credit policies

What Should Be Included in a Credit Policy?

Comprehensive credit policies should cover several key areas:
Credit Terms: Define the payment terms, including due dates, early payment discounts, and late payment penalties.
Credit Limits: Establish limits based on customer risk profiles, purchase history, and financial stability.
Credit Application Process: Outline the steps for new customers to apply for credit, including required documentation and evaluation criteria.
Collections Policy: Detail the procedures for handling overdue accounts, including reminder schedules, collection efforts, and potential legal actions.
Review and Monitoring: Specify how and when credit limits and terms will be reviewed and adjusted based on customer performance and market conditions.

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