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Knowledgebase: Invoices
Credit Limits
Posted by Aleks Mladenovic on 12 December 2007 01:03 PM

Whether we like it or not, work is generally carried out on a credit basis, which is generally given on trust.  This is obviously risky as you are offering free credit to a company you have probably never worked for before or in some cases never even heard of.  It is easy to give them limitless credit because they keep calling you for work.  Set your limits per customer and an overall limit, this way if one of your customers fails to pay you, then you are "limited" in your losses.  Five or so percent is the norm.  Ask for credit references, 2 or 3 should be sufficient from their other suppliers. Assuming you are professional about it, they will gladly give this info to you as it is standard procedure and they will respect your professionalism.  Alternatively you can apply for a credit reference from an agency such as Experian.

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