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- Customer Purchase Orders, Errors on POs and their Impact on Collections
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- Unearned Discounts; Unearned Cash Discounts; Cash Discounts
- Enterprise Resource Planning
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- Evaluating Financial Health
- Profit Margin as a Credit Decision Tool
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- Internet as a Source of Credit Information
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- Open Account Sales; Open Account Terms; Extension of Credit on Open Account Terms
- Order Approval; Order Hold; Credit Reviews; Pending Order Review
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- Requesting Financial Information from Customers
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- Seller's Invoice
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- Terms of Sale: Examples
- Types of Credit: Consumer Credit; Bank Credit; Commercial Credit; B2B; Business to Business
- Written Credit Policy Manual
- Handling Post Audit Claims More Effectively; Post Audit Claims
- Do's and Don'ts of Business to Business Debt Collection, Debt Collection Practices
- Bad Debt Reserves
- Advantages and Disadvantages of Purchasing Credit Insurance
- A Letter of Introduction
- Addressing Chronic Slow Pay Customers
- More about Cash Forecasting
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Profit Margin as a Credit Decision Tool
Should the credit decision be impacted by the profit margin on a sale? Yes, but profit is realized only when the outstanding balance is paid. If the customer never pays, it does not matter what how high the profit margin was on the sale. For this reason, the credit department's primary focus must be on collectability. Second, the creditor would examine how soon to expect payment. Further down the list is the profit margin on the sale.
Copyright 2009 by Michael C. Dennis, author of "1001 Collection Tools and Tips."