Last time we talked about how credit policies are like a plant grown from a seed. They need regular review and attention just like the plants in your garden to really bloom.

 A credit policy is simply a consistent guideline to follow when decisioning accounts, reviewing accounts, collecting and setting terms.

 Opening accounts is just the first step. Here are a couple of key items to consider in reviewing  accounts:

 How many of your approved accounts are paying you late?

• What is their average days beyond terms?
• How much credit have they been extended?
• What attributes of these late paying accounts can predict future payment behavior?

 I recently worked with a client to create an automated credit policy that consistently reviews accounts based on predictive credit attributes, public records and exception rules using the batch account review decisioning tools within BusinessIQ. The credit team now feels like they are proactively managing their accounts instead of just reacting to them.

 A solid credit policy not only focuses on opening accounts, but also on regular account review which can help you reduce your overall risk.