Credit management

What is credit management?

Credit management is the process of managing credit and managing a company’s accounts receivable portfolio. It includes all activities related to setting credit limits for customers, checking creditworthiness, managing payment terms, collecting outstanding accounts, and minimising credit risks.

The goal of credit management is to ensure that companies maintain a healthy cash flow and reduce the likelihood of debts and financial losses. Credit management can be implemented through internal processes or with the help of external service providers, such as collection agencies and factoring companies. The use of automated systems and software for credit management is becoming increasingly popular to improve the efficiency and accuracy of credit management.