In credit management both creditor and debtor can include because from creditor, we buy good on credit or get loan. From debtor, we have to take money because we sell goods to him on credit. So, effective management on credit will be helpful to optimize the working capital. Following are 10 credit management tips will be helpful to control both.
1. Only that amount of credit we can give or take whose record, we have. So, record immediately, when we buy or sell goods on credit. It will be helpful to track the credit amount of debtors and creditors.
2. Make online calender through Google calender and use mobile alert for paying and receiving date of credit amount. With this, you can make your habit to get credit amount on time and also to pay credit amount on time to your creditor.
3. If you have large scale business on credit basis, then you can make special department for credit management. In this department, you have to appoint experienced managers who can pay or receive on time.
4. Try to save money from any penalty due to delay of payment.
5. To reduce the stress on working capital by making provision for doubtful debt account and provision for discount on creditor account.
6. Never deal with bad creditor and debtors.
7. Compare the cost of cash deal and credit deal If cash deal has better result for increasing liquidity and profitability, then try to reduce amount of credit.
8. Make good family relation with creditors and debtors, because credit management' all concepts are connected with human being. So, If you make your place in the heart of human being, your credit means your cash which is never lost. But faith is must.
9. Calculate the debtor turnover ratio and creditor turnover ratio. With these data, you can find average collection period and average payment period. Make balance both figure by your fast decision power.
10. Make your credit history report. On this report, try to find which credit, you did not pay and which credit, you did not get. Try to find its opportunity cost. Try to reduce it.
1. Only that amount of credit we can give or take whose record, we have. So, record immediately, when we buy or sell goods on credit. It will be helpful to track the credit amount of debtors and creditors.
2. Make online calender through Google calender and use mobile alert for paying and receiving date of credit amount. With this, you can make your habit to get credit amount on time and also to pay credit amount on time to your creditor.
3. If you have large scale business on credit basis, then you can make special department for credit management. In this department, you have to appoint experienced managers who can pay or receive on time.
4. Try to save money from any penalty due to delay of payment.
5. To reduce the stress on working capital by making provision for doubtful debt account and provision for discount on creditor account.
6. Never deal with bad creditor and debtors.
7. Compare the cost of cash deal and credit deal If cash deal has better result for increasing liquidity and profitability, then try to reduce amount of credit.
8. Make good family relation with creditors and debtors, because credit management' all concepts are connected with human being. So, If you make your place in the heart of human being, your credit means your cash which is never lost. But faith is must.
9. Calculate the debtor turnover ratio and creditor turnover ratio. With these data, you can find average collection period and average payment period. Make balance both figure by your fast decision power.
10. Make your credit history report. On this report, try to find which credit, you did not pay and which credit, you did not get. Try to find its opportunity cost. Try to reduce it.
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