Importance of Credit Control
The process of credit control is one of the most important ones in the context of the decision making process of a company. In the modern financial world this process is deemed to be important with regard to the economic well-being of a business entity. The process of credit control is also crucial for the lenders as well as their business prospects.
Aspects and Steps of Credit Control
One of the most important aspects of a credit control process is to clearly define the conditions that would bind the credit agreement. This is supposed to be done by the lender. For example there should be clear mention in the credit agreement of the fines the debtors might need to pay in case they get late with their payments.
Often the lenders are required to get in touch with the borrowers at a certain point of time after having received the payment to provide confirmation. In case the debtor has not paid the payment at the right time the creditor waits for a certain time before making a further notification to the same.
The notifications made in such cases depends on the particular debtor and range from a phone call to a letter. In these cases too, the creditor again provides a new time limit. If in such occasions the payments are not made at the newly extended time period the lender is advised to take stern action.
In such cases any action taken by the lender signifies the fact that even if he is not in control of the payment he still retains some control over the entire situation.
Last Updated on : 9th July 2013