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- Bankruptcy and Bankruptcy Code
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- Risk Analysis
- Understanding Accounts Receivable Costs
- Accounts Receivable Forecasting
- Informing Customers of their Credit Limits
- Authorization for Bank to Release Credit Information
- Authorizing Release of Credit Information
- Bank Loans and Bank Credit
- Expediting Bank Reference Requests
- Understanding Banking Relationships
- Bounced Checks; Collecting on Bounced Checks, NSF Checks
- Business Credit; Trade Credit; Open Account Credit Terms
- The Five Cs of Credit Analysis
- Check Acceptance
- Check Kiting
- Classification of Risk; Customer Risk Score
- COD Terms; Slow Pay; High Risk; Risk Mitigation;
- Code of Ethics
- Confidentiality Agreement
- Consumer Credit Granting
- Commercial Credit Application; Necessary Components
- Credit Approval Process
- Credit Associations
- Credit Decision-Making
- Offering Open Account Terms; Credit Extension
- Customer Credit File; Credit File
- Credit Granting Authority
- Credit History and Strategy
- Credit Insurance; Trade Credit Insurance; Export Credit Insurance
- Credit Line or Credit Limit
- Credit Policy Checklist
- Credit References
- Credit Reporting Agencies
- Credit Risk Environment
- Credit Risk Management
- Credit Role/Strategy
- Credit Decision Making: Is it Art or Science?
- Customer Purchase Orders, Errors on POs and their Impact on Collections
- Customer Retention
- Grace Periods and Cash Discounts
- Direct and Indirect Credit Investigations
- Unearned Discounts; Unearned Cash Discounts; Cash Discounts
- Enterprise Resource Planning
- Ethics for the Credit Manager
- Evaluating Financial Health
- Exchange of Credit Information
- Extended Dating Terms
- Credit File Documentation
- Fraud Signs and Prevention
- History of Credit
- Cargo Insurance
- Insurance Brokers and Credit Insurance
- Internet as a Source of Credit Information
- Late Charges
- Minimum First Order Without Credit Investigation
- New Account Checklist
- Non-Disclosure Agreement
- Open Account Sales; Open Account Terms; Extension of Credit on Open Account Terms
- Order Approval; Order Hold; Credit Reviews; Pending Order Review
- Order Controls / Order Approval
- Pro Forma Invoices
- Requesting Financial Information from Customers
- Restrictive Endorsements
- Returned Checks
- Return Merchandise Authorizations
- Root Cause Analysis of Past Due Balances
- Safeguarding Accounts
- Security Agreements; Secured Debts
- Seller's Invoice
- Terms and Conditions
- Terms of Sale
- Terms of Sale: Examples
- Types of Credit: Consumer Credit; Bank Credit; Commercial Credit; B2B; Business to Business
- Written Credit Policy Manual
- Handling Post Audit Claims More Effectively; Post Audit Claims
- Do's and Don'ts of Business to Business Debt Collection, Debt Collection Practices
- Bad Debt Reserves
- Advantages and Disadvantages of Purchasing Credit Insurance
- A Letter of Introduction
- Addressing Chronic Slow Pay Customers
- More about Cash Forecasting
- Streamlining Order Processing
- Collection Practices
- Financial Analysis
- Financing Methods
- International Credit
- Laws and Regulations
- Payment Methods
- Performance Measures
- Security Instruments
- Career Management, and Job Change
- Credit Website Tools
- Upcoming Educational Events
- Credit and Collections Tools and Tips
- Tips on Creating Better Emails
- Generating Effective Credit Correspondence
- Exporting
- Accounting
New Account Checklist
1. Was the credit application and credit agreement completed without modifications? ___
2. Did an officer of the corporation or the owner of the company sign it? ___
3. Was the personal guaranty signed? ___
4. Did the applicant provide at least three trade references? ___
5. Did they provide a bank reference including the bank name, address, phone number, account number, and name of the account officer? ___
6. Did the applicant authorize its bank to release information? ___
7. Are the names of each of the owners or officers listed? ___
8. If the applicant claims to be tax exempt, was the resale certificate completed and signed? ___
9. Did the applicant indicate the credit limit and terms the company wants or expects? ___
10. Did the applicant provide financial statements if requested or required to do so? ___
Welcome Letter/New Account Package
Many companies have a large number of new customers placing orders. It is desirable to turn around requests for open account terms as quickly as possible. One of the tools used to accomplish this is the new account credit package. The credit package may be mailed or faxed to the customer by the sales department, or by customer service, or the credit department. Ideally, this will be done even before the first order is received. A credit package generally includes the following:
1. Welcome letter (explaining general company practices as well as special items, such as the terms of sale),
2. The seller's credit application form, along with instructions on completing the application,
3. An explanation of the seller's terms and conditions of sale,
4. Authorization for the applicant's bank to release credit information. (This release may be included in the credit application itself but ideally will be a separate document sent to the customer and requiring the signature of an officer of that company),
5. A sales tax exemption certificate (if applicable).
© 2010 by Michael C. Dennis. All Rights Reserved. Michael is the author of "Credit and Collection Handbook."