Written Credit Policy

Credit policies should be put in writing. The advantages of having a written credit policy manual include:

It can be used as a training tool.
It can be a reference guide.
When policies are written and everyone is trained to follow them, employees can be required explain deviations from established policies.
A written credit policy manual makes it easier to discipline employees who violate established policies.
Written policies help ensure consistency and therefore they reduce the potential for errors.
It helps transitions when key employees leave.
It can describe how and when exceptions to policies can be made.
It can and should describe credit granting authority in various positions within the credit department.
It can and should describe both how specific tasks are to be performed, and why they are performed.

Source: Michael Dennis, author of "Credit and Collection Handbook" available at the NACM Bookstore.