Credit Management refers to the process of providing credit,
recovering credit on the due date and also formulating a credit
policy for a company or organization. Credit Management is one of
the techniques in order to manage the bad debts of the company in
an efficient manner. Usually the credit period consist of the 15
days to 60 days and in some case even 90 days. Firm’s
credit policy is decided based on the investment a firm does in
account receivable.
Objectives of
Credit Management
Maintaining strong and effective cash collections.
Scrutinizing accounts receivables portfolio and warning signs.
Defining the credit levels for various customers.
Defining the credit policy.
Preventing non-payment and delayed payments.
Controlling Finances
and limiting of debts.
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