How to Convert from Credit Sale to Cash Sale 5/5
There’s an enduring axiom of success that says, “The Universe rewards action, not thought.” Yet as simple as this principle seems, it’s surprising how many people get bogged down in the analyzing, planning and organizing stages when what they need to do is to simply take action.
“What we think or what we know or what we believe is, in the end, of little consequence. The only consequence is what we do.” – John Ruskin
When you take action, not only do additional resources come your way, but you get feedback that helps you adjust your course and refine your approach.
Applying Hard Brakes on Credit Sales Practice by informing our Customers that we appreciate their loyalty and relationships and as an organization we have decided to stop dealing in Credit whether its Purchases or Sales, so we would from now onward not be able to sell in Credit.
Acknowledge their Outstanding Amount and then request them to propose a Firm repayment plan of Installment Amount they would be able to repay, No. of Installments, Dates of Payment
Educate the Customer that the Cash Sales is beneficial to him as he will not have any outstanding amount with us and we are willing to service him even if the Quantity is reduced. Goods Purchased in Cash would be resold in Cash and that would increase the Sales and Cash Turnover, a win-win situation for both.
Offer better price to the Customer as we are passing the discount received from our Supplier, that way we can be competitive with regards to others who are selling on credit.
Offer Goods Return / Exchange Option to our customers for our products, thus removing customers fear of dead-stock in case the goods are not accepted by their customers. This would increase the Customer Experience and gain loyalty and support from the customer.
Educate our Employees to inform our customers about the benefit of Cash Business and request them to assist us in this regard.
Strict Cashflow Planning to utilize the Cash received from sales to be reserved for Purchases, Supplier O/s repayments, Essential Expenses.
Benefits for the Customer
The customer provides a Firm Payment Plan for the Outstanding Amount which would assist him in planning his Cashflow and not worry too much about the debt.
Receives Better discounted Price
Has the Option to Return or Exchange the Goods thereby reducing his dead stock.
Benefits for the Us
Customer Accounts Receivable effort would be reduced to zero in a short time.
Increase in Sales as our Customer would resell our product faster as purchased in Cash
More Time available to focus on New Business instead of following on Accounts Receivable
Expected Time Frame
Depending on the size of Business would be 3-6 months.
No Customer Receivables
More Focus on Selling Effort and providing Customer Service
Educate our employees about the benefits of Cash Business
After Initial apprehension the customers were able to gain the benefit of Cash and due to the support eventually the Sales increased.
1. Benefits of Cash Business vs Credit Business
2. Benefits of Cash Purchase vs Credit Purchase
3. Benefits of Cash Sales vs Credit Sales
4. How to convert from Credit Purchase to Cash Purchase