Vendor Credit

Managing vendor credit means overseeing the payment terms and credit limits suppliers give a business when it buys now and pays later. Its general functions include:

• Applying for credit: Provide vendors with the business information and references they require.
• Reviewing terms: Understand credit limits, payment due dates, discounts, interest, and late fees.
• Monitoring balances: Track how much is owed to each vendor and how much credit remains available.
• Paying on time: Coordinate with accounts payable to protect the business’s standing with suppliers.
• Resolving discrepancies: Address incorrect invoices, disputed charges, credits, and returns.
• Maintaining relationships: Communicate with vendors about payment issues or requests for different terms.
• Reviewing credit needs: Request a higher limit or revised terms when purchasing needs change.
• Keeping records: Maintain credit agreements, statements, correspondence, and payment history.

The goal is to keep needed supplies available while using vendor credit responsibly and avoiding unnecessary costs.