It is sad but true that every business screws up at one time or another and has to give credit.  The work is done, the costs have been incurred and no revenue has resulted.   I was discussing just such a situation with a client the other day.  The project was £5k which had simply been credited.  ‘Don’t just credit the project’ I said.  ‘Only do that if they agree to give you more business.  Why not offer them a discount worth £5k on their next project, assuming there is one?’ ‘How does that work?’ she asked’.  I explained that if you offered a discount worth £5k on the next project of let’s say £20k then you would have done a total of £25k of work for £20k – a discount of 20%.’  In other words they have to give you more business to get the discount of £5k and the more business they give you, the less impact the credit will have.  OK this does assume there is a repeat business opportunity but if there is don’t be in too much of a rush just to credit invoices next time this situation happens to you.

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