Sales create real value for a company when it can collect the amounts due on the agreed terms, and expanding credit sales without appropriate controls may increase accounting revenue while liquidity declines and overdue debts rise.
Reorganising credit begins with reviewing customer acceptance, verifying customer details and the authority of their representatives and setting suitable credit limits, payment periods and guarantees, supported by contracts, orders, delivery records, invoices and balance confirmations.
It is important to organise the relationship between sales, finance and the legal specialist so that responsibility for granting credit is clear, exceptions are documented, early signs of delay are identified and the causes of disputes are reviewed before debt accumulates.
The collection stage requires files to be classified according to the age of the debt, the quality of the documents and the prospects for resolution, followed by choosing the appropriate route for communication, settlement or legal action.
The importance of this structure lies in improving liquidity, reducing sales that are difficult to collect, preserving viable customer relationships and building stronger documentation if a dispute arises, making credit and collections management part of sound business decision-making and the protection of company funds.
