What is credit control?

, also known as loan management, is a loan control of the term used to describe the process of assessing the level of risk associated with potential customers and appropriately assigning credit authorizations. This means that two goals must be achieved with credit control. Sales revenue must be increased by approval of customers who represent little credit risk and encourage them to use this credit line. At the same time, the loan management process also seeks to identify potential customers who represent a significant amount of risk, and either store a lower credit limit on their accounts or completely reject credit authorities.

In effective use, the loan control helps maintain the overall risk of the expected creditor to a reasonable extent. This results in preventing great stress for business in terms of its current debt load. A balanced approach to the task will be placed by the company so that although several of the balances on their account is held by customers with a higher risk, wThe coda caused by the bottom line of the company is kept at a minimum. The company remains viable and is able to provide goods and services to other clients without worrying that it will not be able to fulfill its obligations.

For many companies, the loan control process is assigned to a specific department in the overall operating structure. Assessment of the struggle for the benefit of a potential client is usually the task of a member or group in the overall accounting team, but may also be a function of division or risk management department. Smaller companies are more likely to combine the task of qualifying potential clients for credit permission in the general accounting function, while larger corporations can operate a separate loan administration department. In both scenarios, the decisions made by Cotý Nrol will be in accordance with the development and introduction of the loan control policies and the introduction of owners and managers.

depending on the nature of business canThere is a certain scattering in how these loan control policies are written and what criteria the customer must meet to ensure credit authority. In fact, some businesses focus on consumers who are higher credit risks, especially those who have undergone a period of financial reversal and show signs of overcoming these past obstacles. Here, the Company may decide to extend limited credit authorities together with a slightly higher interest rate from any balances transmitted from one billing period to the next. Over time, as the customer responsibly manages a credit account, the company may decide to increase the loan line while submitting positive feedback to various credit agencies.