Credit Limit
A credit limit is the maximum amount of credit a business is willing to extend to a customer based on their creditworthiness. Setting a credit limit is essential for managing risk and preventing overexposure to non-payment.
In AR management, credit limits help businesses control the amount of credit extended, ensuring that they don’t take on more risk than they can manage. Automating credit limit assessments using AI helps businesses make real-time, data-driven decisions about extending credit. AI-powered systems continuously monitor customer payment behavior and adjust credit limits as necessary, reducing manual effort.
By optimizing credit limit management, businesses can prevent bad debt and maintain healthier cash flow. This automation ensures that credit limits are updated automatically and consistently across the customer base.