Credit Management – An overview

Introduction

Management of customer receivables has a direct impact on the working capital and hence the financial health of any business as a whole. Thus it becomes important for a business to keep track of and maintain a close watch on its receivables’ status at any point of time. This would facilitate the organization to initiate appropriate actions at the appropriate time like issuing reminders, collection follow-up or put a hold on further sales to a defaulting customer. This would also provide inputs to categorize customers based on their payment behavior helping the sales team to target the right customers.  The Customer Receivables Management component broadly supports the above aspects in a typical business organization.

Feature Highlights

The major functions supported by the component are:

•  Defining credit terms, which can be attached to customers

• Specifying actions for crossing the credit limits

• Aging of customer balances and classifying overdues using the concept of credit buckets

• Credit Rating of customers based on the overdue balances

• Altering credit rating of customers temporarily and exempting sale orders from credit check

• Dunning (follow-up through reminders) of customer overdues

• Requesting for creation of Provision for Bad Debts, along with a list of overdue documents

• Writing off of bad debts

• Providing services for validating the single and total order limit for a customer

List of Activities