Credit management is the process of ensuring that a company’s credit policies and procedures are effective in minimizing the risk of financial loss due to non-payment by customers. It involves the assessment of creditworthiness of potential customers, setting credit limits, monitoring credit exposure, and taking appropriate actions to collect outstanding debts. Effective credit management requires a thorough understanding of the company’s financial position, market conditions, and customer behavior. It also involves the use of data analytics and technology to automate credit decision-making processes, improve cash flow, and reduce bad debt. A well-designed credit management system can help a company maintain a healthy cash flow, improve customer relationships, and minimize financial risks.
