As your business in the cannabis market has grown many of your customers who you started doing business with on a Cash on Demand (COD) basis have now started to ask to “pay you next week” or what is commonly called “credit terms” and you have obliged. Now, with close to 30% of your customers on what we call “friendship credit”, customers whom you know well, and have been dealing with on a COD and you are now allowing them to pay you on credit terms with no formal credit check or analysis as you think you have very little risk associated with letting them pay you in the future.
But what if they do not pay you when you expect them to, then what do you do?
If you are not currently experiencing, you will. If you are extending credit terms, eventually you will have a customer who will not pay you when you expect them to. If this happens and your customer has gone 60+ days with no payment, no new orders have come in, the communication has stopped and your internal efforts have failed to collect, who do you turn to?
To read the full article click here .