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To implement procedures which ensure the collection of debt, meeting of service targets and the prevention of escalation inarrear debt. To facilitate financial assistance and basic services for the community’s poor Customer Care, Credit Control, Debt Collection and Indigent Policy and provide incentives for prompt payment as well as ensuring limitedrisk levels by means of effective management tools.
A Credit Policy is a general course of action developed for recurring situations and designed to achieve established objectives. It can also be referred to as a general statement that serves as a guide for credit decision making.
The objective of Credit Policy is to streamline and standardize the Credit Department's functions for achieving the objectives such as DSO (Days Sales Outstanding) targets / collection targets set by the management.
The main objective of credit control policy is credit risk management which means to develop healty credit portfolio/asset. If the credit portfolio is healty then debts can be recovered otherwise debts will endup as bad debts, resulting in financial loss for the organization.
Hence, the aim of credit control policy is to take calculated credit risk and exposure.
the objective of credit department is to ensure the credit worthiness of existing and new clients.
To increase the cash flow through the daily collection.
To reduce the risk of default payments.
The credit control objectives differ from banks than business companies. Central bank aims by credit control policy to control exchange rates, keep stability of prices & balance between money supply & interest rates. In business environment it's man objective is enlarge sales in balance with collections during cycle life with variable credit percents according to targeted distribution against available demand keeping an appropriate control over revenue. Using instruments search reliabiltiy of clients official documents ( central bank enquiry, ownership contracts, financial statements, commercial & tax cards) and live view in client location. So credit control policy for companies is variable with company life periodes & provide variable credit percents for different worths of clients.
Credit control policy is a must have thing for any organization who deals on credit. It allows the organization to take calculated risk and to have smooth cash flows.
Good credit control delivers cash flow and financial strength. But it is also part of the sales process. For successful payment management especially in difficult times, credit controllers need to be impartial and objective, but need to understand their part in the sales process, and the short and long term impact of their decisions within the business.
Individual learning objectives
Credit management – the effect on the business
Credit management as part of the sales process
Profitable partnerships with clients
Effectiveness v efficiency
Credit management disciplines – managing your time effectively
The credit management cycle
Setting and achieving targets
Building relationships with accounts payable personnel – being versatile with different people
Communication skills – asking the right questions
Using the telephone to achieve your required outcomes
Being assertive when face with can't pay or wont pay
Asserting your payment terms and dealing with the reasons why payment isn't being made
Getting your invoice put to the top of the pile
Controlling the call
Dealing with customers “on stop”
Negotiating payment with customers
Communicating key information internally
Action Planning
