The Foundation Of A Sound Credit Policy

Without a good credit manager, most businesses are unaware of how to profitably manage receivables. Rather than work in a reactive mode, building a sound credit policy is the first step toward a proactive approach to credit management. A well-constructed policy lays the foundation for the credit manager to realize the benefits of sound portfolio management.

To realize all the benefits of a formalized credit policy, nine areas should be initially addressed. The primary sections to include in a sound credit policy should be:

1. Mission Statement
2. Goals
3. Define Credit Limit Authority
4. Credit Evaluation
5. Credit Limits
6. Terms
7. Account Monitoring
8. Credit Hold
9. Collections

Burt & Associates can help you establish a sound credit policy and be there to manage your collections process. The best collection process is one which is proactive and consistent.