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title: "Introduction to Customer Credit"
canonical: "https://kb.myframeworks.com.au/space/PROSTIXV48DOC/31101332/Introduction%20to%20Customer%20Credit"
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What is credit? Credit is the  ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.  Companies extending credit terms often have more money tied up in Accounts Receivable than any other asset. Next to cash on hand, A/R is the most liquid asset available, being but one step removed from money in the bank, yet the credit and collection function responsible for creating and managing Accounts Receivable may be the most misunderstood, under-utilised and under-valued area of a business. Refer to the following processes for further information:   Why offer credit? There are customers who require suppliers to provide their product/s, and to then allow them to confirm receipt of goods and to process the bill for payment.  There are customers who must sell to their own customers and collect payment prior to paying their own creditors.  There are competitors who offer credit terms.   What are the major components involved with the credit function of a business?   What are the costs and risks involved with offering credit?   What are the benefits of the credit control functions of a business?   What are the roles of the Credit Manager? This Training Manual and the  Accounts Payable User Guide  covers all of the given functions under the following topics: Related Video's ProStix - Credit Approval Part 1 (GUI)   ProStix - Credit Approval Part 1 (CHUI)   ProStix - Credit Approval Part 2 (GUI) ProStix - Credit Approval Part 2 (CHUI)