credit control


Also found in: Dictionary, Wikipedia.

credit control

  1. the control exercised by a firm over its TRADE DEBTORS to ensure that customers pay their debts on time and to minimize the risk of BAD DEBTS. Credit control involves: assessing the creditworthiness of new and established customers to determine borrowing limits and terms; encouraging prompt payment by offering cash discounts and monitoring and recording payments due; the recovering of bad debts. Effective credit control minimizes the funds which a firm has tied up in debtors, so improving profitability and LIQUIDITY. See FACTORING, DEBTORS RATIO, WORKING CAPITAL RATIO.
  2. the regulation of borrowing from the COMMERCIAL BANKS, FINANCE HOUSES, etc. by the monetary authorities in order to exercise control over the level of spending in the economy. See MONETARY POLICY.
Full browser ?