Dec 14, 2015

Posted by & filed under Credit.

A well-thought-out credit policy focuses a company’s risk-based decision making and is a highly-regarded guide for conducting B2B credit-related business by all departments—even sales. In order to establish an effective credit policy, a credit department must first have an effective mission statement. Without this strong, secure base, anything built upon it is prone to instability or collapse. As such, the following are important considerations when crafting your credit department’s mission statement.

Risk Tolerance: A company needs to take an honest look at where it realistically wants to be positioned in the marketplace. In doing so, it also has to consider out how much risk will be tolerated to get there and whether top officials and company financiers are willing to go to such a level to make that happen.… Read the rest