This checklist ensures that all necessary steps are followed for approving credit applications to minimize financial risk and ensure proper documentation.
Collect the completed credit application form from the prospective client.
Check the accuracy of the client's information provided in the application, including contact details and business structure.
Perform a credit check using a reliable credit reporting agency to assess the client's creditworthiness.
Analyze the client's financial statements for the last two years to understand their financial health.
Evaluate the client's payment history with previous vendors to ascertain reliability.
Based on the findings from the credit check and financial analysis, establish an appropriate credit limit for the client.
Submit the credit application and supporting documentation to management for final approval.
Inform the client of the credit approval or denial decision and provide any necessary next steps.
Ensure that all documentation related to the credit application and approval process is stored in the client's file for future reference.