A credit policy helps to establish a company’s standards and procedures for issuing credit and collecting unpaid debts. These policies clarify the types of customers whose credit will be issued, the terms of the credit issued and payments to be made, the responsibilities of the team, and how unpaid debts should be collected. You can use this free credit policy template to build your own comprehensive credit policy.
The goal of this credit policy is to outline the requirements for issuing credit to qualifying clients of [Sender.Company] and how the credit will be monitored thereafter. It also explains which teams at [Sender.Company] are responsible for issuing credit and how unpaid debts will be collected.
This is a general introduction to a credit policy that outlines the purpose of the policy, but if you have a specific goal in mind for your company’s policy, feel free to specify accordingly.
This policy applies to every employee of [Sender.Company] and is valid for all sales within [Sender.Country] .
If this policy doesn’t apply to specific departments, regions, or teams, make sure to add that to the scope.
The credit department will collectively review new credit applications to approve applicants and determine credit amounts to be issued. The amount of credit issued to an applicant may be lower than the maximum if credit reports reveal limited credit histories of less than five years, low credit scores, or ratios below 1:1. Current accounts may be subject to credit modification based on the results of intermittent credit reviews.
In terms of specific credit terms, [Sender.Company] will provide a credit of no more than ($ insert dollar amount) to qualified applicants at an interest rate of (interest rate number)% applied to each payment.
The head of [Sender.Company] 's credit department can increase or decrease a credit line and demand a guarantee on a personal, corporate, or bank level from particular clients before issuing credit. All credit repayment terms are net 60 days, barring exceptional situations approved by the head of the credit department.
All client terms of sale are standardized according to [Sender.Company] ’s current sales programs and promotions. The credit department head is responsible for approving all modifications of the terms of these promotions and programs on a case-by-case basis to maximize sales outcomes wherever possible. The sales terms for all clients are 60 days unless otherwise specified.