1. Business Documents

2. What does Credit mean?
Credit means giving the goods to the customer now but not requiring payment until sometime after delivery, e.g. 1 month

3. Selling Goods On credit
Seller must decide:
Will I give the customer credit?
Will I require payment before, when, or after goods are delivered?

4. Why would a seller give credit?
Customer can’t afford to pay for the goods until they have sold them
It should increase their sales and therefore their profits

5. Creditworthiness Are customers good at paying back what they owe?
This is called Creditworthiness
How could we find out customers are credit worthy?

6. Creditworthiness Ask for a bank reference from the customer
Ask for a trade reference (dealings with other businesses) from the customer
Look at the customer’s accounts

7. Creditworthiness