Forming and Enforcing Credit Policies
Article Abstract:
An ever-changing area of corporate business is devising and implementing credit limits. Credit decisions entail intuition, which is usually dependable. Obstacles to the use of intuition include an excess of rationality and the inability to separate intuition from predjudice. Companies can have credit problems even if credit executives are careful. Protective action can be taken by monitoring receivables. A base of information for all accounts can be compiled. Scams must be watched for. Steps should be taken to improve cash flow. Good records must be kept. Financial statements must be analyzed correctly.
Publication Name: Credit & Financial Management
Subject: Business
ISSN: 0011-0973
Year: 1984
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Take a Client's Credit Temperature
Article Abstract:
The economy appears to be recovering. Company orders are proliferating. Credit executives can help this sales effort by creating imaginative payment arrangements for customers. The intial step in this procedure is appraising the customer's credit risk. The payment alternatives are then devised according to this risk factor. These options can be put in visual form. One form is the credit terms thermometer. Risks are rated in four categories, which range from unlimited credit to secured arrangements.
Publication Name: Credit & Financial Management
Subject: Business
ISSN: 0011-0973
Year: 1983
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Credit Lines by Internal Guidelines
Article Abstract:
Methods are explored to determine a quick way to evaluate the desirability of extending credit to a customer. The most often cited internal criteria is obtained by trying to determine how much profit is in the sale, and how much future profit this customer will generate. Some credit managers do not use this criteria. Proximity and pattern of purchases can also be determining factors. If internal analysis is used, an aggressive collection stance should be accepted and expected as routine.
Publication Name: Credit & Financial Management
Subject: Business
ISSN: 0011-0973
Year: 1984
User Contributions:
Comment about this article or add new information about this topic:
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