All 22 Credit Control questions
More in Credit Control
What is a credit limit and how is it set? What is a credit application and why is it used? What is the difference between credit control and collections? What are common credit terms and what do they mean? What is the purpose of a credit check before accepting a new customer? How do you assess a customer's creditworthiness? What is a credit hold and when is it applied? How do credit terms influence sales and cash flow? What is the order-to-cash cycle and where does credit control fit? How is credit exposure monitored on an ongoing basis?
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Accounts Payable & Receivable › Credit Control

What is credit control?

Beginner

Answer

Credit control is managing the risk of extending credit to customers so sales convert to cash with minimal bad debt. It covers assessing creditworthiness, setting credit limits and terms, monitoring exposure, and enforcing limits and holds. Good credit control balances winning sales with protecting cash flow.
Real-world example Before a new customer is offered 30-day terms, credit control reviews their credit report and sets a prudent limit.

Common follow-ups: How does credit control balance sales and risk? | What are its main activities?

Collections & Bad Debts Vendor Management Credit Control
All 22 Credit Control questions