CREDIT POLICY RELATES TO WHICH DIMENSIONS AND DECISIONS.

[sunandaC]

CREDIT POLICY RELATES TO WHICH DIMENSIONS AND DECISIONS.

 CREDIT STANDARD:- Liberal credit standard pushes up the sales. It implies larger investment in AR, higher cost of collection and higher incidence of bad debts. Stiff credits standards have the opposite affect.

 CREDIT PERIOD: Longer period of credit increases sales and investment in AR and higher incidence of bad debts. Shorter period of credit has opposite effect.

 CASH DISCOUNT: Companies generally offer cash discount to customers in order to induce them to pay promptly. Liberalized cash discount enhances sales and reduces the average collection period.

 COLLECTION EFFORT/COLLECTION PROGRAM:Monitoring the sate of receivables
Telegraphic/telephone advice to customers around the due date
Threat of legal action in case of overdue accounts
Legal action in case of customers overdue

 

[rosemarry2]

CREDIT POLICY RELATES TO WHICH DIMENSIONS AND DECISIONS.

 CREDIT STANDARD:- Liberal credit standard pushes up the sales. It implies larger investment in AR, higher cost of collection and higher incidence of bad debts. Stiff credits standards have the opposite affect.

 CREDIT PERIOD: Longer period of credit increases sales and investment in AR and higher incidence of bad debts. Shorter period of credit has opposite effect.

 CASH DISCOUNT: Companies generally offer cash discount to customers in order to induce them to pay promptly. Liberalized cash discount enhances sales and reduces the average collection period.

 COLLECTION EFFORT/COLLECTION PROGRAM:Monitoring the sate of receivables
Telegraphic/telephone advice to customers around the due date
Threat of legal action in case of overdue accounts
Legal action in case of customers overdue

Hey Friend,

Here I am sharing Factors Influencing Managerial Decisions in Determining Forms of Business Financing, so please download and check it.