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Client Credit Policy

Client Credit Policy Template for Australia

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Key Requirements PROMPT example:

Client Credit Policy

"I need a Client Credit Policy for my wholesale manufacturing business that operates across Australia, with specific focus on B2B transactions and credit limits up to AUD 500,000, to be implemented by March 2025."

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Document background
The Client Credit Policy serves as the foundational document for managing credit relationships and associated risks within organizations operating in Australia. This policy is essential for businesses that extend credit terms to their customers and must comply with Australian regulatory requirements, including the National Consumer Credit Protection Act 2009, Privacy Act 1988, and relevant ASIC regulations. The document provides comprehensive guidance on credit assessment, approval processes, monitoring procedures, and risk management frameworks. It is designed to ensure consistent decision-making in credit matters while maintaining regulatory compliance and protecting the organization's financial interests. The Client Credit Policy should be regularly reviewed and updated to reflect changes in regulatory requirements, market conditions, and organizational risk appetite.
Suggested Sections

1. Purpose and Scope: Defines the objective of the policy and its application scope within the organization

2. Policy Statement: High-level statement of the organization's approach to client credit management

3. Roles and Responsibilities: Defines key stakeholders and their responsibilities in credit management

4. Credit Assessment Criteria: Core criteria for evaluating client creditworthiness

5. Credit Limits and Terms: Standard credit limits and payment terms for different client categories

6. Documentation Requirements: Required documentation for credit applications and ongoing monitoring

7. Credit Approval Process: Step-by-step process for credit application assessment and approval

8. Credit Monitoring and Review: Procedures for ongoing monitoring of credit accounts and periodic reviews

9. Collections and Recovery: Procedures for managing overdue accounts and debt recovery

10. Risk Management: Framework for identifying, assessing, and managing credit risks

11. Compliance Requirements: Key regulatory requirements and compliance procedures

12. Policy Review and Updates: Frequency and process for reviewing and updating the policy

Optional Sections

1. Industry-Specific Credit Criteria: Additional credit assessment criteria specific to particular industries or sectors

2. International Credit Management: Specific procedures for managing international client credit, including foreign exchange considerations

3. Credit Insurance: Guidelines for use of credit insurance and related procedures

4. Special Credit Arrangements: Procedures for managing exceptional credit circumstances or VIP clients

5. Credit Scoring System: Detailed explanation of internal credit scoring methodology if used

6. Digital Payment Systems: Procedures for managing credit through digital payment platforms

7. Group Company Credit Management: Special provisions for managing credit for group companies or affiliated entities

Suggested Schedules

1. Credit Application Form: Standard form for credit applications

2. Credit Assessment Checklist: Detailed checklist for credit assessment process

3. Authority Limits Matrix: Table showing credit approval authority limits by position

4. Standard Credit Terms: Template of standard credit terms and conditions

5. Collection procedures: Detailed procedures for different stages of collections

6. Required Documentation Checklist: List of required documents for different types of credit applications

7. Credit Risk Grade Matrix: Detailed criteria for different credit risk grades

8. Regulatory Compliance Checklist: Checklist of key regulatory requirements and compliance steps

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Acceptable Credit Risk
Approved Credit Limit
Authority Matrix
Bad Debt
Credit Application
Credit Assessment
Credit Check
Credit Exposure
Credit Rating
Credit Reference
Credit Report
Credit Risk Grade
Credit Terms
Credit Review Date
Creditworthiness
Customer Due Diligence
Default Event
Delegated Authority
Direct Debit Authority
Events of Default
Financial Statements
Guarantee
Guarantor
Know Your Customer (KYC)
Material Adverse Change
Payment Terms
Personal Guarantee
Risk Assessment
Security
Trade Credit
Trade References
Credit History
Aging Report
Collection Process
Credit Hold
Credit Insurance
Credit Scoring
Delinquent Account
Outstanding Balance
Payment Default
Settlement Terms
Write-off
Relevant Industries

Financial Services

Banking

Retail

Wholesale

Manufacturing

Professional Services

Construction

Technology

Telecommunications

Healthcare

Education

Utilities

Business Services

Distribution

Import/Export

Relevant Teams

Finance

Risk Management

Credit

Collections

Sales

Compliance

Legal

Internal Audit

Treasury

Accounts Receivable

Commercial Operations

Relevant Roles

Chief Financial Officer

Credit Manager

Risk Manager

Financial Controller

Credit Analyst

Collections Manager

Accounts Receivable Manager

Finance Director

Commercial Manager

Sales Manager

Compliance Officer

Credit Administrator

Treasury Manager

Financial Analyst

Business Development Manager

Industries
National Consumer Credit Protection Act 2009 (Cth): Primary legislation governing consumer credit in Australia, including licensing requirements for credit providers and responsible lending obligations
Privacy Act 1988 (Cth): Regulates the handling of personal information, including credit reporting information and credit eligibility information
Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010): Provides consumer protections regarding unfair contract terms, misleading conduct, and other consumer rights in credit arrangements
Anti-Money Laundering and Counter-Terrorism Financing Act 2006: Sets requirements for customer identification and verification procedures in credit arrangements
Financial Sector (Collection of Data) Act 2001: Regulates the collection and reporting of financial data, including credit-related information
National Credit Code (Schedule 1 to the National Consumer Credit Protection Act): Detailed requirements for consumer credit contracts, including disclosure requirements and default procedures
Banking Act 1959: Relevant for credit policies involving banking institutions and their obligations regarding credit provision
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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