In credit management, we often regard it as a programmatic document to guide the credit management department and even the whole process, and its importance can be imagined. Explaining the word "credit policy" in this way will make people feel unattainable. To put it simply, credit policy is just an outline description that we should do in credit management. From this point of view, in fact, each company will have its own credit policy more or less, because they all have their own standards and practices in credit sales, but some are only conveyed orally, and some are carefully written in written documents; Some effects are remarkable, while others are not.

Many enterprises may have good marketing plans and incentive policies, but rarely form credit policies. They may explain that credit policy should be flexible, or they may think that credit policy is just a form, but this reflects that enterprises do not fully realize the importance of credit policy. The importance of credit policy is reflected in:

Set clear goals and objectives for the whole process.

Any work of an enterprise must have a clear goal, and credit management is no exception. Its goal is to express through the enterprise's credit policy. The process goal of credit management is an important part of the strategic goal of the whole enterprise. It is stipulated that credit management should support the overall goal of the enterprise with good repayment speed and strict control of bad debt rate. Under a clear goal, the relevant departments involved in the credit granting process can specifically arrange manpower and material resources to ensure the realization of the goal.

Each step of the credit flow is described in detail,

Credit policy first describes the process of product credit sales, which may involve sales, production, quality control and customer service departments. The process of formulating and adjusting credit policy is the process of determining the division of powers and responsibilities. Under certain circumstances, "who should do what". This can avoid the situation that no one asks questions. According to the different situation of enterprises, the content of credit management policy will be different.

A written credit policy is beneficial for enterprises to refer to and implement.

The credit management policy must form a standard written document and be signed by the management. On the one hand, the company's top managers can recognize the role of credit management in the company; On the other hand, all managers, business personnel, financial personnel, credit management personnel and other related personnel of the enterprise need one copy, so that everyone who comes into contact with customers knows the company's credit sales principle. In addition, a written credit policy can guide the daily work of credit personnel, and at the same time, it can also help the novice in business to become sophisticated quickly and avoid the business confusion caused by the turnover of personnel.

Clear approval and operation standards reduce the influence of human factors.

Because of the written credit policy, when faced with more relaxed credit conditions of customers, the credit manager or sales manager can first "politely" refuse on the grounds of credit policy, thus reducing the special treatment of credit sales by unauthorized personnel and reducing the occurrence of corruption. Usually, enterprises will sort out the parts related to customers in the credit policy and send them to customers, which also reflects the serious and responsible working attitude towards customers.

Knowing the importance of credit policy, let's introduce in detail how enterprises formulate credit policies and the contents of credit policies.

Content of credit policy

Generally speaking, the form and content of the credit management policy manual will vary according to the objectives, organizational structure and business content of the enterprise, but the basic content should include the objectives, organizational structure and responsibilities of credit management, customer credit evaluation, credit terms, credit inspection and accounts receivable management. In addition, enterprises can add relevant contents to explain the specific process of work according to the characteristics of their own industries and the specific needs of the process. Explain it separately below.

1, target

The purpose of enterprise credit management is not to make enterprises lose business and avoid risks, but to determine the scope of business risks undertaken by an enterprise, so as to increase effective and profitable sales. However, if enterprises want to increase sales and reduce risks, they should use corresponding indicators to describe them in detail, and at the same time, they should have specific figures to measure and assess them. Usually, when enterprises implement credit policies, they set the following goals:

Support the sales target of the enterprise through reasonable credit sales;

Keep the payment speed;

Keep the bad debt rate low;

Ensure a high level of customer service.

2. Organizational structure

The organizational structure here refers to the management and organizational structure related to the whole process. It must first stipulate who is responsible for the whole credit management process and have the right to make adjustments. Usually, enterprises should set up a special working group to be responsible for the review and revision of the whole process. Usually, this group should be held by the vice president in charge of finance. Secondly, the composition, organization chart, scope of work, rights and responsibilities of the credit department and other related departments should be defined. In this part, the enterprise can also explain the status of the credit department and its relationship with other departments, as well as the definition of authorization under normal and special circumstances.

3. Customer credit evaluation

This part should briefly explain the basis, method and purpose of the credit department's evaluation of customers. For example, the credit department uses the customer's payment records, financial status, internal information and external information to evaluate the customer, and the evaluation results are used to determine the customer's credit limit and credit terms.

If this part is specified in detail, it should also include two parts: customer survey and credit evaluation.

Customer survey should explain how to collect customer information. How to collect customer information by yourself? How to obtain information directly from customers and reference information from credit reporting agencies? How to update data? Wait a minute. problem

The following contents can also be agreed in the customer credit evaluation:

How customers apply for credit;

Standards for customers to sell on credit;

How to determine the credit limit of new customers;

Credit arrangement under special trading conditions;

Ways to increase or decrease the credit limit;

Procedures and requirements for increasing credit limit and extending credit sales time;

Provisions on guarantee conditions;

4. Terms of the letter of credit

Credit terms are the direct application of credit evaluation results. Inappropriate credit term will lead to the extension of credit term and the reduction of repayment speed, so credit term is also an important part of achieving the objectives stipulated in credit policy. Therefore, in this part, we should stipulate the standard terms of providing sales and services in different situations.

At the same time, it is also necessary to stipulate the approval authority of different credit lines and credit time within the enterprise, as well as the corresponding supervision mechanism.

5. Credit check

When there are long-term transactions with customers, the credit line sold to customers is constantly changing. Enterprises should have corresponding mechanisms to monitor the change of credit sales, that is, the change of risk, so as to determine the trading strategy of credit sales with customers. For example, you must add all new orders from the same customer to the original order and compare whether the total amount on the customer's account exceeds its credit limit. If the order exceeds the credit limit, it must be reported to the competent manager, who will decide how to solve it, such as paying part of the loan or some kind of guarantee in advance, otherwise the credit transaction will be stopped to control the overall risk. After the customer's accounts receivable amount or trading conditions have improved, the transaction can continue. Credit check is the main means to control the overall risk of enterprises.

6. Accounts receivable management

This part involves many contents, mainly including the provisions on the protection, management and recovery of corporate creditor's rights. In the safeguard measures, enterprises should take credit insurance, factoring, letter of credit, chattel and real estate mortgage and other creditor's rights protection measures for high-risk businesses according to the risks of different businesses, and at the same time stipulate the norms of business operation.

In the process of management and collection, enterprises should make detailed provisions on how to manage accounts receivable. Usually these enterprises can form a special collection manual. The basic content is:

Clarify various rights and obligations related to the collection task;

Establish "overdue account inquiry" system and its implementation mode;

Need to use warnings and sanctions for recovery (telephone recovery, letter recovery, door-to-door recovery, etc.). );

Timing of collection;

Determining each collection time period;

Determination of final recovery method;

The timing of using collateral and the method of handling collateral;

Time and procedure for handing over to the collection agency;

Time and procedure for transferring to a law firm;

Choice under special circumstances.

7. Other issues that need to be considered in the credit policy.

The credit policies of different enterprises may add some different contents according to the actual situation. The main contents are:

Customer bankruptcy/bad debt procedures-the steps that enterprises should take when customers go bankrupt, and the procedures for writing off bad debts;

Credit management report-the system of enterprise internal report, and the content and format of monthly credit report of credit department;

Standard forms and letters-all standard forms, agreements and internal documents can be summarized for the control and implementation of relevant personnel;

Methods to measure the performance of credit department.