What are the purpose of credit controls

[sap]

 Standardize the best credit control and accounts receivable practice among regions
 Set up Accounting Policies, Procedures, Forms, Priority Instruction, handover list, FAQ, Workflow and KPI for Credit and Accounts Receivable section
 Communicate with other sections to support accounting workflow and KPI for Accounts Receivable section such as quotation update, contract renewal, claim handling
 Communicate with IT department to generate necessary information for billing requirements, billing accuracy performance, payment term decisions and the smooth processing of Credit control
 Proper Accounts Receivable cash forecast to support cashflow planning which is the key for the smooth running of the company
 Proper credit control, payment term and credit limit, to support company goals, growth, merger and acquisition, expansion in emerging market, cashflow improvement and bad debt reduction

[felix]

• No Credit is granted to new customers, customers without company or business registration , existing customer without track record of on time payment, overseas company, customer with annual turnover less than HKD50K and customer in the bad debt list
• Payment terms and Credit limit should be granted basing on the past payment performance, regular collateral, profit margin and volumn discount generated by department head for credit limit <HKD50,000 or payment term<30 days
• Existing Customers with Receivable Balance above HKD10K per month are subject to a credit evaluation report with a credit recommendation and an approval by Customer Service-Assistant German Manager before credit is granted.
• Credit application for existing customers to be renewed on a quarterly basis.
• Finance should update the overdue outstanding daily, covering proper cut off of billing and daily posting of bank receipt and credit note and starting and ending dates.
• Finance staff must ensure that Credit Limits, Payment Terms, expiry dates, approval date are set up in Accounts Receivable system
• Collection team (sales and customer service) should access the information of outstanding receivable through Accounts Receivable system before applying and approving credit limit