Pro sports should follow these questioners to determine each Buyer’s creditworthiness. The following questioners shall serve as credit procedures once completed and signed and accepted by the Company and shall be attached to and will form a part of the policy. Please feel free to attach additional pages if necessary to explain specific aspects of the company’s credit control and collection procedures.
NAME OF BUYER:
1. Credit evaluation/ Administration
a. Have you completed Buyer profile? Yes No If no, please provide reasons____________________________________________________
b. For a new buyer, what is minimum information required to assess the creditworthiness of the Buyer? Do you use: i. Credit agency reports Yes No If yes, give names of agencies used _______________________________________
The minimum credit agency rating required is_______________________________
ii. Trade references
If yes, gives names of companies referred: __________________________________
iii. Bank reports Yes No
iv. Audited Financial Statements Yes No v. Other sources: ________________________________________________________
c. For existing customer, what is the minimum information required to review the credit worthiness of the Buyer? ______________________________________________________
i. How often are Buyer files updated? _______________________________________
ii. How often is credit limits reviewed? _______________________________________
iii. Are credit limits recorded in writing in the Buyer file?_________________________
iv. What written credit approval documentation must appear in each Buyer file________
d. What general guideline do you use in evaluating a Buyer’s financial information to determine creditworthiness? (For example, rules regarding net worth to size of credit limit, minimum current or debt worth ratios, etc.)________________________________________________
e. Are regular personal visits made to the Buyer? Yes No
If yes, who make such visits? ___________________________________________________ Are visit reports produced? Yes No
f. What minimum information must be received before granting/extending credit in the
following circumstances:
If No To Increase a If There is a Change
Financial Credit Line to in Payment Terms in Statements an Existing Favor of a Buyer: are Available: Buyer:
g. How are high risk Buyer identified, and how often are they reviewed? __________________
2. Term of payment. a. i. For new customer, how do you determine payment terms? _____________________
ii. What type of payment terms are accepted for the first time? ____________________
iii. What type of payment terms are requested by new customers? __________________
b. iv. For existing customer, how do you determine to change existing payment terms? v. What type of payment terms are changed into?_______________________________
vi. What are the feedbacks from existing customers regarding changes?
c. How are payments terms establish for below case?
State normal terms of sale (Bulk sale) ____________________________________________ Special terms of sale (Sample, Additional) ________________________________________ Terms of payments are shown: (i) On invoice: Yes No (ii) On statement Yes No
3. Credit monitoring a. Is the Buyer system manual or computerized? ______________________________________ b. Before each shipment is released, how does the credit department make sure the buyer still meets the minimum of credit approval criteria? _____________________________________
c. Account receivable are checked against Credit limits:
i. When order are received Yes No
ii. When order are ready for shipment Yes No
d. An aging analysis: i. When order are received Yes No ii. When orders are ready for shipment Yes No e. How often are reports of accounts receivable generated and reviewed, and who reviews these reports? ____________________________________________________________________
4. Collection practices a. Which of the following procedures are used for overdue accounts?
Reminder by telephone Yes No If yes, how many days after due date is contact made? ____________________________________
Reminder(s) in Writing Yes No If yes, how many days after due date are letter(s) sent? _____________________________________ Stop Shipments Yes No If yes, how many days after due date are shipments stopped? __________________________________
Legal Action Yes No If yes, how many days after due date are solicitors/ Lawyers instructed? _________________________ Collection Agencies Yes No If yes, which collection agency is used and how many days beyond due date are they instructed? _______________________________________
b. i. What procedures does your company follow to absolutely stop shipmen after a Buyer is materially pas due?
ii. What written documentation evidencing the above will appear in the Buyer’s file?
iii. Would third parties be used locally or oversea to assist in collection efforts? (Sale representatives, local agents, local legal counsel, etc.)? If yes, please elaborate:
OTHER COMMENTS ON CREDIT COLLECTION PROCEDURES:
Please attach separately any written credit procedures you may have and or any additional comments you may wish to make regarding your credit procedures:
