Credit policy
The guidelines a company follows to determine credit terms.
A well-defined credit policy helps manage financial risk and standardizes the terms under which credit is extended to clients. It ensures consistent decision-making, aids in maintaining cash flow, and protects against bad debts. Regular review and adjustment of the credit policy in response to market changes are crucial.
Used in a sentence
Review our credit policy to ensure we're offering consistent terms to all new clients.
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4 Tips to Negotiate a Higher Credit Limit With Your Building Material Supplier
Contractors trying to grow their businesses and take on larger projects often struggle to manage the cash flow to purchase the materials they need. Many contractors use trade credit to delay paying for materials and keep more cash in their pockets. Trade credit, a type of free credit offered by material suppliers, can delay payment […]
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