There are three options for you to set up your credit management function. You may choose to set up this function in either Finance Department, Sales Department or a separate Credit Management Department. There are pros and cons for each option.
| No. | Department | Advantages | Disadvantages |
|
1 |
Finance Department |
Easy to obtain and analyze accounts receivable data from accounting system |
a) Finance people tend to be conservative resulting in customer dissatisfaction b) Can not handle relevant legal issues |
| 2 |
Sales Department |
Easy to obtain customer information and cost relating to coordination with finance department can be much saved |
Short of internal control since the credit authority and credit implementation are in the same department. |
| 3 |
A separate Credit Management Department |
Good internal control |
Highly demanding for finance and business knowledge and interpersonal skills |
