. You are going to face pressure to extend the policy guarantee. Stick to your guns. People will try to take advantage of the situation. To read more information about company formation visit us at Intercompany Solutions.

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