Customer credit limits
Turn the customer’s requested exposure, expected purchasing, payment evidence, and your risk policy into a documented limit that authorized people can explain and review.
Consider likely order size, order frequency, payment terms, seasonality, open orders, and the timing between shipment and cash receipt. The useful limit should relate to the exposure your company may carry.
No single input establishes a safe limit. Define how your team evaluates the file.
Document who approved the limit, the evidence considered, any conditions, and when the account should be revisited. Material changes in volume, payment behaviour, ownership, or exposure may also trigger review.
A connected process
Model expected purchases, terms, shipment timing, and peak outstanding balance.
Apply the required information and escalation thresholds in your policy.
Record the limit, conditions, authority, and review triggers.
TradeCredit.ca organizes the application, reference responses, follow-up, and audit trail. Your team evaluates the evidence and makes the credit decision.
Questions credit teams ask
There is no universal formula appropriate for every business. A defensible method connects expected exposure and available evidence to your company’s risk appetite and approval policy.
Not automatically. The request is context. Your team may approve it, approve a different limit, apply conditions, or decline according to policy.
Define scheduled reviews and event-driven triggers in your policy, such as material volume changes, payment deterioration, ownership changes, or requests for higher exposure.
A written authority matrix should assign approval levels based on exposure and exception type. The workflow should route and record the correct approver.
Canadian supplier pilot
Join the TradeCredit.ca pilot for Canadian supplier credit teams.