Credit Policy

A credit policy is a set of guidelines that determine how credit is extended to customers, including creditworthiness checks, payment terms, and limits. A strong credit policy helps businesses reduce the risk of bad debt by ensuring that credit is only extended to customers who are financially reliable.

Businesses can automate credit policy management by integrating it with AR systems, which can assess a customer’s credit risk in real time. AI-powered systems can analyze customer behavior, payment history, and financial stability to make informed decisions about extending credit.

By enforcing credit policies, businesses can protect themselves from overextending credit and minimize financial risk. Automated credit policies allow businesses to respond to changing customer risk profiles without manual intervention. A well-defined credit policy ensures that businesses maintain profitability and manage risk effectively.