2. When you develop a credit policy, decide on net monthly terms and base it upon the industry that you are in.

3. Run a credit check on a new customer before giving credit. Get information from a Credit Bureau and ask for trade references. Be on the look out for suppliers who aren't listed as references. They may have a story to tell that you need to hear.

4. Chase the dollar, not the sale. For example, suppose your salesperson sells someone $100,000 worth of merchandise on credit. The salesperson may consider only the profit from the sale. But if the customer goes bankrupt, you stand to lose not only the profit but the expenditures that went into the project as well, to say nothing of the time your credit manager will spend trying to collect before the bankruptcy takes place. Don't be swayed by the lure of the profit without doing your homework.

5. Look for reasons to say, "yes." All to often, businesses make a quick "no" decision re granting credit. Then they feel uncomfortable and give in to the customer's persuasive arguments. Keep looking until you find a concrete reason why you should say "yes," and don't grant credit until you find it. While looking for the reason to say "yes," you might also discover the reason to say "no."

6. Keep close to the sales and marketing people. They have to fully understand your credit policy and may have concerns or suggestions to contribute.

7. Develop a procedure manual that you will share with the accountant, the sales department, management, and sales and marketing. Make sure that each department understands what each other's role is in processing the sale. Cover every single step from opening a new account to when you make your first collection call to when you get more forceful in your activities, to when to go through small claims court, etc. Get the decision-making points of the journey outlined in an orderly manner and make good decisions rather than reactionary decisions.

Ian Love can be reached for consultation at alexian@hotmail.com.

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