Basic Outline for Developing a Credit Policy
Originally Published: December 2011
A credit policy, however, should be more than a list of credit department guidelines. Properly developed, it can be a critical tool for maintaining alignment on credit issues throughout your company.
A well-written, comprehensive credit policy communicates a consistent standard to your customers. It documents and supports corporate goals, clarifies authorization levels, defines expectations and responsibilities and enhances cross-functional cooperation especially between the credit and sales departments.
Sounds great, right? So, where do you begin?
While there is no single definitive credit policy, this article outlines some of the items you should include. We have also provided sample text you can edit and customize for use in creating a credit policy that meets the needs of your particular organization.