Credit Policy

What is extension policy ? Credit is temporary capital and the impersonal of credit is to lend with the purpose of increasing profits and sales. A sound credit policy in business is the muddy print to managing by measurement and benchmark The question then(prenominal) arises is What is a Credit Policy and how does one write a Credit Policy for their specific nature of business operations? Writing an effective Credit Policy begins with an understanding of the pecuniary exposure that you or your business can endure and the sum of specie of your working capital that you would be volitioning to take chances, or rally it invest in your customers. 1.With the information-age revolution, intimacy-based activities are becoming increasingly important for existence. 2.Hence, enhancing skill-sets and knowledge is an intangible component of a credit policy. 3.I am of the family belief that what gets measured gets managed. Therefore as a study of policy one should manage by measuring results. 4.As a guideline you can write your policy in the followers sections. The contents of each section can be scripted to best fit the nature of your franchise: 1. The set-up of credit function. 2. Objectives of the credit function 3. Obtaining Information on new customers. 4.

Process of assessing the information to attain at line of credit and credit terms that will be offered. 5. Monitoring your investment in your customers 6. Defining past-due and braggart(a) debts 7. Targets, benchmarks and deadlines for the credit function 8. Analyzing the changing needs of your markets/customers. 5.Credit Management is an art and non a science. It is definitely an indefinite. 6.But as a credit adage goes get the calculations right in a calculated risk and remember that A sale is not complete till the money is collected. Credit policy Indecent exposure 1.People taking loans on high rates of interest and proving to be deliquescent customers. 2.As happened during Russias financial crisis of August 1998.,,... If you want to get a full essay, order it on our website: Orderessay

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