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Credit Policy |
Geoff Jan8/07 |
Credit decisions are made by Bill ("the Credit Department"), or in his
absence, Randy, Larrie or Geoff. The sales departments and the credit
departments are set up to view and assess situations differently. This variety
of viewpoints helps the company avoid losing money on bad debts.
New Customers without an account:
- Set up a new customer using
Intranet > Customers > Add
customer
(We can also do this when we get the Credit Application back.)
There is a difference between having an account set up, and having an
account with credit priveleges.
- Fax the customer a Credit Application or tell them how to download
one from our website (in the Library section).
- Once the completed and signed Credit Application is faxed to Delta,
we check the credit references. Based on the information supplied, we set the
credit limit, or reject the application. All going well, this process can take
as little as 10 minutes. However, many companies only give credit information
by fax, so this can slow the reference checking process by several days.
- Until credit is approved, we take cash, cheques (see below), Visa
& Mastercard, or ship COD (where available).
Visa & MasterCard on shop work for credit-less customers:
This is a simple process that takes about 2 minutes. Estimate the amount
of the job, then follow the instructions in the Visa &
Mastercard procedures to reserve some money on the card. The amount is
reserved for 8 calendar days.
Customers on COD or are over their credit limit:
- Check for credit approval before releasing any order. The credit
decision is based on what the customer owes, their payment habits, and our
history with them. Credit approval is usually made on the spot, or after a
telephone call to the customer.
- If credit is not approved, the customer’s options are cash,
cheque, COD, Visa or Mastercard.
We review customer accounts periodically. At that time, some customers
have their credit privileges temporarily suspended. A customer can be put on
COD for a variety of reasons:
- Overdue bills. If a customer is on COD and places a new order, we
have some the leverage to get paid for outstanding invoices before the new
order is released.
- Broken promises, or loss of trust. This is a more serious situation,
and not as common.
Cheques & Postdated cheques:
- Cheques are usually acceptable from established companies and
individuals. If we have a Credit Application, even if the account is COD,
cheques are usually OK. Look at the notes on the account, and call the credit
dept. if any questions.
- Check with the credit dept. on postdated cheques from new or COD
customers, and cheques over $500 from first-time customers.
- Postdated cheques: usually we need a Credit Application so we
can check out the customer and make sure they are credit-worthy. Check with the
credit dept. on whether postdated cheques are acceptable from any new or COD
customers, or where the order will take a customer over their credit
limit.
- Cheques over $500 from first-time customers: call, or have the
credit dept call, the cbank to see if there are funds available before
releasing the goods. This process takes 15-30 minutes if the banks are open.
Banks only give out this information to other banks, so call our brancf of
Coast Capital Savings (604-279-5376) with the customer name; bank name, address
and telephone number, account number, and cheque amount, or fax the cheque to
her (604-273-7890). If the bank is closed, then the shipment should not be
released.
- Out of town new customers can fax their cheque to us (with the
promise to mail the real cheque). Check with their bank (as above) before
releasing the goods.
Our Credit Policy has served us well over the years. We have
substantially lower bad debts than most of our competitors, but there is still
room for improvement.
We have tried to strike a fair balance between our need for information
about our customers and the ease of doing business with us.
If you have any suggestions about this process, please let Geoff know.
Problems
& questions | Print