Credit Management Policies

Credit management policies are a set of guidelines companies use to decide how they extend credit to customers and how they manage and collect outstanding payments. These policies help ensure that credit is offered responsibly, minimizing the risk of bad debts while maximizing sales. They cover aspects like determining credit limits, payment terms, and procedures for handling overdue accounts. Effective credit management balances encouraging customer growth with protecting the company's financial health, ensuring cash flow remains steady and the business stays financially stable.