If you are dealing with a new customer who wants to establish a line of credit then it is vital that you begin the credit management process at the earliest possible date. Ask for the basic information that you will need in order to assess whether the risk you are taking in providing them with credit is commercially viable.
At Account opening stage the business has three objectives:
1. To establish the correct identity of the customer.
2. To confirm that customer's ability to pay.
3. To agree Trading Terms.
These objectives are not difficult to achieve. A simple Credit Account Application Form can be used to obtain information, and to set out, on the reverse, the supplier's Terms of Trading. By signing the completed Form, the customer provides the information and agrees the Terms.