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Firms stay acurrent about their payments and receivables via credit policy. Customers who were slow payers and fall behind or are unable to pay at all can be checked via credit policy.
A credit policy should include clearly outlined procedures and actions for when someone can't pay so you can immediately take steps to help your customer and protect your business.
Thus the significance of a credit policy is recognized when with the strength of a firm. It is not useful to have your money floating in your the market and you dont have enough to run the business or meet the administrative costs
Credit policy basically defines any company's criteria for supplying the goods on credit . it will help companies to select customers according to policy guidelines and how much credit to be provided to them.
