In implementing a credit policy the credit manager or financial accountant should establish an objective set of criteria which should address some of the following issues:-
- Conditions of sale issued to customers (it may be that different conditions of sale will apply to different customers); if so this should be clearly identified
- Details of payment terms.
- Details of any cash discount to be applied.
- Details of any interest payable to be applied to overdue accounts.
- Whether reservation of title should apply.
- Details of assessing how credit ratings should apply to customers.
- At what stage accounts should be put on "stop" and actions to be taken thereafter
- At what stage legal action should be instituted
- Whether credit data from external sources should investigated and whether credit insurance should be taken out.