While some companies use debt collections software to help get back the money they are owed, many don’t focus on building credit themselves. Survival Guide For Small Business said organizations ignore or don’t think about their credit score, a vital part of being able to expand down the road. Having good software to keep a revenue stream coming in is essential, but small business owners cannot forget about their borrowing.
“This is the perfect time to focus on your business credit score as the economy starts to recover,” the website said. “Banks are starting to ease on making small business loans and consumers are starting to spend more money. The first thing you need to do is to check what your business credit report. Make it a habit to check it once or twice a year. You should schedule this, just as you would schedule your taxes and other business reports.”
If there are any errors or misinformation on the report, companies should take immediate steps to fix it. Additionally, they should sign up for credit alerts and have a system to manage how they work with credit.
The Small Business Administration said another part of having good credit is monitoring their customers’ and vendors’ credit as well, as this will help businesses understand how much they can extend beyond their own company.
“Knowing the credit of customers enables small businesses to provide better terms to credit worthy customers and avoid doing business with customers who pay slowly – both of which can lead to improved cash flow,” the SBA said on its website.
While having good collections software is one way a business can work to keep up with the credit of customers, keeping track of their own score and making sure there are no issues is important to keep a business moving in a positive direction.