Advantages of Selling on Credit

by Thando

What are the advantages for a business selling goods on credit?

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Benefits of Selling on Credit

There is one main advantage and always will be one main advantage for selling on credit: MORE SALES (AND INCOME) FOR YOUR BUSINESS.

This is very simple - if you offer customers the ability to pay you back after some time has passed then more customers will buy from you. The customers who don't have cash can still buy - they just have to pay you later for the goods.

There is a downside to this though - the more sales you make on credit, the more you are exposing your business to risk - the greater chance that some of your customers will not pay you later. To manage this risk, businesses often check a customer's credit history and use other methods to establish their creditworthiness.

by: KETU

To increase business current assets by increasing your debtors. This will also make a business have a high current ratio which will show that its easy for it to pay its short term debts.

by: Nova

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