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Credit Limit Table for Risk Assessment |
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Credit Limit and Conditions Table
The following table is a non-specific example. Most companies end up using the 'feel good' factor: this is OK, but when opening a new account or having a cash customer move over to credit, you must use a system to control your immediate financial deficit of funds (credit period allowed) and future funding capability (sales force exuberance with lines of credit).
Use with:
See table below for details:
| CATEGORIES | A = LOW RISK | B = AVERAGE | C = HIGH RISK | CREDIT LIMIT Figures: Published Accounts | 15% Net Worth 30% Working Capital | 10% Net Worth 20% Working Capital | 5% Net Worth 10% Working Capital | MAXIMUM 1ST ORDER | As Above | The Lower of the Above or (say) £15k | The Lower of the Above or (say) £7.5k | DELIVERIES & CUSTOMER SERVICE | Top Priority | Priority over High Risk | Priority after Low and High Risk | STOP LIST | No Stops - Immediately Resolve Problems | When (say) 35 Days Overdue | When (say) 14 Days Overdue | IF 'ON STOP' AND SERVICE/GOODS WANTED BY PAYMENT OF CHEQUE | No Delays | Refer to Credit Manager | Clear Funds - 10 Working Days | CUSTOMER PURCHASING AUTHORITY | Customer's Purchasing Department | As Approved Credit Application Authority | Managing Director Only | CREDIT REFERENCE CHECK | Annual | Bi-Annual: If Always Within Credit Limit | Minimum: Quarterly | MINIMUM COMPANY AUTHORITY FOR ANY LIMIT AND/OR CATEGORY NOT LISTED ABOVE | Your Credit Supervisor | Your Credit Manager | Your Credit Manager and/or Finance Director if (say) over £2.5k |
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Credit Limit Table for Risk Assessment 
