1. No Clear Credit Policy
You give goods or services on credit without any fixed rules. There is no limit on how much credit a customer can take or for how many days. Everyone gets credit, even those who never pay on time. Without a policy, bad debts keep growing.
2. No Check on Customer Background
You sell to new customers without checking their payment history or financial strength. You trust only on words or relationships. Later, some customers delay payment or disappear completely. A simple background check can save you from big losses.
3. No Written Terms and Proper Records
Payment terms are only spoken and not written in invoices, agreements, or purchase orders. Invoices are sent late or have mistakes. When a dispute comes, you have no proof to ask for your money. Weak records make collection very difficult.
4. No Regular Follow-Up System
Nobody is responsible for calling or reminding customers about pending payments. Follow-up happens only when cash is short, and then it is too late. Customers take you lightly when they see no pressure. Old dues become harder to recover every month.
5. Sales Team Focuses Only on Sales, Not Collection
Your sales team is rewarded only for making sales, not for recovering money. They sell to anyone just to meet the target. Owners also hesitate to ask for payment because they fear losing the customer. This creates a habit of delayed payments.
Simple Rule: A sale is not complete until the money is in your bank account.
CA Sukhvinder Singh
Business Coach
Growth Mindset Coach
Mob- 9811518762