Page 67 - DBP5043
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LEVEL OF CREDIT SALES
Total credit sales are dependent on several factors, including:
i. The quality of the product
ii. Discount offered
iii. Effective promotion
iv. Credit policy either tight or loose
CREDIT POLICY
In the management of AR, the most important thing is CREDIT
POLICY. Credit policy is a policy that covers all aspects related to
the following elements:
1) Credit
Long or short period of time granted by the firm to customers to
settle debt.
2) Credit Standards:
Refers to the strength of the financial position of the customer
before they are eligible to receive a credit offer.
a) Character:
Referring to the honesty and trustworthy clients in meeting
the obligations that have been made. Through credit sales,
the company seems to lend to customers, so customers
need to pay within the prescribed time.
