How to Set Customer Credit Limits and Manage Credit Sales

To set a customer credit limit, evaluate payment history, financial capacity, purchasing volume, and requested payment terms. Start new customers with conservative limits and increase them gradually when payments remain consistent.

A practical starting estimate is average daily credit purchases multiplied by the credit period, adjusted for customer risk and available cash flow. Monitor outstanding balances and new orders before approving additional credit, and review limits regularly. Try Cash Cloud for free to explore customer account and receivables management tools.