Good credit management can cut costs, boost income and free up cash. The key to good credit management is to decide what your credit policy will be and then stick to it.
Your credit policy should not be too tight or too loose. If it is too tight, the company will lose sales because customers will not want to buy from you. On the other hand, if credit policy is too loose, the company will have difficulty collecting its money, or worse yet, have excessive bad debt expenses.
Customers who do not pay their bills on time are costing you money.