[Your business name] credit policy
This policy applies to every trade account. If a situation isn't covered here, ask [who can change limits] before you extend credit.
1. Who can have an account
Businesses only, not private customers. They must have traded for at least 6 months, return a signed application form, and give two trade references that we have checked.
2. Starting limit
New accounts start at [starting limit] for the first 3 months. After that we review the limit against how they've paid.
3. Payment terms
Our terms are [your payment terms]. Statements go out on the first working day of each month, showing every unpaid invoice and how to pay.
4. When an account is late
| Days overdue | What we do |
|---|---|
| 7 days | Send a friendly reminder with the statement. |
| 14 days | Send a second reminder. New sales on account need a manager's OK. |
| 30 days | Put the account on hold. The customer can still buy with cash or card. Send the final reminder. |
| 60 days | Phone call from the owner. Agree a payment plan or start formal recovery. |
5. Over the limit
A sale that would take the account over its limit only goes through if the customer pays the difference there and then. Staff don't raise limits at the counter.
6. Reviews
We review every account every 6 months. Good payers can have their limit raised; slow payers have it lowered or their account closed.
7. Who can change limits and terms
[Who can change limits] only. Every change is recorded with the date and the reason.