Credit sales policy using credit period

Refers to the payment time provided by enterprises to customers. If the enterprise allows customers to pay within 30 days after purchase, the credit period is 30 days. The length of credit period is closely related to sales revenue, accounts receivable and bad debt losses. The longer the credit period, the better the credit conditions the enterprise gives customers, which promotes the growth of the sales revenue of the enterprise. However, the cost of accounts receivable and bad debt losses also increases, so we must compare marginal revenue and marginal cost before deciding to extend or shorten the credit period.

A reasonable credit period should depend on its own production capacity and sales situation. For example, during the economic boom, the market demand is large, the competition in the same industry is not fierce, and the output is stable. At this time, shortening the credit period not only has no effect on the net profit rate of the enterprise, but also can reduce the cost, expense and bad debt loss of accounts receivable. On the contrary, in the economic depression, in order to stimulate sales, the credit period should be extended. Although the costs of accounts receivable and bad debt losses have increased, enterprises can only maintain normal operations by expanding sales.

The first step is to initially determine the number of days according to industry practices;

The second step is to adjust according to the enterprise experience and credit policy;

The third step is to make corrections according to the accounts receivable statistics report and DSO report.

Time-dependent payment terms

Weekly credit sales: Net7: 7 days after delivery; Net 10: 10 days after delivery;

Half-monthly talk about credit sales: 10, 25th;

Monthly statement: extended to the 7th day of the following month;

Bimonthly credit sales; 30-day, 60-day and 90-day credit sales.

Cash discounts should not be used frequently to stimulate payment, because cash discounts should usually be high enough to be attractive. At this time, the cost of the seller, taking "2/ 10N/30" as an example, is equivalent to the annual interest rate of 2×360÷(30- 10)=36%. Therefore, sometimes it is cheaper to put up with a 90-day delay than to offer a 2% discount.

Settlement rebate

One of the conditions for providing sales rebates to customers with sales exceeding a certain amount is to pay on time, otherwise customers will not get kickbacks.

pay by Installments

Major projects generally use installment payment, such as construction projects, integration projects, or the sale of expensive equipment.

When signing an agreement on the payment process, the seller should pay special attention to specifying the payment standard or time in the agreement. These standards should be easy to measure and define.

Quality assurance (retention money)

Statistics show that the default rate and bad debt rate of detained funds are very high. It is best for enterprises to avoid withholding money, or clearly stipulate the scope of guarantee to avoid extending the scope to the scope of payment.

Delivery control regulations

Customer orders exceeding the quota need to be approved (forced release); Delivery must be stopped after the credit period expires for a certain period of time; The finance department issues delivery instructions for payment to the account;

A letter informing the customer to stop delivery.

It is unwise to write a notice to suspend supply, and it should be put forward when necessary (for example, when receiving customer orders or urging customers to pay). The theme of the letter is negative, but the tone should be positive, conveying an image of positive cooperation to the other party-we are stocking, and once the other party makes up for the omission, we can deliver the goods. The credit terms and payment terms of each customer have been approved, and all customer information has been completely recorded:

Customers apply for credit by filling in the standard credit application form, and the company evaluates these applications one by one by using the credit authorization system and the credit limit and condition system, and then updates the customer information in the computer system. In addition, the company must keep the original credit application form and credit terms related to credit sales.

Cash flow and financial cost are within acceptable range.

The credit period of our business is about 55 days, from the time we get the order, including the necessary raw material procurement period (7 days), production period (1 1 day), billing period (2 days) and collection period (35 days). In order to provide sufficient funds for the credit business, the company needs to buy an average of 35 days of bank deposits to ensure that external financing is not used. The corporate bank loan interest rate is 4% higher than the basic interest rate (currently 6%), that is, 10%. The 55-day credit period MINUS the 30-day credit period leaves 25 days.

The customer has not exceeded the credit limit.

All credit customers have corresponding credit limits and payment terms, and there is no "standard" condition. If the customer fails to pay within the time limit (that is, more than 30 days from the invoice date), the company cannot provide any products or services to the customer without the authorization of the credit manager.

Checked the customer's payment ability and status in the past 6 months.

If the customer's payment ability has been verified in the past six months, even if the customer reaches the current maximum credit line, the company can still accept new orders from customers. When checking the payment ability and status of customers, the company needs bank transaction reference (the reference amount must reach at least its 2-month order limit) and credit report as evidence. All relevant information of the customer (company name, address, telephone/fax, contact person, bank and accountant, etc.). ) It must be confirmed that all modifications need to be updated in the system. Then, the credit authorization system must be used to approve the credit to the customer.

Payment status and targets meet acceptable standards. Whenever the account is overdue (after the 30-day credit period), the company will suffer losses in the following aspects:

Manage the preparation of overdue invoices and send reminders. Telephone/fax dunning payment for suppliers, overdraft bank deposits, overdue accounts collection and reporting.

The credit manager decides the payment target and workload of each credit controller this week every Monday morning, listens to the work report of the credit controller every Friday afternoon and submits this week's work report to the customer director. The credit manager evaluates the performance of the credit controller by checking the collection diary of the account he is responsible for. The contents of the diary account book shall include: debtor's name, account number, payment amount and original maturity date.

Payment posting

Every morning before 10, all remittance notices and related letters paid by customers must be submitted to the credit controller for customer confirmation, and the confirmed account will be immediately received. All unconfirmed payments should be paid to the "pending account" and a standard inquiry letter should be sent to the address in the annex.

Control of inquiry

All inquiries must be handled by the relevant credit controller first, and then the credit controller will record the feedback period, the name of the person handling the inquiry and the general situation of the inquiry.

If no reply is received within the specified time limit (no more than 7 days), the credit controller shall submit a memorandum to the person in charge of handling. The credit manager must check all the problems that have not been solved for more than 7 days, and if they cannot be solved immediately, they should report to the customer director.

Debt collection and bad debts

The credit manager is responsible for the early confirmation and handling of accounts receivable that need to be "recovered" (that is, it needs to be resolved through collection agencies or litigation). The credit manager has the right to approve the payment of the accumulated debt collection fee of no more than 00% of the outstanding balance of 65438+ (no more than $500), and the accumulated amount exceeding $500 must be approved by the customer director.

Write-off of bad debts

The credit manager is responsible for confirming the bad debts that should be written off as soon as possible.

Reporting level

The company has the right to sell on credit through the following reporting levels

Credit management report

At the end of each month, the credit manager must report to the account director. The contents of the report shall include:

A report on major issues concerning credit policies, processes, systems, employees (credit control, sales and administration) and management;

Summary of relevant months and monthly and annual analysis of all important issues, including all the following:

Amount of outstanding accounts, number and proportion of customers; The amount of accounts receivable overdue 1-30 days, the number and proportion of customers; The amount of accounts receivable overdue for 3 1-60 days, the number and proportion of customers; The amount, quantity and proportion of accounts receivable customers overdue for 6 1-90 days; The amount of accounts receivable overdue for more than 90 days, the number and proportion of customers; The amount, number and proportion of accounts receivable being settled through debt collection agencies or legal procedures; Amount to be paid (broken down by inquiry type, sales area/personnel and products/services), number and proportion of customers.