Credit Policy Template

Purpose

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.

Scope

This policy applies to every employee of [Sender.Company] and is valid for all sales within [Sender.Country].

Credit and Payment Terms

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.

Sales terms

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.

Roles and responsibilities

The [Sender.Company] credit manager has sole authority to approve the issuing of credit to clients and to speak with clients about their credit status. The credit manager can delegate this authority to other credit officers in the credit department with written consent. The remainder of the credit team will only contact clients with the intent of providing instructions for paying their debts.

The [Sender.Company] sales department bears the responsibility of ensuring that the credit application form of prospective new customers is provided to the credit department in advance of order acceptance. Sales representatives are also responsible for instructing each customer regarding the respective requirements of the credit and order administration, as well as for introducing the customer to the appropriate representative of each department that they will be in contact with.

Signatures

The following parties agree to this credit policy as evidenced by their signatures below: