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REAL ISSUES. REAL ANSWERS: Credit and Collections

“We are known for strict collection policies and notice all projects over $1,500 – $3,000, depending on the customer history.”


“Our company charges a high interest rate on credit balances that go past the due date. That has worked very well for us.”


“Putting accounts on credit hold and not allowing any additional charges until account has been paid.”

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“Only a select few builders are given in-store credit. A larger number of industrial accounts get credit due to the amount of business they do with us. If contractors are late, credit is cut off.”


“We switched to BlueTarp for the majority of our pro credit.”


“We call customers who are late to discuss the situation and request payment. That works for the most part, but there are always a few who don’t respond. For them, we use an outside credit provider to handle all the credit and collections.”

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“On-time payment discount.”


“Straightforward, agreed-upon terms with a full-time credit manager to manage the accounts.”


“For our company, it’s all about reminders. Email statements, text the customer with overdue balances, friendly reminders via email (or regular mail), etc.”

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“Phone calls at the 45-day point.”


“We offer no real inducements to paying on time, such as prompt pay discounts. As we are in small markets and know our customers very well, we generally have no problem talking about credit issues with them. The only real leverage we have aside from legal action is cutting them off and denying them access to their special orders or millshop orders until they have paid. That is generally a very good inducement to pay to keep material flow going and carpenters working.”


“Early pay discount. 5% up to 10%.”

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