Credit terms and credit policy
Lee Andrews (CFO/Director, Pacific Bag, Inc.)
| May 5, 2011I would appreciate some help in creating a written "Credit Terms and Credit Policy" section into our broader accounting policies and procedures manual. What we have today is too brief and unclear for those deciding on customer credit. I am seeking deeper wording on how a new customer will be assessed for credit, ongoing credit reassessments, shipment holds, etc., including D&B reports, references, etc. I realize that different companies will have different limits and credit methods -- I would appreciate seeing some already working policy documents as a guideline (web link or a document sent to my email which I'll provide to responders). Any posts, ideas or document examples may be helpful to other users. Thanks.
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Answers
Company: in-between
Lee:
What type of industry are you involved in? I have some drafts from different companies and could assist if I know better the business model your company utilizes.
Or you can see my linked in background if you want to see the types of companies I've been involved in writing policy for in the past.
http://www.linkedin.com/in/jameshduke
Company: Pacific Bag, Inc.
Hi James -- thanks. The company is in specialty packaging distribution (largely USA, but some foreign), has a small value added manufacturing sideline add-on component for some products, and customers are in coffee, food, pet food, etc. Without disclosing private company total revenue info, a large customer would be in the mid-6 figure annual revenue range, but there are many smaller 5-figure revenue customers. Generally a very successful sales oriented company, with little in bad debt history -- but the recession is shifting the bad debt experience a bit so we don't want to rest on past laurels any more. We need some better documentation for stricter credit guidance and procedures. Lee