Ministry of Agriculture

FGOU VPO Irkutsk State Agricultural Academy

Department of Finance and Analysis

Course work

Discipline: “Short-term financial policy”

On the topic: Enterprise credit policy"

using the example of Progress OJSC

Completed by: student

4 courses 2 groups economy. faculty

specialist. 080105.65

Trubitsina D.S.

Checked by: senior

teacher

Khusnudinova Elena

Anatolievna

Irkutsk, 2010

Introduction………………………………………………………………………………...…3

1. Validity, necessity and efficiency of using credit resources…………………………………………..…………………..5

1.1. Concept and structure of enterprise credit resources…………..……5

1.2. The essence of the enterprise’s costs for using credit resources………………………………………………………………………………….8

1.3. Justification of new approaches to the methodology for forecasting enterprise costs for using credit resources……………………………11

2. Analysis of the enterprise’s credit policy…………………………..………18

2.1. Concept and types of enterprise credit policy………………..…..18

2.2. Brief economic characteristics of Progress OJSC………………27

2.3. Analysis of the creditworthiness of Progress OJSC………………………...28

3. Ways to improve the credit policy of an enterprise…………...…40

Conclusion……………………………………………………………………………….…43

References……………………………………………………………44

Appendix…………………………………………………………………………………46

Introduction

Credit policy is a sonorous name that implies only an answer to three simple questions: to whom should a loan be provided, on what terms and how much? The main criterion for the effectiveness of credit policy is an increase in profitability in the core activities of the enterprise, either due to an increase in sales volumes, or due to the acceleration of the turnover of receivables. Finding the optimal point in commercial lending helps to use marginal analysis, the formal language of which strictly defines the desired balance in the volume and timing of deferred payment: liberalization of credit policy is appropriate until “until the additional benefits from an increase in sales volume are equal to the additional costs of the loan provided ".

Credit policy is intended to act as a kind of “cookbook”, limiting the madness of creative initiatives and personal calculations of individual individuals. The substantive basis of credit policy are the tools that guide sales structures when providing credit to suppliers and standards for granting credit that establish reasonable rules and restrictions.

The problem of this study has relevance in the modern world.

In order to ensure the competitiveness and attractiveness of the goods sold, in modern practice, the sale of goods on credit (with deferred payment) has been widely developed.

The purpose of this work is to consider the credit policy of the enterprise and develop measures to improve it.

To achieve this goal, it is necessary to solve the following tasks:

1. define the concept and structure of the enterprise’s credit resources;

2. describe the credit policy of the enterprise;

3. analyze measures to improve the enterprise’s credit policy.

The object of the study is Progress OJSC.

The subject of the study is the economic relations that arise between an enterprise and a bank regarding the provision of funds on credit.

The theoretical basis of the research is educational, scientific and methodological literature on the issues discussed in the work, analytical and information materials published in Russian periodicals. The information base for the study is statistical materials, the annual report for 2006-2007. Progress OJSC: balance sheet (form 1) and appendix to it (form 5), profit and loss statement (form 2), statement of changes in capital (form 3), main indicators (in agriculture - Form 6 of the APC).

To solve the problems, the following methods were used: statistical, abstract-logical, calculation-constructive and economic-mathematical.

1. Validity, necessity and efficiency of using credit resources

1.1. Concept and structure of enterprise credit resources

An enterprise's credit resources are part of its own capital and borrowed funds, directed in cash to active credit operations. Moreover, at the moment of using credit resources, they cease to be a resource for the enterprise, since they are no longer a reserve (loan repayment is a risky operation), but become invested credit resources.

Credit resources are divided into current credit resources and instant credit resources.

Calculation of the size of current credit resources, that is, resources that we can potentially still use for credit investments, is determined by the formula:

Current credit resources = Credit potential - Invested credit resources

Instant credit resources are the amount of resources that can be used to issue a loan at a particular point in time, determined by the formula:

Instant credit resources = Corr. balances. account + Current receipts - Current payments + Highly liquid resources (HLR) + excess cash in the cash register of the enterprise

The transition to market relations has seriously changed the structure of enterprise resources. The structure of the resources of an individual enterprise depends on the degree of its specialization or, conversely, universalization, the characteristics of its activities, and the state of the loan market.

The enterprise's own funds are formed from the authorized capital, funds and retained earnings.

The authorized capital is formed from contributions from enterprises, associations and organizations, consists of the nominal value of shares, and serves as the main security for the obligations of the enterprise.

The enterprise council independently approves the regulations on the procedure for the formation and use of its funds.

The reserve fund is intended to cover possible losses of the enterprise from its operations. The minimum size of the reserve fund is determined by the organization's charter, but cannot be less than 15% of the authorized capital. The source of formation of the reserve fund is deductions from profits directed to the fund in accordance with the law.

Enterprises also form special funds: “Depreciation of fixed assets”, “Depreciation of industrial equipment”, formed by depreciation; economic stimulus funds created from profits. World experience provides us with various methods for determining the amount of equity (capital) of an enterprise. The amount of capital calculated using one method or another will be different.

Unjustified overestimation of capital during calculation leads to false information about the successful state of the enterprise. Based on the overestimated amount of equity capital, it expands its active operations, exposing itself to increased risks. On the contrary, if the methodology for determining the amount of capital leads to its artificial understatement, then there will be a narrowing of the range of active operations and, consequently, a decrease in income.

It is known that the amount of capital adequacy of an enterprise is influenced by the volume, composition, quality and nature of active operations. The enterprise's focus on primarily carrying out operations associated with high risk requires a relatively large amount of equity capital, and, conversely, the predominance of loans with minimal risk in the enterprise's credit portfolio allows for a relative decrease in equity capital. The amount of equity capital required by an enterprise also depends on the specifics of its clients.

A measure of capital adequacy is the ratio of the enterprise's capital and asset portfolio. Over the course of several years, this indicator has undergone various changes in world practice. In the 80s, the issue of capital assessment methodology became the subject of debate in international financial organizations. The goal was to develop common capital adequacy criteria applicable to different community entities, regardless of their country affiliation. The main general indicator of capital adequacy is the risk assets ratio, which is determined by the formula:

The capital adequacy ratio of an enterprise is defined as the ratio of equity (capital) to the total volume of risk-weighted assets, minus the amount of reserves created for the depreciation of securities and for possible loan losses.

The capital (own funds) of an enterprise is defined as the amount:

Authorized capital of the enterprise;

Enterprise funds;

Retained earnings increased by:

Reserve for possible losses on loans of risk groups 1 and 2;

Accumulated coupon income received (paid) in advance;

Revaluation of funds in foreign currency

Revaluation of securities traded on the securities market;

reduced by:

Damages incurred;

Purchased own shares;

Excess of the authorized capital over its registered value;

Under-created mandatory reserve for depreciation of investments in securities;

Loans, guarantees and sureties provided in excess of limits;

Excess of costs for the acquisition of tangible assets over own sources;

Deferred expenses for accrued but unpaid interest;

Accounts receivable lasting more than 30 days;

Calculation with enterprise organizations for allocated funds.

Despite its small share, the company’s own capital performs several vital functions:

1. protective function - means the possibility of paying compensation to investors in the event of liquidation of the enterprise;

2. operational function - it is known that to start successful operation, an enterprise needs start-up capital, which is used to purchase buildings, equipment, and create financial reserves in case of unforeseen losses. Own capital is also used for these purposes;

3. regulatory function - associated with the interest of society in the successful operation of enterprises, as well as with laws and rules that allow government bodies to carry out regulatory and control functions.

1.2. The essence of the enterprise’s costs for using credit resources

Speaking about the essence of the enterprise’s costs for using credit resources, we are faced with the concept of the principle of payment. This is one of the principles of lending, which also include: the principle of repayment, urgency, differentiation, loan security and payment.

Refund means that the funds must be returned. The economic basis of repayment is the circulation of funds and their mandatory availability by the loan repayment deadline. Actually, credit as an economic category differs from other categories of commodity-money relations in that here the movement of money occurs on the terms of repayment. Repayment is a necessary feature of a loan.

The principle of urgency lending means that the loan must not only be repaid, but repaid within a strictly defined period. The urgency of lending is the necessary standard for achieving loan repayment. The established loan period is the maximum time the borrowed funds will remain with the borrower. If the term of use of the loan is violated, then the essence of the loan is distorted and it loses its true purpose. The practice of long-term violation of the principle of urgency in lending to enterprises and individual industries has a negative impact on the state of money circulation in the country.

It must be emphasized that in market economic conditions the principle of urgency acquires special significance. The normal provision of social reproduction with money depends on its observance.

Differentiation of lending means that commercial banks should not have the same approach to resolving the issue of issuing loans to clients applying for a loan. Banks strive to provide loans only to those clients who are able to repay them on time. For these purposes, the bank, based on creditworthiness indicators, determines the financial condition of the enterprise in order to be confident in the borrower’s ability to repay the loan within the period stipulated by the agreement.

Secured loans as a lending principle means that the borrower's property, valuables or real estate allow the lender to be confident that the loan will be repaid on time. This principle presupposes the actual collateral of loans provided to the borrower by various types of property or obligations of the parties. To ensure timely repayment of the loan, creditors under the agreement assign a pledge, surety or guarantee, as well as obligations in other forms accepted in practice.

When giving a loan against collateral, the lender checks to what extent the pledged property meets the requirements, in particular whether its liquidity is ensured. The liquidity of such assets (inventory, equipment, machinery, inventory, vehicles, etc.) refers to the ability of assets to quickly turn into money.

Loan repayment methods are important, so let’s look at them in more detail. The most common type of loan is a loan against inventories, since they are the most reliable collateral for a loan. The loan can be secured by goods and material assets. When issuing large loans, real estate is accepted as collateral. Loans secured by real estate are called mortgage loans. Land plots and agricultural buildings and premises are used as collateral for mortgage loans for enterprises of various forms of ownership.

Now it is necessary to take a more detailed look at the payment principle, since it most fully reflects the essence of the enterprise’s costs for using a loan. So, the principle of payment for a loan means that the borrowing company must pay the bank a certain fee for temporarily borrowing money from it. In practice, this principle is implemented through the mechanism of bank interest.

Bank interest is a fee received by the lender from the borrower for the use of borrowed funds. Payment of interest in a market economy is nothing more than the transfer of part of the profit received by the borrower to his lender. The natural requirement of the creditor for payment for borrowed funds is determined by the fact that he transfers part of his capital to the debtor, thus depriving himself of the opportunity to receive his own profit during the validity of the credit transaction. A loan at its final stage is a return of value, and interest is an increment to the loan. Loan interest, therefore, is a kind of loan price that guarantees the rational use of the loaned value and the preservation of the mass of credit resources. At the same time, the repayment of the loan should have a stimulating effect on the economic calculations of enterprises, encouraging them to increase their own resources and economically spend their own funds.

1.3. Justification of new approaches to forecasting techniques

expenses of the enterprise for using credit resources

There are several types of approaches to consider this problem. Among them there are both new and time-tested.

Financial coefficients for assessing the creditworthiness of commercial bank clients. In global and Russian banking practice, various financial ratios are used to assess the creditworthiness of a borrower. Their choice is determined by the characteristics of the bank’s clientele, possible causes of financial difficulties, and the bank’s credit policy. There are several categories of odds:

1. liquidity ratios;

2. efficiency or turnover ratios;

3. financial leverage ratios;

4. profitability ratios;

5. debt service ratios.

The creditworthiness indicators included in each of these groups can be very diverse.

The current ratio shows whether the borrower is in principle able to pay off its debt obligations.

The current ratio involves a comparison of current assets, i.e. funds available to the client in various forms with current liabilities, i.e. obligations with immediate repayment dates (loans, debt to suppliers, bills, budget, workers and employees.

Liquid assets represent that part of current liabilities that relatively quickly turns into cash. The purpose of the quick liquidity ratio is to predict the borrower's ability to quickly release funds from its turnover in cash to repay the bank's debt on time.

Efficiency (turnover) ratios complement the first group of ratios - liquidity indicators and allow us to make a more informed conclusion. Efficiency ratios are analyzed over time and also compared with those of competing firms and with industry averages.

Profitability ratios characterize the efficiency of using all capital, including its attracted part. The varieties of these coefficients are:

1. profitability ratios:

Net operating profit;

Net profit after interest and taxes;

2. profitability ratios - a comparison of three types of profitability ratios shows the degree of influence of interest and taxes on the profitability of the company;

3. Earnings per share ratios - debt service ratios (market ratios) show how much of the profit is absorbed by interest and fixed payments.

Debt service ratios show how much of earnings are used to repay interest or all fixed payments. These coefficients are of particular importance at high rates of inflation, when the amount of interest paid can be close to the client’s principal debt or even exceed it. The larger part of the profit is used to cover interest paid and other fixed payments, the less it remains to pay off debt obligations and cover risks, i.e. the worse the client's creditworthiness.

The listed financial ratios can be calculated on the basis of actual reporting data or forecast values ​​for the planned period. In a stable economy or relatively stable client situation, an assessment of the borrower's future creditworthiness may be based on actual performance in past periods. In foreign practice, such actual indicators are taken for at least three years. In this case, the basis for calculating creditworthiness ratios is the average for the year (quarter, half-year) balances of inventories, accounts receivable and payable, funds on hand and in bank accounts, the amount of share capital (authorized capital), equity capital, etc.

In conditions of an unstable economy (for example, a decline in production), high inflation rates, actual indicators for past periods cannot be the only basis for assessing the client’s ability to repay his obligations, including bank loans, in the future. In this case, either forecast data should be used to calculate these coefficients, or the considered method of assessing the creditworthiness of an enterprise (organization) will be supplemented by others. The latter includes an analysis of business risk at the time of issuing a loan and an assessment of management.

The described financial creditworthiness ratios are calculated on the basis of average balance sheet balances at reporting dates and do not always reflect the real state of affairs and are relatively easily distorted in reporting. Therefore, in world banking practice, a system of coefficients is also used, calculated on the basis of results. This account contains the reported turnover figures for the period. The initial turnover indicator is sales revenue. By excluding individual elements from it (material and labor costs, interest, taxes, depreciation, etc.), intermediate indicators are obtained and ultimately net profit for the period is obtained.

Net cash balance is the difference between the cash assets and liabilities of the balance sheet. Asset cash is the balance of money on hand and in bank accounts. Cash liability – short-term loans for current production activities. Therefore, the net cash balance shows the amount of the client’s own funds deposited in the cash register and in the account.

Cash flow analysis is also a way to assess the creditworthiness of a commercial bank client, and this indicator, in turn, is precisely a factor in determining the enterprise’s costs for using credit resources. This analysis is based on the use of actual indicators characterizing the client’s turnover of funds in the reporting period.

Cash flow analysis consists of comparing the outflow and inflow of funds from the borrower over a period usually corresponding to the term of the loan requested. When issuing a loan for a year, cash flow analysis is done on an annual basis, for a period of up to 90 days - on a quarterly basis, etc.

The elements of the inflow of funds for the period are:

1. profit received in a given period;

2. depreciation accrued for the period;

3. release of funds from:

Inventories;

Accounts receivable;

fixed assets;

Other assets;

4. increase in accounts payable;

5. growth of other liabilities;

6. increase in share capital;

7. issuance of new loans;

The elements of outflow of funds include:

1. payment of taxes, interest, dividends, fines and penalties;

2. additional investments in:

Accounts receivable;

Other assets;

Fixed assets;

3. reduction of accounts payable;

4. reduction of other liabilities;

5. outflow of share capital;

6. repayment of loans;

The difference between the inflow and outflow of funds determines the amount of total cash flow. To determine this influence, the balances of inventory items, debtors, creditors, etc. are compared. at the beginning and end of the period. An increase in the balance of inventories, debtors and other assets during the period means an outflow of funds and is shown in calculations with a “-” sign, and a decrease means an inflow of funds and is recorded with a “+” sign. An increase in creditors and other liabilities is considered as an inflow of funds ("+"), a decrease - as an outflow ("-").

There are features in determining the inflow and outflow of funds in connection with changes in fixed assets, not only the increase or decrease in the value of their balance for the period is taken into account, but also the results of the sale of part of the fixed assets during the period. The excess of the sales price over the balance sheet valuation is considered as an inflow of funds, and the opposite situation as an outflow of funds.

The cash flow analysis model is based on grouping the elements of inflow and outflow of funds into areas of enterprise management. The following blocks may correspond to these areas in the cash flow analysis (CAM) model:

1. enterprise profit management;

2. inventory and settlement management;

3. management of financial obligations;

4. tax and investment management;

5. management of the ratio of equity capital and loans.

To analyze cash flow, data is taken for at least three past years. If the client had a stable excess of inflows over outflows of funds, then this indicates his financial stability, as well as his creditworthiness. Fluctuations in the value of the total cash flow, as well as a short-term excess of outflows over inflows of funds indicate a lower rating of the client in terms of creditworthiness.

Analysis of cash flow allows us to draw a conclusion about the weak points of enterprise management. For example, the outflow of funds may be associated with inventory management, settlements (debtors and creditors), financial payments (taxes, interest, dividends). Identification of management weaknesses is used to develop lending conditions reflected in the loan agreement. To decide the feasibility and size of issuing a loan for a relatively long period, cash flow analysis is done not only on the basis of actual data for past periods, but also on the basis of forecast data for the planned period. New methods of cost forecasting also include business risk analysis as a way to assess a client's creditworthiness.

Business risk is the risk associated with the fact that the circulation of the borrower's funds may not be completed on time and with the expected effect. Business risk factors are various reasons leading to interruption or delay in the circulation of funds at certain stages. Business risk factors can be grouped according to the stages of the cycle.

So, all of the above methods of forecasting the costs of a company taking out a loan make it possible to fully determine the client’s creditworthiness, which in turn leads to stabilization not only of the loan issuance process itself, but also of the entire credit system as a whole.

2. Analysis of the enterprise’s credit policy

2.1. Concept and types of enterprise credit policy

Credit policy is a system of measures and rules aimed at implementing control over the implementation and use of loans provided by a company or bank. The credit policy of an enterprise, among other things, may include a system of rules for building relationships with customers, which also includes a debt collection procedure.

The credit policy may be written in a lengthy document containing detailed instructions or may be as short as one page.

Credit policy should include:

1. thoughtful work with the client: rules for segmenting types of customers and rules for working with each segment;

2. distribution within the company of work related to interaction with debtors;

3. the procedure for collecting debts internally;

4. description of situations in which the debt is transferred to a collection agency for collection;

5. description of situations in which the debtor is sued.

This system must be recorded on paper. It is clear that every enterprise and every person has some kind of internal sensations, focusing on which they decide whether they can lend to a given person or enterprise or not. The question is whether these sensations are only internal or whether they are written down and understood by all employees of the enterprise in the same way, whether there are clear instructions for each of the employees of the enterprise and for every possible situation.

The main goal of the enterprise is to achieve profit. Typically, profits increase as sales volume increases. One of the most effective ways to increase sales is to provide goods on credit. There are the following reasons for this:

1. it is possible to attract a buyer who does not have enough funds for an advance payment;

2. the buyer is able to buy more or more expensive goods.

When developing an enterprise's credit policy, it is necessary to take into account not only the terms of sales on credit, but also the internal structure of the enterprise's management. Enterprise management, as a rule, faces all sorts of problems here. Typically, the sales department or sales agent not only does not act together with the credit department, if the enterprise has one, but even distrusts it. This is due to the fact that the sales agent is primarily interested in selling goods and receiving commissions for this, as a rule, he only risks that the commission will not be paid to him. In case of non-payment, either the accountant or the sales department itself deals with the repayment of the debt. The function of an accountant is the accounting function of the enterprise, and the task of the sales department is to increase sales. Therefore, they are not only unable to formulate the credit policy of the enterprise and engage in debt collection, but they will probably do this without any desire, and sometimes even sabotage this work.

Within the framework of the enterprise’s credit policy, the following tasks are solved:

1. increasing sales volume by providing customers with more favorable conditions;

2. acceleration of turnover of receivables and payables;

3. minimizing lost benefits from the inability to use the amount of debt and losses from inflationary depreciation of the amount of debt;

4. minimizing financial risks associated with a possible shortage of funds due to late repayment of receivables, with the write-off of bad debts;

5. determining the circle of creditors, forms and volumes of borrowing, taking into account the characteristics of the production and financial cycles of the enterprise;

6. minimizing the cost of borrowed capital;

7. switching to alternative sources of borrowing as the need arises;

8. monitoring the timeliness of debt repayment and interest payments, choosing forms of debt restructuring if necessary;

9. maintaining a balance between current assets and current liabilities in amounts and terms.

The enterprise's credit policy consists of organically interconnected blocks: accounts receivable management and accounts payable management. When developing a credit policy, an enterprise must take into account the following factors:

1. the general state of the country’s economy, if the enterprise operates on the foreign market, then the state of the world economy and the main trends in its development;

2. competitive environment, the state of demand for products, conditions in commodity and financial markets;

3. development of the regulatory framework regarding the collection of receivables;

4. the existing practice of conducting trade operations at the enterprise, the presence of a well-developed contractual framework;

5. financial capabilities of the enterprise in terms of diversion of part of the working capital into accounts receivable.

The credit policy is adopted for a year, after which the goals and objectives, adopted standards, approaches and conditions for the enterprise are clarified.

The enterprise's credit policy answers four questions:

1. to whom should the loan be provided?

2. for how long?

3. in what sizes?

4. what are the sanctions for non-compliance with the conditions (client/manager)?

The goals of an enterprise's credit policy should be: increasing the efficiency of investing funds in accounts receivable, increasing sales volume (profit from sales) and return on investment.

In addition to formalizing the goals of managing receivables in the credit policy, it is necessary to define tasks, the solution of which will allow achieving target values ​​(for example, entering new markets, winning a larger share of the existing market, building a reputation, minimizing the cost of credit resources). Each formulated task must have a quantitative measurement and deadlines for completing the work.

When the company's goals, its strategy, market conditions and other significant factors change, the credit policy must be revised.

For the purposes of this provision, credit policy refers to the sale of goods to customers of an enterprise on credit, in the form of providing customers with installment plans or deferred payment under a contract for the supply of goods (commercial credit).

Providing a loan is not the central competitive advantage of an enterprise, that is, focusing the client’s attention on this and first of all declaring the possibility of providing a loan in negotiations when working with clients is prohibited. Therefore, during negotiations, you should always try to work with prepayment. If full prepayment is not possible, you should try to get a partial prepayment. And only in the case when the client makes convincing arguments for the need to provide him with a loan, and provided that this client is of interest to the enterprise (is a target), should one begin to discuss the loan terms offered by the enterprise.

The essential indicators of credit policy are:

1. determining the conditions for providing a trade loan;

2. calculation of the maximum period for providing a trade loan;

3. compilation of a “discount matrix” - a table containing discount options for goods shipped (services provided) depending on the terms of payment. That is, the price indicated in the price list is the price of the goods provided on credit for the maximum specified period.

When choosing the type of credit policy, the following main factors should be taken into account:

1. the general state of the economy, which determines the financial capabilities of buyers and their level of solvency;

2. the current situation on the commodity market, the state of demand for the organization’s products;

3. the potential ability of the enterprise to increase the volume of production while expanding the possibilities for its sale through the provision of credit;

4. legal conditions for ensuring the collection of receivables;

5. financial capabilities of the enterprise in terms of diversion of funds into accounts receivable.

The indicators that determine credit policy are the following four characteristics:

1) loan period - the period of time during which customers must pay for the purchased goods;

2) creditworthiness standards - the minimum financial stability that clients must have to obtain the possibility of deferred payment, and the size of permissible loan amounts provided to various categories of clients;

3) payment collection policy - determined by the degree of loyalty towards clients who delay payments, from the point of view of providing a loan again;

4) discounts provided for payment at an earlier date; these benefits include the discount amount and the period during which they can be availed.

There are three fundamental types of credit policy of an enterprise in relation to buyers of products - conservative, moderate and aggressive, which characterize the fundamental approaches to its implementation from the standpoint of the ratio of profitability levels and risk of the enterprise's credit activity.

The conservative type of credit policy of an enterprise is aimed at minimizing credit risk. Such minimization is considered a priority goal for its lending activities. The mechanism for implementing this type of policy is a significant reduction in the number of buyers of products on credit at the expense of high-risk groups; minimizing the terms of the loan and its size; tightening the conditions for granting credit and increasing its cost; use of strict procedures for repayment of receivables.

A moderate type of credit policy of an enterprise characterizes the conditions for its implementation in accordance with accepted commercial and financial practices and is focused on the average level of credit risk when selling products with deferred payment.

The aggressive (soft) type of credit policy of an enterprise sets the priority goal of credit policy to maximize additional profits by expanding the volume of product sales on credit, regardless of the high level of credit risk that accompanies these operations. The mechanism for implementing this type of policy is to extend credit to riskier groups of product buyers; increasing the loan period to the minimum acceptable size; Providing buyers with the possibility of extended credit..

To select the optimal credit policy, a company must weigh the potential benefits of increased sales against the cost of providing additional trade credit (credit checks, additional administrative costs, etc.) and the risk of possible non-payment.

Credit policy can be based on both formal and non-formal criteria:

1. Purchase and payment history of buyers. Payment history can be obtained through informal contacts with banks and other client partners;

2. The solvency of buyers can be assessed based on the credit history of the relationship between the buyers of the enterprise;

3. Current analysis and prospective assessment of the financial stability of buyers.

For this purpose, the same sources of information as indicated above can be used, as well as informal opinions of familiar professionals working in the client’s industry, recommendations of independent analysts, news and reports of specialized business information agencies.

Caution when choosing an enterprise's credit policy is due to the fact that doing business in the current conditions is associated with ongoing economic instability and numerous commercial risks. It is in such an environment that enterprises must make responsible decisions that affect not only their material interests, but also the interests of their partners. So the problem under consideration of choosing a credit policy in relation to product buyers is important for almost everyone involved in business.

The main economic unit in the economy of any state is an enterprise, which acts in a variety of organizational and legal forms: sole proprietorships, general partnerships, limited liability companies, joint-stock companies, etc. What they have in common is that, in accordance with current legislation, they are required to submit a certain set of information about their business activities to government agencies. And they bear financial and administrative responsibility for its accuracy. All other economic indicators, as a rule, are hidden by organizations under the pretext of commercial secrets, access to which is possible only operationally.

This leads to one of the important methodological conclusions: economic indicators of organizations’ activities are incomplete, and it is quite difficult to obtain them. Only joint stock companies provide fairly extensive information about themselves in their annual reports to shareholders. This has a significant impact on the formation of credit policy in relation to a specific buyer. Obviously, in conditions of a large number of non-payments, the less information about its commercial activities the buyer enterprise is willing to provide, the stricter the seller’s credit policy will be towards it.

Open information, with the appropriate application of economic analysis methods, can enable the selling enterprise to draw more accurate conclusions about the state of the production, sales and financial program of the organization that acts as the buyer.

In addition, the following main factors should be taken into account in the process of choosing a credit policy:

1. modern commercial and financial practices for carrying out trading operations;

2. the general state of the economy, which determines the financial capabilities of buyers and their level of solvency;

3. the current situation on the commodity market, the state of demand for the enterprise’s products;

4. the potential ability of the enterprise to increase the volume of production while expanding the possibilities for its sale through the provision of credit;

5. legal conditions for ensuring the collection of receivables;

6. financial capabilities of the enterprise in terms of diversion of funds into accounts receivable;

7. financial mentality of the owners and managers of the enterprise, their attitude to the level of acceptable risk in the process of carrying out business activities.

When determining the type of credit policy, enterprises should keep in mind that its rigid version negatively affects the growth of the volume of their operating activities and the formation of stable commercial ties. At the same time, a soft version of an enterprise’s credit policy can cause excessive diversion of financial resources, reduce the level of solvency of the enterprise, subsequently cause significant costs for debt collection, and ultimately reduce the profitability of working capital and capital employed.

2.2. Brief economic characteristics of Progress OJSC

Initially, the farm was organized in 1960 as a result of the merger of two collective farms “Progress” and “Leninsky Rabochiy” and was named “Kalandrashvili”. As a result of the reorganization, the Kalandrashvili collective farm was renamed into Progress OJSC.

In 2004, Progress OJSC sold its controlling stake to Maslozhirkombinat OJSC, and is currently the main shareholder.

JSC "Progress" is located in the southwestern part of the Bokhansky district. The central estate is located in the village. Olonki is 30 km away. district center r.p. Bohan, and 85 km. from the regional center of Irkutsk and 98 km. from the nearest railway station in Irkutsk.

The delivery points for main agricultural products are:

Grain s. Buret, Irkutsk, Bokhan village

Milk s. Olonki, Irkutsk

Meat Irkutsk

The farm is connected to these points by paved roads. The condition of the roads is satisfactory.

The farm has three branches - Olonki, Vorobyovka, Zakharovskaya, which are connected to the central estate by roads in satisfactory condition. All branches specialize in the production of agricultural products. Ancillary production facilities are located in the central estate - a hotel, a seasonal dining room, workshops, storage facilities, and garages. The farm has a two-level organizational structure.

The production capacity of the enterprise allows us to produce:

1. crop products – grains and legumes, barley, oats, rapeseed, other products;

2. livestock products – livestock and poultry (cattle), whole milk, meat and meat products;

The main activity of Progress OJSC is the production and sale of crop and livestock products. The most important, effective indicators for assessing the economic activity of any enterprise are profit, and if there is none, then cost recovery. The amount of profit received by an agricultural enterprise characterizes the efficiency of using production assets, land, labor, material and monetary resources.

2.3. Analysis of the creditworthiness of Progress OJSC

In the process of relationships between enterprises and the credit system, as well as with other enterprises, there is a constant need to analyze the borrower’s creditworthiness. Creditworthiness analysis is carried out both by banks issuing loans and by enterprises seeking to obtain them.

During the creditworthiness analysis, calculations are made to determine the liquidity of the enterprise's assets and the liquidity of its balance sheet.

The liquidity of assets is the reciprocal of the time required to convert them into money, i.e. The less time it takes to turn assets into money, the more liquid the assets are.

Balance sheet liquidity is expressed in the degree to which the enterprise's liabilities are covered by its assets, the period of transformation of which into money corresponds to the period of repayment of obligations. Balance sheet liquidity is achieved by establishing equality between the enterprise's liabilities and its assets. In this case, assets must be grouped according to the degree of their liquidity and the groups are arranged in descending order, and liabilities - according to their maturity dates and are arranged in increasing order of payment terms.

The assets of an enterprise, depending on the speed of converting them into money, are divided into four groups:

1. The most liquid assets A1 are cash and short-term financial investments;

2. Quickly realizable assets A2 – accounts receivable and other assets;

3. Slowly realizable assets A3 – inventories, except deferred expenses, plus long-term financial investments;

4. Hard-to-sell assets A4 – non-current assets without long-term financial investments.

The enterprise's liabilities (balance sheet liability items) are also divided into four groups and arranged according to the degree of urgency of their payment:

1. The most urgent obligations P1 – accounts payable;

2. Short-term liabilities P2 – short-term loans and borrowings and other short-term liabilities;

3. Long-term liabilities P3 – long-term loans and borrowings;

4. Constant liabilities P4 – capital and reserves plus lines 630-660 of the balance sheet.

To determine the liquidity of the balance sheet, it is necessary to compare the calculations made for groups of assets and groups of liabilities. The balance sheet is considered liquid with the following ratio of groups of assets and liabilities: A1>=P1; A2>=P2; A3>=P3; A4<=П4.

Let's analyze the relative performance of the enterprise. These include 5 groups of indicators:

1. liquidity ratios;

2. business activity ratios;

3. profitability ratios;

4. financial stability ratios;

5. coefficients of market valuation (activity) of the enterprise.

1. Liquidity ratios - determine the possibility of repaying current obligations within a certain period of time.

The total (current) liquidity ratio is calculated as the quotient of current assets divided by short-term liabilities and shows whether the enterprise has enough funds that can be used to pay off its short-term liabilities over a certain period.

According to generally accepted standards, it is believed that this coefficient should be in the range from 1 to 2-3. The lower limit is due to the fact that there must be at least enough current assets to pay off short-term obligations, otherwise the company will be at risk of bankruptcy. An excess of current assets over short-term liabilities by more than three times may indicate an irrational capital structure.

Ktl = Current assets / Current liabilities = line 290 f. No. 1/ page 690 f. No. 1

For 2006 Ktl = 34206 / 38027 = 0.89

For 2007 Ktl = 35383 / 66367 = 0.53

The quick liquidity ratio is a private indicator of the current liquidity ratio; it reveals the ratio of the most liquid part of current assets (cash, short-term financial investments and receivables) to short-term liabilities. According to international standards, the level of the coefficient should be above 1; in Russia, its optimal value is defined as 0.7-0.8.

Ksl = Cash, accounts receivable, short-term financial investments / Short-term liabilities = (line 260 + 240 + 250) / line 690.

For 2006 Ksl = 5 + 781 / 38027 = 0.02

For 2007 Ksl = 24 + 591 / 66367 = 0.01

In Russian conditions, the most reliable indicator of liquidity can be considered the absolute liquidity ratio, which is calculated as the quotient of cash divided by short-term liabilities. In Western practice, this coefficient is rarely calculated, but in Russia its optimal level is considered to be 0.2-0.25.

Cal = (Cash + Short-term financial investments) / Short-term liabilities = (p. 260 + p. 250) / p. 690

For 2006 Cal = 5 / 38027 = 0.0001

For 2007 Cal = 24 / 66367 = 0.0004

The net working capital indicator is calculated as the difference between the company's current assets and its short-term liabilities. Net working capital is necessary to maintain the financial strength of a business, since the excess of current assets over current liabilities means that the company not only can pay off its short-term obligations, but also has the financial resources to expand its activities in the future. A lack of net working capital can lead a company to bankruptcy, as it indicates its inability to repay short-term obligations in a timely manner. A significant excess of net working capital over the optimal need for it indicates inefficient use of resources.

NOL = current assets – short-term liabilities

For 2006 NER = 34206 – 38027 = -3821

For 2007 NER = 35383 – 66367 = -30984

2. Business activity ratios - characterize the efficiency of an enterprise’s use of its funds. This group includes various turnover indicators, since the turnover rate, i.e. transformation of funds into monetary form has a direct impact on the solvency of the enterprise.

The asset turnover ratio - the ratio of revenue from product sales to the entire balance sheet asset total - characterizes the efficiency of the company's use of all available resources, regardless of the sources of their attraction, i.e. shows how many times during a period the full cycle of production and circulation is completed, bringing the corresponding effect in the form of profit, or how many monetary units of sold products were brought by each monetary unit of assets.

Cob.ac. = revenue then sales / balance sheet currency

For 2006 = 23065 / 89581 = 0.26

For 2007 = 28916 / 117720 = 0.26

The accounts receivable turnover ratio measures how many times on average accounts receivable were converted into cash during the reporting period. The ratio is calculated by dividing revenue from product sales by the average annual value of net receivables. To compare the commercial lending conditions that an enterprise uses from other companies with the lending conditions that an enterprise provides to other companies, you can compare this indicator with the accounts payable turnover ratio.

Cob.d.z. = sales revenue / accounts receivable

For 2006 = 23065 / 781 = 29.53

For 2007 = 28916 / 591 = 48.93

The accounts payable turnover ratio is calculated by dividing the cost of goods sold by the average annual cost of accounts payable and shows how much turnover a company needs to pay its invoices. Receivables and payables turnover ratios can also be calculated in days. To do this, you need to divide the number of days in a year by the considered indicators. This will show how many days on average it takes to pay receivables or payables respectively.

Kob.k.z. = cost of goods sold / accounts payable

For 2006 = 23791 / 20432 = 1.16

For 2007 = 29855 / 20642 = 1.45

The inventory turnover ratio reflects the speed at which these inventories are sold. It is calculated as the quotient of the cost of goods sold divided by the average annual cost of inventories. To calculate the coefficient in days, you need to divide the number of days by the considered indicator. This way you can find out how many days it takes to sell (without payment) inventories. In general, the higher the inventory turnover rate, the less funds are tied up in this least liquid item of working capital, the more liquid the structure of working capital and the more stable the financial position of the enterprise, all other things being equal.

Cob. mpz. = cost of goods sold / cost of inventory

For 2006 = 23791 / 32416 = 0.73

For 2007 = 29855 / 32542 = 0.92

The duration of the operating cycle is an indicator by which one can determine how many days on average it takes to produce, sell and pay for an enterprise’s products, in other words, during what period the funds are tied up in inventories. This indicator is calculated as the sum of the inventory turnover period and the accounts receivable turnover period.

DOC = POZ + Sub.z.

POZ = inventories * 365 / revenue from product sales

For 2006 Poz = 32416 * 365 / 23065 = 513 days.

For 2007 Poz = 32542 * 365 / 28916 = 411 days.

Under.z. = accounts receivable * 365 / revenue from product sales

For 2006. Sub. = 781 * 365 / 23065 = 12 days.

For 2007. Sub. = 591* 365 / 28916 = 8 days.

For 2006, DOC = 513 + 12 = 525 days.

For 2007, DOC = 411 + 8 = 419 days.

The financial cycle begins from the moment suppliers are paid for these materials (repayment of accounts payable) and ends when money is received from customers for shipped products (repayment of accounts receivable). The financial cycle is the period during which a company loses its money.

Financial cycle = Operating cycle - Accounts payable turnover period

POk.z. = accounts payable * 365 / revenue from product sales

For 2006 POkz = 20432 * 365 / 23065 = 323 days.

For 2007 POkz = 20642 * 365 / 28916 = 261 days.

For 2006 FC = 525 – 323 = 202 days.

For 2007 FC = 419 – 261 = 158 days.

3. Profitability ratios - reflect the profitability of the company.

Profitability of sales is calculated as the ratio of net profit after tax to the volume of products sold. This indicator reflects how many monetary units of net profit each monetary unit of sold products brought.

Rototal. = net profit / revenue from product sales * 100%

For 2006. Total. = 2173 / 23065 * 100% = 9.42%

For 2007 Total. = 2516 / 28916 * 100% = 8.7%

The profitability ratio of all assets of an enterprise (return on assets) is calculated by dividing net profit by the average annual value of the enterprise's assets. It shows how many monetary units the company needed to obtain one monetary unit of profit, regardless of the source of raising these funds. This indicator is one of the most important indicators of the competitiveness of an enterprise. The level of competitiveness is determined by comparing the profitability of all assets of a given company with the industry average ratio.

Ren.ac. = (net profit / enterprise assets) * 100%

For 2006 Kren.ak. = 2173 / 89581 * 100% = 22.7%

For 2007 Kren.ak. = 2516 / 117720 * 100% = 2.13%

Return on equity allows you to determine the efficiency of using the capital invested by the owners and compare this indicator with the possible income from another investment of these funds. This ratio can be calculated by dividing net income (after taxes) by the average annual amount of equity. Return on equity shows how many monetary units of net profit earned each monetary unit invested by the company's owners.

Ren.sob.cap. = (net profit / equity) * 100%

For 2006 Ren.sob.cap. = 2173 / 51105 * 100% = 4.25%

For 2007 Ren.sob.cap. = 2516 / 50904 * 100% = 4.9%

4. Financial stability coefficients (solvency or capital structure) - characterize the structure of financial sources, and above all the capital structure. They reflect the company's ability to repay long-term debt.

The equity capital concentration ratio reflects the share of equity capital in the company's capital structure and, thus, the relationship between the interests of the owners of the enterprise and creditors. The value of this indicator, which characterizes a fairly stable financial position, all other things being equal, in the eyes of investors and creditors, is about 60%.

Kksk = equity capital / balance sheet currency

For 2006 Kksk = 51105 / 89581 = 0.57

For 2007 Kksk = 50904 / 117720 = 0.43

The debt capital concentration ratio reflects the share of debt capital in sources of financing. This ratio is the inverse of the ownership ratio.

Ккзк = borrowed capital / balance sheet currency

For 2006 Kkzk = 38027 / 89581 = 0.42

For 2007 Kkzk = 66367 / 117720 = 0.56

The financial dependence ratio characterizes the company's dependence on external loans and represents the ratio of debt capital to equity capital. The higher this ratio, the riskier the situation, which can lead to bankruptcy of the enterprise, and the higher the potential danger of the enterprise having a cash deficit. It is believed that this indicator in a market economy should not exceed one. High dependence on external loans can significantly worsen the company's position in the event of a slowdown in sales, since the company will not be able to reduce the cost of paying interest on borrowed capital, other things being equal, in proportion to the decrease in sales volume.

Kkfz = balance sheet currency / equity

For 2006 Kkfz = 89581 / 51105 = 1.75

For 2007 Kkfz = 117720 / 50904 = 2.31

Debt to equity ratio - the higher the ratio exceeds 1, the greater the enterprise's dependence on borrowed funds. The acceptable level is often determined by the operating conditions of each enterprise, primarily by the rate of turnover of working capital. Therefore, it is additionally necessary to determine the rate of turnover of inventories and receivables for the analyzed period. If accounts receivable turn over faster than working capital, which means a fairly high intensity of cash flow to the enterprise, i.e. the result is an increase in own funds. Therefore, with a high turnover of tangible working capital and an even higher turnover of accounts receivable, the ratio of equity and borrowed funds can far exceed 1.

Кс/з = debt capital / equity capital

For 2006 Ks/z = 38027 / 51105 = 0.74

For 2007 Ks/z = 66367 / 50904 = 1.3

5. Market valuation (activity) coefficients of the enterprise - characterize the value and profitability of the company's shares.

Earnings per share shows how much of the net profit comes from one common share outstanding.

The market price to earnings per share ratio reflects the relationship between a company and its shareholders by showing how many monetary units shareholders pay for one monetary unit of the company's net income. This indicator can be compared for different companies, which is especially important to do over time, assessing the long-term aspect of investing.

The book value of a share shows the value of the enterprise's net assets (equity capital), which is per one ordinary share in accordance with accounting and reporting data.

To determine stock returns, several indicators are calculated. Current yield refers to the dividends that the owner of the stock will receive. This ratio is called dividend yield or dividend rate and is the quotient of the dividend per share divided by the market value of one share.

The dividend payout ratio indicates how much of net profit is spent on dividend payments.

Table 1 - Relative indicators of Progress OJSC for 2006-2007.

index			2007 in% compared to 2006
Liquidity ratios
current ratio
quick ratio
absolute liquidity ratio
net working capital, rub.
Business activity ratios
asset turnover ratio
Debt turnover ratio ass
credit turnover ratio ass
inventory turnover ratio
duration of the operating cycle, days.
financial cycle, days
Profitability ratios
total profitability, %
return on assets, %
return on equity, %
Financial stability ratios
equity concentration ratio
debt concentration ratio
financial dependency ratio
gearing ratio

From the table data we can conclude that the current liquidity ratio in 2007 compared to 2006. less by 40.4%, the quick liquidity ratio is less by 50.0%, and the absolute liquidity ratio is more by 300.0%. The accounts receivable turnover ratio in 2007 compared to 2006 increased by 65.7%, accounts payable and inventories by 25.0% and 26.0%, respectively. The duration of the operating and financial cycles decreased by 106 and 44 days, respectively. Overall profitability decreased by 7.6% in 2007, return on assets also decreased by 90.6%, and return on equity increased by 15.3%. The concentration ratio of equity capital in 2007 compared to 2006 became less by 24.6%, and the concentration ratio of borrowed capital, the coefficient of financial dependence and the ratio of equity and borrowed capital increased by 33.3%, 32.0% and 75.7% respectively.

3. Ways to improve the enterprise’s credit policy

It is advisable to assess the financial condition of an enterprise in the context of balance sheet items that affect the enterprise's creditworthiness indicators.

If there is a tendency towards a deterioration in the creditworthiness of an enterprise, then it should make efforts to prevent a deterioration in its creditworthiness. Such measures should be:

– improving the organization of settlements with debtors and creditors in order to prevent accelerated growth of accounts payable over accounts receivable;

– reduction of expenses on fixed assets and increase in expenses for the formation of working capital;

– reduction in the amount of working capital in inventories and costs.

Thus, the implementation of these activities will help the company achieve higher financial performance, which will allow it to use bank loans more effectively in the future.

As the study showed, the reason for the low creditworthiness of an enterprise is the low level of return on sales, assets and equity. To increase profitability, it is necessary to find reserves for reducing the cost of work (services) of the enterprise by increasing the volume of their implementation and reducing the costs of their implementation.

So, to increase production profitability, an enterprise needs to:

– rationalize pricing policy;

– organize cost savings, including through more rational use of material resources (fuel, materials, energy);

– use the effect of production leverage;

– reduce the share of fixed costs for management personnel and the maintenance of real estate;

– constantly identify and produce in larger volumes the most popular and profitable types of products;

– in order to reduce costs and increase the efficiency of core activities, in some cases it is advisable to abandon some low-profit activities;

– with low product profitability, it is necessary to strive to accelerate the turnover of assets and its elements; in this regard, it may be advisable to increase the number of work shifts at the enterprise.

At the same time, asset productivity is largely determined by internal factors of the organization, such as management and investment policy, therefore, the enterprise should develop measures to improve the enterprise management system.

In addition, it is necessary to begin to provide services on a commercial basis that are not part of the main responsibilities of the enterprise. This could be, for example, internal plumbing work; repair services for residential premises of owners of apartment buildings: plastering and painting, glass, wallpaper, tiling and other works. Providing such services to the population can significantly increase the revenue of an enterprise and, accordingly, its profit from sales.

It should also be noted that in order to increase its own creditworthiness, the company must take care of its own image in business circles, namely, try to establish itself as a reliable partner who fulfills all its obligations in a timely manner. A positive credit history, participation in large projects, high quality of goods and services, high qualifications and stability of management, adaptability to new management methods and technologies, influence in business and financial circles - all this will help improve the image of the enterprise, and therefore strengthening its creditworthiness.

Conclusion

Based on the work done, the following conclusions can be drawn.

Credit policy is a system of measures and rules aimed at implementing control over the implementation and use of loans provided by a company or bank. An enterprise's credit policy may include a system of rules for building relationships with customers, which also includes a debt collection procedure.

Being at different stages of development, enterprises pursue different goals and adhere to different strategic lines. Three main behavioral models can be distinguished:

Expansion of the market niche;

Maintaining a market niche;

Maximize profit with minimal risk.

Without developing a credit policy and an appropriate enterprise structure, it is impossible to increase sales volumes while maintaining an acceptable level of non-payments.

To solve the key task of credit policy - improving the assessment of the creditworthiness of an enterprise, it is necessary:

1. Use an expanded set of financial ratios, since the use of a limited number of them reduces the quality of the analysis;

2. Analyze the dynamics of changes in the financial position of the enterprise over several reporting periods, and not according to the latest balance sheet;

3. To analyze creditworthiness, in addition to analysis based on financial ratios, use cash flow analysis of the enterprise.

Bibliography

1. Basovsky L.E. Financial management: Textbook - M.: INFRA-M, 2003. - 240 p. - (Series "Higher Education").

2. Brigham Y., Gapenski. Financial management: Complete course: In 2 volumes / Transl. from English edited by V.V. Kovaleva. St. Petersburg: Economic School, 1998 – 456 p.

3. Volodin A.A. Financial management (enterprise finance). – M.: INFRA-M, 2006. – 657 p.

4. Gavrilova A.N. Financial management: Textbook. allowance. – M.: Finance and Statistics, 2006. – 336 p.

5. Efimova O.V. How to analyze the financial position of an enterprise. - M.: "Intel-Sintez", 1994 - 186 p.

6. Short-term financial policy at an enterprise: textbook / S.A. Mitsek. - M.: KNORUS, 2007. - 248 p.

7. Likhacheva O.N., Shchurov S.A. Long-term and short-term financial policy. Tutorial. - Publishing house M.: University textbook. 2009. – 288 p.

8. Pavlova L.N. Financial management: Textbook for universities. - 2nd ed.,

reworked and additional - M.: UNITY-DANA, 2003. - 269 p.

9. Peshchanskaya I.V. Financial management: short-term financial policy. Textbook for universities. – M.: Exam, 2005. – 254 p.

11. Organization management: Textbook. / Ed. A.G. Porshneva, Z.P. Rumyantseva, N.A. Salomatina. - 2nd ed., revised. and additional - M.:INFRA-M, 1999.-669 p.

12. “Management Accounting and Finance”, No. 2, 2007

13. Financial management: theory and practice: textbook / ed. E.S. Stoyanova. - 6th ed. - M.: Perspective, 1998. - 656c.

14. Financial management: Textbook. allowance / Ed. E.I. Shokhina. – M.: ID FBK-PRESS, 2003. – 640 p.

15. Shcherbakov V.A. Short-term financial policy: textbook / V.A. Shcherbakov, E.A. Prikhodko. - 2nd ed., erased. - M.: KnoRus, 2007. - 272 p.

Every business knows that in order to remain competitive and commercially successful, it must generally provide commercial credit to its customers. The exception is the situation when the supplier has a strong position in the market and can dictate its payment terms.

On the contrary, if an enterprise has unused capacity and its products are easily replaceable on the market, then liberalization of payment conditions is more likely to be required to achieve the planned level of sales. Since the company makes significant investments as a result of providing credit to customers, it requires a certain credit policy that allows it to regulate the level of receivables.

An enterprise's credit policy is a set of principles that govern the provision of deferred payment to customers.

Sales on credit cause differences between accounting and real-monetary indicators of product sales. Until payment is made, the sales process in terms of cash flow is still ongoing, which leads to the emergence of receivables. Receivables must be financed until payment is due, but there is always the risk that the buyer will pay late or not pay at all.

Funds diverted from turnover into accounts receivable are considered as investments, which, like any other investments, should be aimed at increasing the value of the enterprise. When forming a credit policy, it is assumed: –

increase sales and profits, taking into account a certain level of risk; –

align the position of the enterprise in a competitive environment.

Credit policy plays an important role in ensuring the growth of an enterprise. When developing it, the goal is to increase sales volume to the extent that this contributes to making a profit.

Additional profits when liberalizing the terms of settlements with customers arise: –

from an increase in sales volume (revenue); –

from reducing unit costs (an increase in production volume helps to reduce the amount of fixed costs per unit of production).

However, by providing a deferred payment to the buyer, the company will incur costs associated with an increase in accounts receivable: –

costs associated with financing the emerging need for additional working capital; –

expenses for managing accounts receivable (personnel, machines, telephone, etc.) –

losses associated with non-payment of receivables.

Thus, the main criterion for the effectiveness of credit policy is the growth of income from the company’s core activities, either due to an increase in sales volumes (which will occur with the liberalization of lending), or by accelerating the turnover of receivables (which will be facilitated by a tightening of credit policy). Liberalization of credit policy is appropriate until the additional benefits from increasing sales volumes are equal to the additional costs of the loan provided.

To evaluate credit policy, the effect obtained from investing funds in receivables is determined. For these purposes, the amount of additional profit received from an increase in the volume of product sales through the provision of a loan is compared with the amount of costs for obtaining a loan and debt collection, costs of financing additional needs for working capital, as well as direct financial losses from non-repayment of debt by buyers. This effect is calculated using the following formula:

Edz = ?Pdz – ?TZdz – ?Zf – ?FPdz

Pdz is the additional profit of an enterprise received from an increase in the volume of product sales through the provision of a loan.

Pdz = ?Revenue * (1 – Share of Transaction Costs in Revenue);

TZdz is a change in the current costs of an enterprise associated with organizing customer lending and debt collection.

Determined based on the results of an analysis of retrospective information and include the salary of an accountant working with debtors, telephone costs, postal and legal costs, etc.;

Zf – change in the costs of financing the need for working capital associated with the diversion of funds from turnover into accounts receivable.

Zf = DZ * D * WACC,

where DZ is the amount of accounts receivable;

D – share of cost in revenue;

WACC is the weighted average cost of capital of the enterprise.

FPdz – change in the amount of direct financial losses from non-repayment of debt by buyers.

Along with the absolute amount of the effect, a relative indicator can also be determined - the efficiency ratio of investing funds in receivables:

where Edz is the amount of effect obtained from investing funds in accounts receivable for settlements with customers in a certain period;

– the average balance of accounts receivable for settlements with customers in a certain period.

The higher the values ​​of these indicators, the more effective the enterprise’s credit policy.

Example: An enterprise sold products in the reporting year in the amount of 20 million rubles. Accounts receivable turnover ratio 6. Marketers have established that removing restrictions on commercial loans on the creditworthiness of buyers will increase sales by 4 million rubles, but the turnover of accounts receivable will no longer be 60 days, but 120 days. The share of variable costs in revenue is 65%. The share of fixed costs is 10% of revenue. The company has underutilized capacity and can increase production without increasing fixed costs.

An increase in accounts receivable initiates additional costs for the enterprise associated with: -

increasing the volume of work with debtors (by 200 thousand rubles); -

increasing the receivables turnover period; -

an increase in losses from bad accounts receivable (the probability of non-repayment of the debt will increase from 5% to 10%), etc.

The cost of the enterprise's capital is 20%.

It is necessary to determine the effect of liberalizing credit policy.

1. Determine the average amount of accounts receivable in the reporting period:

20,000,000 rub. / 6 = 3,333,333 rub.

and in the forecast:

24,000,000 rub. / 3 = 8,000,000 rub. (3 – receivables turnover ratio, determined by dividing 360 (number of days in a year) by 120 (receivables turnover period).

2. Let’s calculate the amount of cost increase associated with financing receivables:

Zf0 = 3,333,333 rub. * 0.75 * 0.2 = 500,000 rub.

Zf1 = 8,000,000 rub. *0.733 * 0.2 = 1,172,800 rub.

The share of cost in revenue (0.733) is defined as the ratio of the sum of variable and fixed costs to revenue ((24000000*0.65+2000000) / 24000000).

Zf = 1,172,800 – 500,000 = 672,800 rub.

3. The increase in the amount of losses from bad receivables will be:

8,000,000 * 0.1 – 3,333,333 * 0.05 = 633,333.3 rub.

4. Determine the change in operating profit after easing credit conditions:

(24,000,000 – 20,000,000) * (1 – 0.65) = 1,400,000 rub.

5. The effect of easing the terms of the loan, calculated using the formula, will be:

1,400,000 – 672,800 – 633,333 – 200,000 = -106,133 rub.

Thus, liberalization of credit conditions is inappropriate.

Credit policy must answer three interrelated questions. Who is the loan available to? For how long will the loan be provided? What actions should be taken in relation to customers who do not comply with the terms of the loan?

(positive or negative depending on the positive or negative value of the financial leverage differential). Similarly, a decrease in the financial leverage ratio will lead to the opposite result, reducing its positive or negative effect to an even greater extent.

Thus, with a constant differential, the financial leverage ratio is the main generator of both the increase in the amount and level of profit on equity, and the financial risk of losing this profit. Similarly, with a constant financial leverage ratio, positive or negative dynamics of its differential generate both an increase in the amount and level of return on equity and the financial risk of its loss.

Knowledge of the mechanism of influence of financial leverage on the level of profitability of equity capital and the level of financial risk allows you to purposefully manage both the cost and capital structure of the organization.

Credit policy of the organization

Credit policy can be defined as a set of measures aimed at creating conditions for the effective placement of raised funds in loans in order to ensure stable growth of the lender’s profit.

Credit policy is a system of measures and rules aimed at implementing control over the implementation and use of loans provided by an organization or bank. The organization's credit policy includes a system of rules for building relationships with customers, which also includes the debt collection procedure.

The credit policy is adopted at the end of which the goals and objectives, adopted standards, approaches and conditions are clarified. The provisions of the credit policy can be reflected in a voluminous work containing detailed instructions, or occupy only one page. Much depends on the corporate culture of the organization.

But in any case, the credit policy should include:

- thoughtful work with the client: rules for segmenting types of customers and rules for working with each segment;

- distribution within the company of work on interaction with debtors

- internal debt collection procedure;

- a description of situations in which a debt is transferred to a collection agency for collection;

- a description of situations in which a debtor is sued.

The typical structure of this document includes:

1. Objectives of credit policy.

2. Type of credit policy.

3. Buyer evaluation standards.

4. Divisions involved in accounts receivable management.

5. Personnel actions.

investing funds in accounts receivable, increasing sales volume (profit from sales) and return on investment.

In addition to formalizing the goals of managing receivables in the credit policy, it is necessary to define tasks, the solution of which will allow achieving target values ​​(for example, entering new markets, winning a larger share of the existing market, building a reputation, minimizing the cost of credit resources). Each formulated task must have a quantitative measurement and deadlines.

It is customary to distinguish three types of credit policies:

Conservative;

Moderate;

Aggressive.

Buyers, as a rule, have different volume capabilities

In order to differentiate the terms of commercial lending, it is necessary to develop an algorithm for assessing buyers. Creating an algorithm for differentiating the conditions for granting deferred payment involves performing a number of steps.

1. Selection of indicators on the basis of which the counterparty’s creditworthiness will be assessed (timeliness of repayment of previously granted deferred payments, business profitability, liquidity, size of net current assets, etc.).

2. Determining the principles for assigning credit ratings to the company's clients. The rating is assigned for a certain period, after which it must be reviewed, for example, once a month.

3. Developing credit terms for each credit rating, then

there is a definition:

- selling prices;

- payment deferment time;

- maximum commercial loan size;

- systems of discounts and fines.

It is necessary to strictly distribute responsibility for managing accounts receivable between commercial, financial and legal services. Often, different departments with conflicting responsibilities are responsible for sales and debt collection. For example, a sales manager (commercial department) is motivated to sell as much as possible, and a accounts receivable manager (financial service) is motivated to receive funds and

minimize debt levels.

A scheme for distributing responsibility is justified, in which the commercial service is responsible for sales and receipts, the financial service takes on information and analytical support, and the legal service provides legal support (drawing out a loan agreement, working to collect debt through the court). It is necessary not only to distribute responsibilities between departments, but also to describe the actions of all employees involved in managing accounts receivable.

In aggregate, credit policy can be presented depending on the subjects of credit relations (Table 10). Credit policy can be aggressive and traditional, classical.

Table 10

		Types of credit policies
	by timing	In the field of short-term lending
		In the field of long-term lending
	by degree	Aggressive credit policy
	riskiness	Traditional, classic
		For providing targeted loans
		For provision of non-targeted loans
	by market type	In the money market
		In the financial market
		On the capital market
		credit policy pursued by:
	by geography	At the local, regional level
		National level
		International level
		credit policy for lending:
		Industrial enterprises (heavy, light,
		Food Industry)
	by industry	Trade organizations
		Construction organizations
	focus
		Transport companies
		Agricultural organizations
		Sales and supply organizations
		Communications companies, etc.
	by security	For provision of secured loans
		For providing unsecured loans
	by methods	When lending on balance
	lending	When lending based on turnover

Credit policy in a broad sense is an activity that regulates the strategic relationship between the lender and the borrower, aimed at realizing the properties of credit and its role in the economy. In relation to each individual entity, credit policy is an activity that regulates the relationship between the lender and the borrower in a certain

period and aimed at realizing their interests.

Credit policy as the basis of the credit management process determines priorities in the process of developing credit relations, on the one hand, and the functioning of the credit mechanism, on the other.

The main goal of the company is to achieve profit. Typically, profits increase as sales volume increases. One of the most effective ways to increase sales is to provide goods on credit. There are the following reasons for this:

Possibility of attracting a buyer who does not have enough funds for an advance payment;

The buyer is able to buy more or more expensive goods. This sales tool is so powerful that firms that...

Those who began to actively use it were able to radically increase their turnover. This applies not only to the sale of expensive goods, for example: leasing cars, but also to the provision of small loans, for example: in the food trade.

When developing a company's credit policy, it is necessary to take into account not only the terms of sales on credit, but also the internal management structure of the organization. The credit department builds its credit policy not only based on the goal of reducing non-payments, but also on the need to increase sales. To increase competitiveness, you can use deferred payment not only for 14–30 days, but also longer. The usual deferment of payment in many countries is 30–90 days, and sometimes 180 days. There are various variations of deferred payment, for example, a discount of 2–3% is common if payment is made within a week after delivery or prepayment. A longer payment term will require more funding for this. Many organizations sell goods on credit, without even specifying the payment term, i.e. By offering to pay for the goods after sale, the organization often maintains a certain balance with its buyer without requiring payment on specific invoices. Unfortunately, an unclear credit system results in a loss of control over debtors, which ultimately leads to bad debts. This problem can be solved quite simply by defining for each client a so-called “credit limit”, which means the amount for which he can be credited

Financing a trade loan is possible in various ways: using your own funds, a bank loan, or a trade loan from your own supplier. Very often, in the case of selling a product to the end consumer, a leasing company is hired for financing. Factoring is becoming widespread. Recently, it is also possible to insure against non-payments. In this case, the insurance company will reimburse non-payments quickly enough - for example, 30 days after the payment is due.

It is necessary to monitor not only compliance with debt amounts, but also to check the timely receipt of payments on a daily basis. Research shows that the probability of receiving a delayed payment is very high and approaches 100% only if efforts to return it have been initiated.

immediately. If the organization begins to deal with it a month after the payment is due, the return rate drops sharply. The probability of repaying the debt after 4–6 months of delay decreases by 2–3 times.

Credit management in a company is one of the main functions of the organization. Without developing a credit policy and an appropriate organizational structure, it is impossible to increase sales volumes while maintaining an acceptable level of non-payments.

The efficiency of using financial resources is characterized by asset turnover and profitability indicators. Consequently, management efficiency can be improved by reducing the turnover period and increasing profitability by reducing costs and increasing revenue.

Accelerating the turnover of working capital does not require capital expenditures and leads to an increase in production volumes and sales of products. The organization uses current assets as working capital. Funds used as working capital go through a certain cycle. Liquid assets are used to purchase raw materials that are converted into finished products; products are sold on credit, creating accounts receivable; debtor accounts are paid and collected, turning into liquid assets.

Any funds not used for working capital needs may be used to pay liabilities. In addition, they can be used to purchase fixed capital or paid as income to the owners.

Increasing working capital turnover comes down to identifying the results and costs associated with storing inventories and establishing a reasonable balance between inventories and costs. To accelerate the turnover of working capital in an organization, it is advisable to:

- planning the purchase of necessary materials;

- introduction of rigid production systems;

- use of modern warehouses;

- improving demand forecasting;

- fast delivery of raw materials and supplies.

The second way to accelerate working capital turnover is to reduce accounts receivable.

The level of accounts receivable is determined by many factors: type of product, market capacity, degree of market saturation with this product, the payment system adopted by the organization, etc. Accounts receivable management

duty involves, first of all, control over the turnover of funds in settlements. The acceleration of turnover in dynamics is considered as a positive trend. The selection of potential buyers and the determination of the terms of payment for goods provided for in contracts are of great importance.

The selection is carried out using formal criteria: compliance with payment discipline in the past, the buyer’s forecast financial capabilities to pay for the volume of goods requested by him, the level of current payment

abilities, level of financial stability, economic and financial conditions of the selling organization (overstocking, degree of need for cash, etc.).

Payment for goods to regular customers is usually made on credit, and the terms of the loan depend on many factors. In economically developed countries, a widespread scheme means that:

- the buyer receives a two percent discount if he pays for the goods received within ten days from the beginning of the credit period;

- the buyer pays the full cost of the goods if payment is made between the 11th and 30th day of the credit period;

- In case of non-payment within a month, the buyer will be forced to pay an additional fine, the amount of which may vary depending on the moment of payment.

The most common methods of influencing debtors to pay off debts are sending letters, telephone calls, personal visits, and selling debt to special organizations (factoring).

The third way to reduce working capital costs is to make better use of cash. From the perspective of investment theory, cash represents one of the special cases of investment

V inventory values. Therefore, general requirements apply to them. First, you need a basic reserve of cash to carry out current calculations. Secondly, certain funds are needed to cover unforeseen expenses. Thirdly, it is advisable to have a certain amount of free cash to ensure possible or projected expansion of activities.

Models can be applied to funds to optimize the amount of funds. This is necessary to evaluate:

- total cash and cash equivalents;

- what share should be kept in a current account and what share in the form of quickly marketable securities;

- when and to what extent to carry out mutual transformation of soft funds and quickly realizable assets.

No interest is paid on bank accounts in which organizations hold their liquid assets. However, other liquid assets (short-term government securities, certificates of deposit) generate income in the form of interest.

In Western practice, the Baumol model and the Miller–Orr model are most widely used.

According to Baumol's model, it is assumed that an organization begins operating with a maximum and appropriate level of cash and then continuously spends it over a period of time. The organization invests all incoming funds from the sale of goods and services in short-term securities. As soon as the cash reserve is depleted, i.e.

becomes equal to zero or reaches a certain specified level of security, the organization sells part of the securities and thereby replenishes the stock of funds to the original value. Thus, the dynamics of the balance of funds on the current account is a “sawtooth” graph (Fig. 7).

Balance

on the current account

Rice. 7. Graph of changes in the balance of funds on the current account (Baumol model)

Baumol's model is simple and sufficiently acceptable for enterprises whose cash expenses are stable and predictable. In reality, this phenomenon rarely occurs; The balance of funds in the current account changes randomly, and significant fluctuations are possible.

The replenishment amount (Q) is calculated using the formula:

Q = 2 × V × c

where V is the projected need for funds in the period (year, quarter, month), c is the cost of converting funds into securities;

r is an acceptable and possible interest income for an enterprise on short-term financial investments, for example, in government securities.

Thus, the average stock of cash is Q/2, and the total number of transactions for converting securities into cash (k) is equal to:

k = VQ

The total costs (OR) of implementing such a cash management policy will be:

OR = c × k + r × Q

The first term in this formula represents direct expenses, the second is the lost profit from keeping funds in a current account instead of investing them in securities.

The Miller-Orr model represents a compromise between simplicity and reality. It helps answer the question of how cash reserves should be managed if it is impossible to predict the daily outflow and inflow of cash.

The balance in the current account changes chaotically until it reaches the upper limit. Once this happens, the enterprise begins

It is not possible to buy a sufficient number of securities in order to return the stock of soft funds to some normal level (point of return). If the cash reserve reaches the lower limit, then the company sells its securities and thus replenishes the cash reserve to the normal limit.

The logic of actions for managing the balance of funds in the current account is presented graphically (in Fig. 8).

monetary
Investing excess cash
	Upper limit
	original
	quantities. So
	Thus, the dynamics
	balance of funds for
	current account
	Return point
	and the first
	great
	ranks. So
	Thus, the dynamics
	mika remainder
Restoring the cash supply
Rice. 8. Miller-Orr model

When deciding on the magnitude of variation (the difference between the upper and lower limits), it is recommended to adhere to the following policy: if the daily variability of cash flows is large or the costs are fixed,

associated with the purchase and sale of securities are high, then the enterprise should increase the scope of variation and vice versa. It is also recommended to reduce the range of variation if there is an opportunity to generate income due to the high interest rate on securities.

The main forms of commercial lending are:

Bill of exchange;

- accounts payable.

A bill of exchange is a written promissory note that gives its owner (the holder of the bill) the unconditional right to demand, upon maturity, from the person who issued the obligation (the drawer), payment of the amount of money specified in it. There are bills of exchange: simple and transferable (drafts).

Accounts payable as a source of financing are formed

due to	existing			payments	organizations
debt		suppliers and contractors, to subsidiaries and
dependent companies, bills payable, wage arrears,
social insurance and security, debt to the budget.
Traditional			short term		lending

using financial instruments such as:

- accounting (bill) credit;

- acceptance credit;

Factoring;

Forfeiting.

bills); mainly used in foreign trade.

Factoring is the sale by an enterprise of receivables at a reduced price to a specialized bank or financial

export operations. Features of forfeiting:

- lending is carried out in the form of the bank purchasing from the exporter a bill of exchange accepted by the importer;

- The bank's purchase of a bill of exchange is carried out, as a rule, at a discount (i.e. the bill of exchange is purchased at a price below its face value). The size of the discount depends on the solvency of the importer, the term of the loan, market interest rates on the loan in a given currency, etc.;

- Forfeiting frees the exporting enterprise from credit risks and reduces the amount of accounts receivable, increasing the share of the absolutely liquid component of the enterprise’s working capital.

Insurance;

- forward contracts (transactions on real goods with delivery in the future -

- futures contracts (purchase and sale of rights to a commodity);

- REPO transactions (an agreement to sell assets with their subsequent repurchase) (Fig. 9).

Commercial			Short term			Non-traditional
			bank loans:			financial
Bill of exchange			Accounting			tools:
Accounts payable			(bill) loan			Insurance
debt			Acceptance credit			Forward
			Factoring			Contracts
			Forfaiting			Futures
						Contracts
						REPO operations

Rice. 9. Short-term lending instruments

	Own sources of capital increase are limited
turn the ability to obtain the necessary profit. So
By managing current assets, the organization gets the opportunity to use less
degree to depend on external sources of cash
increase your liquidity. Effective management of current assets
is considered as one of the ways to satisfy the need for capital.
				determines		appearance	differences
accounting (accounting) and real monetary indicators of sales
products. Until the moment of payment, the implementation process in terms of movement
		continues that		leads		emergence	accounts receivable

debt.

Accounts receivable are divided into:

1) payments for which receipts are expected more than a year after the reporting year;

2) payments for which receipts are expected within the next reporting year.

Accounts receivable include:

- accounts receivable for core activities (sale of products by the enterprise on credit);

- accounts receivable for financial transactions (bills receivable; debt of participants for contributions to the authorized capital; advances issued to employees).

The accounts receivable management process includes the following

Stage 1 – financial analysis of the activities of the supplier organization;

Stage 2 – development of the organization’s credit policy; Stage 3 – making a decision to provide a loan, debt insurance

tor debt; Stage 4 – changing the organization’s credit policy;

Stage 5 – control over the shipment of products, issuing an invoice and sending it to the buyer; compilation of debtor files;

Stage 6 – monitoring the financial condition of debtors; Stage 7 – if the debt or part thereof is not repaid, establishment of operational

communication with the debtor regarding his recognition of the debt; Stage 8 – appeal to the arbitration court with a claim for collection of overdue

debt; Stage 9 – initiation of bankruptcy proceedings;

Stage 10 – compensation for losses from the bad debt compensation fund. Before the due date for payment, receivables must be financially

be carried out, while there is always a risk that payment will be made by the buyer (customer) late or not at all.

There is no doubt that in the modern market, selling on credit is necessary and important. The carelessness that is usually present when addressing issues of credit policy is unfounded. Often, credit sales cause a significant increase in accounts receivable, which can lead to an increase in both costs and risks. In their sales policy, organizations must not only take into account the positive results of lending to customers (increased sales and profits), but also take into account that this process is usually accompanied by an increase in costs and risks.

Assessing the positive and negative results of credit policy should be an integral part of accounts receivable management. First of all, the impact of the current sales credit policy on sales, accounts receivable, production costs, and the risk of losses from bad debts is assessed.

A set of tasks determined by the goals of the organization’s credit policy, the solution of which contributes, among other things, to the reduction of receivables:

- determining credit limits in relations with buyers (customers) and monitoring them;

- monitoring the timing of repayment of receivables and taking subsequent measures to collect them (reminders, sanctions, etc.);

- collection and management of information about buyers (customers);

- assessment of the buyer's (customer's) solvency;

- control of payment terms of orders;

- monitoring of receivables (turnover period, turnover, age of receivables, etc.);

- analysis, planning and control of credit and debt relations;

Communication with marketing services, pricing, etc. The solution of these tasks is assigned to someone with the appropriate qualifications.

assignment of an employee - a credit manager or, if we are talking about a large organization - to the credit department. Such a department has the closest communication ties with the organization’s accounting department and marketing service.

Methods for collecting receivables
Methods for reducing accounts receivable
Contractual and Credit policy of the enterprise as an integral element of accounts receivable management

Credit policy enterprises

A large library distracts rather than instructs the reader.

It is much better to limit yourself to a few authors than to recklessly read many.

Seneca

Development credit politicians

Management progress accounts receivable debt impossible without credit politicians- a set of rules governing the provision of commercial loans and collection procedures accounts receivable debt to the enterprise. Credit policy accepted for a year, after which the goals and objectives, adopted standards, approaches and conditions for company.

Credit enterprise policy answers four questions:

1. to whom should the loan be given?
2. for how long?
3. in what sizes?
4. What are the sanctions for non-compliance with the conditions (client/manager)?

Typical document structure " Credit policy":

1. Goals credit politicians
2. Type credit politicians
3. Buyer Evaluation Standards
4. Standards work personnel
5. Divisions involved in management accounts receivabledebt.
6. Personnel action on company.
7. Document formats used in the process management accounts receivable debt.

Goals credit enterprise policies should be: increasing the efficiency of investing funds in accounts receivable debt, increasing sales volume (profit from sales) and return on investment.

In addition to formalizing goals management accounts receivable debt V creditpolitics tasks should be defined , the solution of which will allow achieving target values ​​(for example, entering new markets, winning a larger share of the existing market, building a reputation, minimizing the cost of credit resources). Each formulated task must have a quantitative measurement and deadlines for completion. works.

When the company's goals, its strategy, market conditions and other significant factors change credit politics needs to be revised.

Purpose

Purpose of adoption Enterprise credit policy is to create a sustainable competitive advantage for the Company and, as a result, stimulate sales growth and control profit of the Company.

Under credit policy, for the purposes of this provision, we mean the sale of goods to the Company’s customers on credit, in the form of providing customers with installment plans or deferred payment under a contract for the supply of goods (commercial credit).

Providing a loan is not the Company’s central competitive advantage, that is, focus the client’s attention on this and first of all announce the possibility of providing a loan during negotiations work with clients is prohibited. Therefore, during negotiations you should always try work with prepayment. If full prepayment is not possible, you should try to get a partial prepayment. And only in the case when the client makes convincing arguments for the need to provide him with a loan, and provided that this client is of interest to the Company (is a target), should we begin to discuss the loan terms offered by the Company.

Yes, we have the option of providing credit, but this should not be the central point of negotiation. Moreover, the size of the loan and possible terms are provided individually and depend on various checks, the results of which the manager cannot know at the initial negotiations, therefore, it is impossible to promise anything to the client in advance. In this regard, the appropriate phrase is: “Yes, we have such an opportunity, we lend to our clients, for this you must provide a number of documents, we will consider them and make a decision” (context: yes, we lend to our clients, but the loan must be earned (credit history, a certain sample size per month)), but nothing can be promised, since the committee’s decision, in principle, can be negative.

Creditpolicy	Implementation in practice	Return to risk ratio
Conservative	Strict credit and collection policy debt, minimum deferred payment, Job only with reliable clients	Minimal losses from the formation of a hopeless debt and payment delays, but sales levels and competitiveness are low
Moderate	Providing average market (standard) terms of delivery and payment	Average profitability. Medium risk.
Aggressive	Large deferment, flexible lending policy	A large volume of sales at prices above the market average, but there is also a high probability of overdue items appearing accounts receivabledebt

Significant indicators credit politicians are:

1. determining the conditions for granting trade credit;
2. calculation of the maximum period for providing a trade loan;
3. drawing up a “discount matrix” - a table containing discount options for goods shipped (services provided) depending on the terms of payment. That is, the price indicated in the price list is the price of the goods provided on credit for the maximum specified period.

TAGS:

Based on the credit policy, the directions and terms of lending are planned, the procedure for issuing loans is developed, a portrait of a potential borrower is formed, a system of discounts and incentives, a procedure for repaying debt, setting an interest rate and other nuances of lending are being thought out.

The task of credit policy is to determine to whom, on what terms and in what order to issue a loan. Lending policies are developed by both commercial banks and enterprises.

Bank credit policy

The main goal of developing a bank's credit policy is to form a reliable loan portfolio. To optimize it, you need to analyze the state of the credit market as a whole and compare it with statistics on the repayment and profitability of loans issued by the bank.

Bank management must consider the following factors:

• level of professional training of employees;
• interest rates;
• portrait of a potential borrower.

No less important is the external situation on the credit market. Taking into account the constant variability of the economic situation, the policies of its main competitors and legislative restrictions on lending volumes, the credit policy of a commercial bank must be adjusted at least once a year.

The credit policy should consist of the following elements:

• goals and general provisions;
• responsibility of employees holding certain positions for certain stages of lending;
• stages of lending from attracting borrowers to issuing a loan and the terms of the loan agreement;
• methods for monitoring the execution of loan agreements and managing the lending process.

Credit policy provisions should establish lending limits, determine what risks the bank is willing to take to attract new clients, which lending areas are a priority, and which can be considered unreasonably risky.

Enterprise credit policy

Enterprises are developing credit policies to attract new customers using convenient payment methods. It is advisable to offer goods and services in installments only if the amount of income from cooperation with new clients exceeds the cost of servicing receivables. Credit policy helps regulate this issue. This provides a unified strategy for working with clients for all managers:

• when you can make a discount or provide more favorable conditions to the client;
• for what period is it permissible to issue an installment plan;
• what calculation procedure is most preferable;
• what penalties should be specified in the loan agreement;
• how to notify clients about upcoming payments;
• procedure in case of late payments;
• procedure for refinancing debts.

Credit policy allows you to organize work in such a way that the risk that an enterprise takes when issuing loans is, with a high degree of probability, justified by potential profit. At the same time, providing installment plans to customers should not lead to losses for the company.