There’s an old saying in business, “Nothing happens until somebody makes a sale!” This is true, of course, and so is this corollary: “Nothing happens with cash flow until the building materials customer pays the bill.”
Cash flow is the lifeblood of the building materials industry. Sometimes a business with a full order book and a large accounts receivable position will be forced to close its doors because there wasn’t enough cash on hand to pay the bills that are due now.
This is why it’s just good business to have a company credit policy at a building materials center. As somebody said, “If there’s no plan, there’s no hope for survival.” This raises the question: how do you create a credit policy?Read More