Assessing Credit Status

Credit Control Why Grant Credit? Advantages: Disadvantages:Increased customer sales Cost of irrecoverable debts, goods not paid forAttractive marketing aspect Interest costs to company Role of credit control: To minimise the interest costs & irrecoverable debts costs to the company. 2 main stages in the credit control function: 1. Ordering of goods 2. Collection of money £ Ordering 1. CUSTOMER PLACES ORDER2. CUSTOMER'S CREDIT STATUS ESTABLISHED3. CUSTOMER OFFERED CREDIT4. GOODS DESPATCHED5. INVOICE DESPATCHED Collection of money £ 1. Customer receives invoice2. Statement sent to customer3. Reminder letter4. Phone call to customer5. Cash received