The basic objective in making credit decisions is to find ways to approve an order with reasonable expectation that the customer will pay in accordance with established credit terms. A decision to grant or not to grant credit affects sales revenue, profit, production and procurement. If the customer is a good credit risk, the order may be approved as submitted. Otherwise, alternatives should be developed that are acceptable to the credit department and the sales department—and still meet the customer’s needs.
It is desirable to establish routine procedures for making most credit decisions. Credit approval, through the use of order limits or overall credit limits, can streamline the workload in the credit department. The goal is to approve credit with minimum delay, provide customers with prompt service and control administrative costs. If routine orders can be processed quickly and efficiently, the credit professional has additional time to devote to more demanding credit matters. This module discusses approaches and decision factors associated with making credit decisions with speed, accuracy and efficiency.
After viewing this module, students should understand:
Toni Drake brings over 30 years of oil and gas credit experience to the table. Toni holds a CCE, NACM’s most prestigious designation. After earning her CCE, she went on to attend and excel at NACM’s Graduate School of Credit and Financial Management to further her education in the field of credit. Toni continues to support the credit profession as a speaker and instructor at events like NACM’s annual Credit Congress.