What does credit policy mean in installment sales?

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CONSTRUCTION OF CREDIT POLICIES FOR AN OWN CREDIT OPERATION
What do you think about finding out how to make them better and more effective for business success?

Before providing any information, we need to tell the store team what credit policy means. After all, it is essential that, when seeking any type of credit policy strategy for your store's operations, you have the engagement of your team, especially the sales team.

This is very important because a specific change in credit policy can drive some types of customers away from the store , being reduced in necessary circumstances, such as very delinquent customers, but which at the end of the day reduce the store's total revenue.

Remember: when the seller is always celebrating installment sales, there rcs database may be situations in which the owner may be regretting not receiving these installments. Therefore, seeking balance is the first point to be taken into account in this matter.

So, let's take a closer look at credit policies. What do you think about understanding this?

Happy reading!

WHAT DOES CREDIT POLICY MEAN AND HOW IMPORTANT IS IT IN THE STORE?
A store's credit policy is nothing more than a document with a series of criteria and conditions that are defined by the company to approve or deny a credit grant. This information is widely used to identify the most appropriate profile to be served by the company, thus reducing the rates of those who do not pay.

This is important because this feature can ensure security and increase cash flow and help in developing more efficient financial planning . Does it make sense?

On our YouTube channel, we have released a special video with tips that will help you understand what credit policies are. Check it out by clicking below ????
YouTube video
SALES TEAM: HOW TO ALIGN SALES WITH YOUR TEAM?
As we mentioned in the introduction to this article, knowing how to align credit policies with your team, especially the sales team, is essential for sales to occur in an aligned manner and for your business's default rate to decrease . Therefore, you need to seek aligned reports so that you can convey the importance of these objections to your team.

If you are the owner or director of the business, the final decision is always yours. But don't forget that you can't do anything alone. That's why it's essential to stop and listen to your team.

LEARN HOW TO MAKE CREDIT POLICY CHANGES IN STEPS:
Let's use as an example a chain that has 15 stores and is having a problem with a 20% default rate. However, the salespeople are happy because they are selling in quantity. This is not valid, because quantity alone without payment is useless.

In this case, if you establish what credit policy means and its importance to reduce default to 5%, you may even lose some consumers, but the store's cash flow will increase.

For this reason, when selling on credit, it is essential to analyze your credit score.

Making your team understand that there are some sales that don't make sense will greatly help your financial life. Therefore, alignment is necessary and credit analysis steps are essential to ensure a good definition of sales.
But in order to make these cuts, we need to understand that cutting everything at once can have a very strong impact. Therefore, the tip for doing this is to do it in stages, making the necessary changes so that the team can work on this together with the store owner.

In large operations here at Meu Crediário , we have the strategy of doing a test. We take two or three years of store movement on credit and support all these sales showing how an operation would have been if the team had done it with our score.

Furthermore, as we carry out operations, we need time to mature this portfolio. If I made a change in January, will I have to change everything again? The answer is no. It is important to have an analysis period of at least three months to understand whether sales are having an adequate default rate.

If you do this every month, you will never have time to understand what works and what doesn’t work for your business. Do you understand the importance of this qualification?

Be a good subject. Seek to be an organized and niche company for your segment.
I hope you enjoyed this content. A big hug, good sales and see you next time!

Did you enjoy learning more about this? Contact our team of experts and find out how Meu Crediário can transform your business.