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We only accept checks or credit cards. Should I still have new B2B customers fill out a credit app or similar form?

Our business is mostly retail internet sales but we do some business to business sales. We stopped offering terms to our B2B customers years ago because the delay in payment was having a negative effect on our business.

We are often asked to send over a credit app that they can fill out. Instead, we send an e-check authorization and a credit card authorization form. How can we tactfully explain and put a positive spin on the fact that we only accept credit cards or eChecks and no longer offer terms? Some of the businesses we've dealt with lately are used to 60-day terms so they're quite disappointed when we won't even offer 30-day terms.

I'd like to include this verbiage at the top of the form that I send over to B2B customers and then my employees would also be able to use it as a script.

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Sharyl, it is definitely nice to be able to do business on a cash basis, however, in a B2B environment some of your potential customers may be getting paid in 30-60 days and therefore the velocity of their cash flow is mismatched with your credit policy. You are thus missing out on additional business. Although credit applications and follow-up of customer accounts are tedious and increase the risk of non-payment, it will remain an integral part of B2B activity. Instead of offering no terms, I would suggest that you take the route of e-mailing a credit application form, asking for three supplier and bank references, and then do a thorough credit verification. Keep a careful eye on all new customers to make sure that they respect the credit terms. If you decide that your terms should be net 30 days, then have your accounting department e-mail them a reminder of the due amount 5 days ahead of schedule. Keep the pressure on until you receive payment.

Thanks George, I appreciate your help.

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