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Sunday, August 05, 2007

IT Consultants and Credit

When you have an IT consulting business, you can’t give new clients credit quickly. And when you decide to give them credit, you have to keep the credit lines low until they have established a good history with you.

The Importance of Low Credit Lines

With new IT consulting clients, you should probably start them out – even with a credit application and references – with $500 or $1,000 worth of credit. You can’t risk losing $5,000 or $10,000 until they prove they can pay small invoices.

If IT consulting clients need a lot of work before they have established higher credit ratings you should probably get larger deposits from them and also make yourself able to accept credit cards. Don’t offer too much credit though, because you can quickly lose money if something goes wrong.

You Need Written Agreements

If you are selling products – hardware, software and peripherals – you can’t afford to give too much credit to IT consulting clients. You also have to make sure to get written agreements for your company, because verbal agreements are amateurish and not for today’s business world.

You need to make clear to IT consulting clients what you will be doing, how you will do it, when you will do it, what it will cost and what you expect in terms of a payment schedule. You also need to limit this explanation to four or six sentences. Larger IT consulting projects will need proposals that are multiple pages-long.

The Main Idea

You need to get written agreements and offer low lines of credit to new IT consulting clients. Type up a few sentences to make sure you and your clients are speaking the same language.

Submitted By: Computer Consulting 101 Professional Kit