Reference no: EM133578626

1. Respond with a value added comment to the discussion below:

A firm's credit policy is a bunch of rules and choices that direct the way in which the company stretches out credit to its customers and manages records of sales. The particular components of a firm's credit policy can differ contingent upon the industry, market conditions, and the company's financial position, yet by and large incorporate the accompanying parts:

Credit Standards: These are the measures used to assess the creditworthiness of expected customers. Credit standards ordinarily incorporate factors like a customer's credit history, financial stability, and payment history.

Credit Terms: This characterizes the particular terms and conditions under which credit is stretched out to customers. It incorporates subtleties like payment due dates, credit limits, and any discounts offered for early payment.

Credit Approval Process: Firms lay out a technique for supporting or dismissing credit applications from customers. This might include credit checks, financial examination, and risk evaluation.

Credit Monitoring and Control: Firms need mechanisms set up to monitor customer accounts and guarantee consistence with the credit terms. This incorporates following remarkable balances, circling back to late payments, and making a move if there should be an occurrence of defaults.

Collection Policy: Firms ought to outline their way to deal with gathering late payments, including the utilization of collection organizations, legal activity, or negotiation.

Concerning whether firms can set their own credit strategies or are impacted by competition, it generally relies upon the industry and market dynamics. variables to consider include Competitive Pressure, Industry Norms, Financial Position, Regulatory and Legal Constraint. In profoundly competitive markets, firms might feel constrained to offer more lenient credit terms or settle for the easiest option to draw in customers. Be that as it may, they should work out some kind of harmony to stay away from excessive risk. A few enterprises have laid out credit practices and standards that firms are supposed to stick to. Deviating excessively far from these norms might make it trying to work inside the industry. Also, firm's financial health and creditworthiness assume a part in setting credit strategies. A financially solid company might have greater flexibility in setting its strategies contrasted with one confronting financial constraint. At times, legal and regulatory requirements might direct specific parts of a firm's credit policy, for example, interest rates, fees, or detailing rehearses.

2. Respond with a value added comment to the discussion below:

A firm's credit policy includes elements like credit terms, credit limits, and collection procedures. These elements help determine how the company manages its credit and collection processes. Firms have some flexibility in setting their own credit policies, but they are also influenced by "the competition" and other aspects in the industry . While firms can shape their credit policies to meet their specific needs, they must also consider the practices of their competitors to remain competitive in the market. Creating a balance between setting their own policies and aligning with industry standards is crucial for firms to maintain their competitiveness and meet customer expectations.