Credit Analysis and Granting – How important is it within the Sales Cycle?
Posted: Sun Jan 19, 2025 9:43 am
Increasing sales and ensuring healthier financial management for your company. These are certainly two major goals for every entrepreneur, especially in times of economic recession. In these cases, Credit Analysis and Granting becomes a fundamental process for decision-making, reducing the risk of default and maintaining cash flow stability. But how does this relationship work? We'll explain it to you below!
What is Credit Granting?
Daily relationships with customers, whether individuals or rcs database entities, involve access to products or services. If your sales are made through credit or installment payments, you are granting credit. In other words, you are allowing the purchase of your product, with payment in installments, and placing trust in the buyer's ability to pay off the debt.
But simply believing in the customer's good faith is not enough to make safe decisions. Every business owner must be prepared to understand when and how the sale should be released. After all, in the event of default, the impact will fall on your business, requiring credit recovery actions.
The exceptions are purchases made in cash or by card , in which the analysis is carried out by the issuing institution. Therefore, before granting credit, establish criteria for release and how the charge will be made. With these criteria, you will be able to understand the financial behavior patterns of your customers and offer the most appropriate solutions for each one.
Credit Analysis: Starting the Sales Cycle Safely
In most retail companies, Credit Analysis and Granting is the first step in the Sales Cycle. In other words, it is the beginning of the necessary phases for selling a product or service, from the first contact with the customer to after-sales. This path may include portfolio management, credit recovery and collection, and prevention of financial fraud, depending on your business model. Learn more about the Sales Cycle here .
It is through Credit Analysis that the entrepreneur can define whether or not to grant a credit plan to a client, for example. And it is valid not only for new buyers – imagine the possibility of a known client becoming delinquent in a few months. Unfortunately, this scenario is common in times of economic instability .
Credit Analysis is recommended for companies in all sectors – as it ensures that the credit granted will be received. And, if done carefully, it shows which customers have greater or lesser payment potential, avoiding future problems.
This way, you will have greater control over the next phases of the Sales Cycle – reducing the need for credit recovery actions and fraud. In addition, you will be able to strengthen your relationship with your customers, maintaining constant negotiations based on a well-structured credit policy.
Read more: “ Credit and Collection Policy: Best Practices ”
How does Granting Credit impact the financial health of my business?
What is Credit Granting?
Daily relationships with customers, whether individuals or rcs database entities, involve access to products or services. If your sales are made through credit or installment payments, you are granting credit. In other words, you are allowing the purchase of your product, with payment in installments, and placing trust in the buyer's ability to pay off the debt.
But simply believing in the customer's good faith is not enough to make safe decisions. Every business owner must be prepared to understand when and how the sale should be released. After all, in the event of default, the impact will fall on your business, requiring credit recovery actions.
The exceptions are purchases made in cash or by card , in which the analysis is carried out by the issuing institution. Therefore, before granting credit, establish criteria for release and how the charge will be made. With these criteria, you will be able to understand the financial behavior patterns of your customers and offer the most appropriate solutions for each one.
Credit Analysis: Starting the Sales Cycle Safely
In most retail companies, Credit Analysis and Granting is the first step in the Sales Cycle. In other words, it is the beginning of the necessary phases for selling a product or service, from the first contact with the customer to after-sales. This path may include portfolio management, credit recovery and collection, and prevention of financial fraud, depending on your business model. Learn more about the Sales Cycle here .
It is through Credit Analysis that the entrepreneur can define whether or not to grant a credit plan to a client, for example. And it is valid not only for new buyers – imagine the possibility of a known client becoming delinquent in a few months. Unfortunately, this scenario is common in times of economic instability .
Credit Analysis is recommended for companies in all sectors – as it ensures that the credit granted will be received. And, if done carefully, it shows which customers have greater or lesser payment potential, avoiding future problems.
This way, you will have greater control over the next phases of the Sales Cycle – reducing the need for credit recovery actions and fraud. In addition, you will be able to strengthen your relationship with your customers, maintaining constant negotiations based on a well-structured credit policy.
Read more: “ Credit and Collection Policy: Best Practices ”
How does Granting Credit impact the financial health of my business?