All 22 Credit Control questions
More in Credit Control
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? How does a credit policy document support consistent decisions? What external data sources inform credit decisions? How should credit be handled for export/international customers? How do deposits and prepayments reduce credit risk? How do you build or use a credit scoring model? What forms of security or risk mitigation can support extending credit?
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Accounts Payable & Receivable › Credit Control

How should credit limits be reviewed and adjusted over time?

Intermediate

Answer

Review limits periodically and on triggers: sustained good payment history may justify increases; late payments, limit breaches, or external downgrades warrant decreases or holds. A regular review cycle plus event-driven reviews keeps limits aligned with current risk and the customer's genuine trading need.
Real-world example After a year of on-time payments and growing orders, a reliable customer's limit is raised; a downgraded one's is cut.

Common follow-ups: What triggers a limit decrease? | Why review limits on a cycle, not just at onboarding?

Collections & Bad Debts Aging Analysis Credit Control
All 22 Credit Control questions