In basic, credit control seeks to extend credit to a customer to make it simpler for them to buy an excellent or service. The policy of credit management clarifies the aims of the company and set best practices that should be followed by the complete organization.
- So, if the customer transacts with company codes that are beneath the identical credit control area, the limit is set for all the company codes combined collectively.
- Generally these sort of practices are dependent on the sort and complexity of the credit actions that are taken by the banks.
- Centralized credit management – Multiple company codes are clubbed underneath the identical credit management area.
- If the currencies of those company codes are totally different from that of the credit control area, the receivables are transformed to the credit management space forex to verify with the credit restrict set.
- Due to this credit threat is