Upon Request – ASI Social Network: Artistic Toy Credit Policy and Procedure

Based on the 28 comments to Josiah’s (ASI/285446) Deposit and Payment In Full… topic posted on the ASI Social Network Forum it is good to see that most distributors are collecting deposits or payment in full before accepting orders from customers. I was excited to get requests from Anita Patterson and Donna Weaver to see Artistic Toy’s credit policy. I hope distributors find this policy helpful and let me know if you have suggestions or comments.

Standard Language on Quotes to Customers:

TERMS: 50% DUE WITH ORDER, NET DUE ON SHIPMENT. TERMS ONLY EXTENDED TO CUSTOMER WITH MORE THAN 3 ORDERS. TERMS GRANTED ONLY WITH APPROVED CREDIT. CUSTOMER WITH TERMS WHO DO NOT PAY WITHIN TERMS WILL LOSE TERM PRIVLEGES.

WE ACCEPT: AMX VISA MC DISCOVER

CARDHOLDER NAME: __________________________ CUSTOMER SIGNATURE: _______________________

CARD NO: _____________________________________ EXP DATE _____

SECURITY CODE ________

Customer message sent along with Sales Order Confirmation:

We received your purchase order acknowledgement. Attached is a Sales Order Confirmation, please call us if you have any questions.

The following information is critical to ensure efficient processing of your order:

1. No product proofs will be started until 50% deposit is collected.
2. No Credit Terms are extended to customers with less than 3 orders.
3. Invoice balance is due on date of shipment.
4. Customers with credit terms who do not pay within terms will lose term privileges.
5. Customers who pay by credit card at end of term will be assessed additional 2% credit card processing fee.
6. Order cancellation is subject to minimum 25% of total order.

Best Regards,

Accounts Receivable


Notes and Explanation for Policy Requirements:

After a customer has 3 orders and approved credit application, then we extended Net 15 day terms. Why not Net 30 day? We have found that customers have different interpretations for Net 30, meaning payments generally arrive closer to 45 days. To avoid confusion our terms are Net 15 with a 15 day grace period. On day 31, customer will receive a 10 Day Free Demand Letter from the collection agency and lose future term privileges.

This policy is not perfect, but it does eliminate a lot of stress with collections and cash flow. In situations when the orders ship to customers outside the United States or have a value in excess of our own financing abilities we require a Letter of Credit or payment in full before shipment.

Key Implementation Tip:

We have found that these policies and procedures to be most effective when communicated with customers upfront before a quote is prepared. This eliminates any confusion and gets the money issue out of the way in the beginning. Sometimes it’s better to tell a prospective customer, “While we would like to do business with you, we might not be the right fit for you.” If the customer and vendor are going to disagree it is better to agree to disagree early in the process. We all have choices on who we want to do business with and I continue to maintain that “The Customer is always right, just not always right for me.”