This topic will cover the process of developing a credit policy, including setting credit limits, terms of sale, collection procedures, and credit evaluation criteria. It will emphasize the importance of a well-defined credit policy in managing credit effectively.
Credit Policy Development 1. Definition Credit policy is a set of guidelines and rules established by a company to manage its credit-related activities. It outlines the procedures for extending credit to customers, setting credit limits, evaluating creditworthiness, and managing collections. 2. Importance of Credit Policy Helps mitigate credit risk by assessing the creditworthiness of customers...…
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