Merchant Statements can help you in your business

Does your new customer do a meaningful amount of credit cards sales through her business? If so, you need her Merchant Statements in your client file right from the start. Here’s why:

Taking on a new customer is a new credit risk you’ve chosen to take. From the first day you meet her, you discuss your credit policies, make your terms clear, put agreements in writing, shake hands and hope it will be a profitable, long-term business relationship with nothing but smooth sailing ahead. Then one day down the road, she requests an increase in credit.

Such a request could be a good thing or it could be a bad thing. Maybe their sales for your product increased. That’d be great! It could be that they’re shifting their business away from a competitor. That’s a perfectly valid reason to request an increase. However, it could be that sales are way down or that a competitor has terminated her credit privileges. Not so good. But how would you know unless she volunteers the information?

This is where the Merchant Statements come in. If you request 2-3 months worth of merchant statements right at the start of your business relationship (when your customer is most open to providing them), you’ll have a powerful benchmark sitting right there in your customer file ready for just such an occasion. When she requests an increase in credit, you request another set of Merchant Statements to compare to your first set. Are credit card sales up or down? If sales have declined, is it minimal or significant? What?

Request Merchant Statements right from the start of your relationship. Keep them in the file for future reference and use them to make informed decisions.