Credit control is a system used by businesses and central banks to ensure that credit is given only to borrowers who are likely to be able to repay it. It is a critical system of control that prevents the business from becoming illiquid due to improper and uncoordinated issuance of credit to customers. Credit control has a number of sections that include credit approval, credit limit approval, dispatch approvals, as well as the collection process. In general, credit control is a way to make it easier for customers to purchase a companys goods or services by offering attractive payment terms, thus making the purchase itself attractive. Efficient credit control can result in increased sales and profits for a company.

Credit control involves setting credit limits, assessing customers creditworthiness, monitoring payment patterns, and taking corrective actions to reduce credit risk. Companies draft credit control policies that are either restrictive, moderate, or liberal. Credit control focuses on credit period, cash discounts, credit standards, and collection policy. Effective credit control requires a robust credit management system with policies, procedures, and tools to monitor and control credit. Credit control methods include credit checks, setting credit limits, regular monitoring of accounts, debt collection procedures, and offering discounts for early payment.

In summary, credit control is a business process that promotes the selling of goods or services by extending credit to customers while limiting exposure to bad debts. It involves implementing policies and procedures to evaluate customers creditworthiness, setting limits, and monitoring and controlling outstanding receivables. Credit control is essential for managing credit risk and ensuring timely customer payment, and it can help a business boost its bottom line.