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Home: >> Technical Center >> Business Service >> Credit Management >>
How shall I setup our credit management function?

There are three options for you to set up your credit management function. You may choose to set up this function in either Finance Department, Sales Department or a separate Credit Management Department. There are pros and cons for each option.

No.

Department

Advantages

Disadvantages

 

1

 

Finance Department

 

Easy to obtain and analyze accounts receivable data from accounting system

 

a)        Finance people tend to be conservative resulting in customer dissatisfaction

b)        Can not handle relevant legal issues

2

 

Sales Department

 

Easy to obtain customer information and cost relating to coordination with finance department can be much saved

 

Short of internal control since the credit authority and credit implementation are in the same department.

3

 

A separate Credit Management Department

 

Good internal control

 

Highly demanding for finance and business knowledge and interpersonal skills

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