Credit Control & Credit Management Course

This page contains our free online credit course. It will teach you the basics of credit control and credit management.

The Course Covers:

The basics of credit control and credit management
Fundamental credit and debt terminology
Becoming efficient in credit and debt management
Deep credit control insights and sales ledger tips

Course Modules:

To start the online course, scroll down

This course is FREE, and no registration is required. It is perfect for beginners!

Our Online Course for Credit Control & Management

Part 1: Credit Control Basics

Module overview:

Course Outline
Course Aim
What is credit control?
Why offer credit?

What is credit control?

Definition: Credit control is the strategy used by a business to offer and manage customer debt, i.e. supervising the sales ledger. It is the term used to denote the policies, procedures, processes, and strategies employed by a company, business, or other entity to manage the credit it offers to its customers. Credit Management and Credit Control are interchangeable terms and often mean the same thing.

Not all businesses deal with an instant exchange of cash for their goods or services (cash sales). Instead, goods and services are often provided on credit (credit sales), meaning customers are invoiced for goods and services and pay later.

Why offer credit to customers?

There are several benefits to offering credit to customers. Offering credit can:

Attract a more extensive clientele
Increase sales
Strengthen customer relations
Improve business logistics
Help a business be competitive

Part 2: Approving Credit

Module overview:

Credit applications
Trade references
Credit checks
Credit limits

Credit Applications

Prospective credit customers complete a credit application.

Credit applications help a business evaluate whether a client should be offered credit or not, the amount of credit offered, and potential risks.

Credit applications are helpful for several reasons other reasons:

They provide a business with the direct contact details of their prospective client.
They provide references that are checked to ensure the prospective client has been financially trustworthy and responsible.
The information on the application allows a business to perform a credit check.
The application is a document that can be useful if legal proceedings are ever initiated.

A business customer completes a credit application. The application asks for the following details:

Customer name and address
Customer contact details
Trade references
Customer signature and date

You can download an example credit application form below (Word and PDF):

Credit Application Template

Credit Application Template PDF

Credit Limits

Definition: A credit limit is the maximum amount of debt (credit) a business offers a client. Once the limit is reached, the customer cannot purchase further goods or services on credit. This is called putting an account on hold or stop. Buying on credit is possible only when sufficient credit is available again through payment.

After a credit application has been completed, reviewed, checked, and approved, a credit limit should be agreed upon for the customer's credit account.

Credit limits are set based on the following:

The recommendation of credit check software
The expected turnover from the customer
How much risk a business is willing to take, i.e. how much credit they are willing to offer.

Part 3: Credit Control Procedures & Policies

Module overview:

Credit policies
Credit procedures
Various tips and advice

Credit Policies & Procedures

A company should have several well-planned credit control policies and procedures to ensure credit is provided and managed efficiently.

These should include:

All customers complete and submit credit applications.
All customers receiving an agreed credit limit
A monthly review of customer account balances and credit limits
A monthly review of outstanding and overdue invoices
Regularly raising and sending sales invoices.
Regularly chasing customer debt through email, post, and phone.
Rules, policies and procedures for pursuing legal action against a customer who hasn't stuck within their payment terms