Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit Policy
For many small and medium companies trade credit availability is a factor which determines their existence. Financial meaning of trade credit increases with freedom of its granting or taking. Trade credit is the most convenient way of financing activity, that’s why stipulating terms and conditions o...
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| Format: | Article |
| Language: | English |
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University of Economics and Human Sciences in Warsaw
2009-03-01
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| Series: | Contemporary Economics |
| Online Access: | http://ce.vizja.pl/en/download-pdf/id/98 |
| _version_ | 1797642533238472704 |
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| author | Anna Wodyńska |
| author_facet | Anna Wodyńska |
| author_sort | Anna Wodyńska |
| collection | DOAJ |
| description | For many small and medium companies trade credit availability is a factor which determines their existence. Financial meaning of trade credit increases with freedom of its granting or taking. Trade credit is the most convenient way of financing activity, that’s why stipulating terms and conditions of its granting to borrowers is a significant element of credit policy. The policy adopted by a company should indicate directions and sales barriers so that the firm can maintain and improve its market position. In order to evaluate customer’s creditworthiness, to specify repayment period, credit amount, rate of interest and repayment schedule (installments) it is indispensable to establish an appropriate system. The key to success in granting a trade credit is selection of appropriate business partners. The system of customers verification should give an answer to the question whether the company with which we do business or we intend to do so in the future is creditworthy and the decision about allowing a trade credit should be a result of well thought out credit policy. The author of present article indicates basic methods and tools of contractor creditworthiness evaluation, and she also proposed a payer’s creditworthiness evaluation sheet, which can be applied to build such a system. |
| first_indexed | 2024-03-11T14:01:38Z |
| format | Article |
| id | doaj.art-c5cca96230094e389c3933c2b4967ddc |
| institution | Directory Open Access Journal |
| issn | 2084-0845 |
| language | English |
| last_indexed | 2024-03-11T14:01:38Z |
| publishDate | 2009-03-01 |
| publisher | University of Economics and Human Sciences in Warsaw |
| record_format | Article |
| series | Contemporary Economics |
| spelling | doaj.art-c5cca96230094e389c3933c2b4967ddc2023-11-02T04:17:08ZengUniversity of Economics and Human Sciences in WarsawContemporary Economics2084-08452009-03-01311124Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit PolicyAnna WodyńskaFor many small and medium companies trade credit availability is a factor which determines their existence. Financial meaning of trade credit increases with freedom of its granting or taking. Trade credit is the most convenient way of financing activity, that’s why stipulating terms and conditions of its granting to borrowers is a significant element of credit policy. The policy adopted by a company should indicate directions and sales barriers so that the firm can maintain and improve its market position. In order to evaluate customer’s creditworthiness, to specify repayment period, credit amount, rate of interest and repayment schedule (installments) it is indispensable to establish an appropriate system. The key to success in granting a trade credit is selection of appropriate business partners. The system of customers verification should give an answer to the question whether the company with which we do business or we intend to do so in the future is creditworthy and the decision about allowing a trade credit should be a result of well thought out credit policy. The author of present article indicates basic methods and tools of contractor creditworthiness evaluation, and she also proposed a payer’s creditworthiness evaluation sheet, which can be applied to build such a system.http://ce.vizja.pl/en/download-pdf/id/98 |
| spellingShingle | Anna Wodyńska Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit Policy Contemporary Economics |
| title | Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit Policy |
| title_full | Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit Policy |
| title_fullStr | Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit Policy |
| title_full_unstemmed | Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit Policy |
| title_short | Evaluation of Customer’s Creditworthiness as the Instrument of Corporate Trade Credit Policy |
| title_sort | evaluation of customer s creditworthiness as the instrument of corporate trade credit policy |
| url | http://ce.vizja.pl/en/download-pdf/id/98 |
| work_keys_str_mv | AT annawodynska evaluationofcustomerscreditworthinessastheinstrumentofcorporatetradecreditpolicy |