Credit Sales Evaluation Model For A Small Firm

Abstract

Credit sale is the need of every small or big firm. It is really crucial for small firms to initiate credit sale to survive in competitive environment. At the same time, the selection of customers to whom goods and services can be sold on credit is also vital. In this paper, a credit control model is developed for numerically scoring the creditworthiness of existing customers for further credit sale. The model is constructed for small manufacturing firms which cannot handle the extra cost of complex methods used for credit evaluation. Such model will support small firms to rank their customers based upon certain forecasted and current sales values and accordingly deciding whether to give credit or not and how much should be given?