Credit Control Policy

Purpose

This policy establishes the requirements for payment terms with Logitel PTY LTD customers, as well as the monitoring and maintenance of these terms.

Scope

This policy applies to all sales made within the Australia.

Policy

Logitel PTY LTD will extend credit to customers if they meet its threshold for the granting of credit. Maximum basic credit that can be granted is AUS $1000 with no security interest. The maximum credit limit can be increased on a per customer basis with the approval of the credit manager. In the event that a customer’s ability to repay is disputed, then a corporate, bank or personal guarantee may be required. All terms are net 30 days, with no exceptions.

Credit applications will be reviewed by the finance department to determine their credit worthiness, and the amount of that credit. The credit level may be reduced in the event of:

  • a low credit score, or
  • being formed within the past two years

Each customer will have their repayment history periodically reviewed to determine whether existing credit levels are appropriate or need revision. A review may also take place if business conditions warrant an expansion or contraction of credit levels.

Responsibility

The credit manager is authorised to extend credit to customers, and to communicate with them regarding their credit status. Other members of the credit manager’s team are also able to communicate with customers regarding their payment responsibilities.

Invoicing

All invoices should follow the standard template from Logitel PTY LTD accounting software package. Invoices should contain all necessary information for the customer to pay promptly.

Collections

A standardised collection communication schedule should be undertaken in order to encourage the client to pay on time. This should involve:

ContactWhen
Reminder Email/SMS/Letter3 days overdue
Call7 days overdue
Email/SMS14 days overdue
Call/SMS17 days overdue
Email/SMS/Letter30 days overdue
Call/ Barring services31 days overdue
Email/Letter/SMS Barring Services60 days overdue

In the event that an invoice reaches 31 days overdue, then that customer should be put on a stop until the outstanding invoice is paid. After 60 days, a third-party collection agency should be tasked with recovering the monies owed.

Payment method

The preferred method of payment is by BPay and bank transfer. Payment in ANZ bank, credit card, cash, in the Post office, but will be charged fee for transaction and cheques is accepted.

Terms & conditions

This policy is designed to be applied in conjunction with Logitel PTY LTD general terms & conditions of sale.

Evaluation

This policy should be revised every 12 months, ideally within the first quarter of the financial year.