Increasing Credit Limits

Often established customers will require an order that exceeds their credit limit. When this happens a credit investigation should take place by following your company's written credit and collections procedure manual.

It is best to analyze customers' credit lines on a regular basis and to anticipate future credit line requirements based on historical data. By looking at the customers' current credit limit and comparing it with historical purchasing trends, a credit decision can be made before the customers' orders. This will reduce the sales to cash cycle time and avoid delays in fulfilling customer requirements.

The credit limit increase considerations should include:

• Historical Data (payment habits, NSF Problems, etc...)
• Current Economic Conditions
• Current Financial Data Analysis
• Profit Margin
• Strength of the credit and collection department

Having a written credit collection policy that defines credit limit extensions, cash discounts and credit limit reviews can decrease the time of the sales to cash process. For help creating a credit and collection policy contact us.

Aguirre, Aikman + Brown has definitely been a great help in collecting some of our difficult debts. There are so many collection agencies available whose level of service cannot match that of AAB's. They have great finesse, and have handled our accounts with professionalism and patience.

Penny Cassell
Dodson International

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