Accountio / Templates / Finance policies / Credit control policy

Credit control policy template for finance teams

Set how your company gives credit, bills customers, chases late payment and looks after cash and bank accounts, with a day-by-day chasing timetable. This credit control policy template is one Word policy with suggested terms and limits you change to suit.

Finance teams
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What the policy looks like

Credit control policy template
What the policy coversSection in the policy
Checks before you give credit
✓
New customers and credit limitsIdentity, a credit report and, for larger limits, the customer's latest accounts
Credit limits and payment terms
✓
New customers and credit limitsSet within the matrix, with orders held if a customer would go over their limit
Invoicing on time
✓
BillingWithin a set number of working days of delivery or the contract milestone
Credit notes
✓
BillingApproved within the matrix, with a reason, and reviewed each month
The chasing timetable
✓
Collecting debtsFrom a courtesy reminder before the due date to a referral to collectors or solicitors
Who chases at each stage
✓
Collecting debtsCredit controller first, then the head of department and the FD
Aged debtors review
✓
Collecting debtsWeekly by the credit controller, monthly by the FD
Bad debt write-offs
✓
Collecting debtsOnly after recovery has failed, with written-off debts kept on a list
Late payment interest
✓
Collecting debtsOptional line for statutory interest and compensation, after a warning
Bank accounts and signatories
✓
Bank accounts and mandatesBoard approval for new accounts and signatories, two signatories above a set amount
Receipts, petty cash and cheques
✓
Receipts and cashMatched daily, a small locked float counted by someone else, cheques banked quickly
Cash forecast
✓
Cash forecasting and surplus cashA rolling 13-week forecast compared with actual cash

When you need it

Any company that sells on credit needs written rules for who gets credit, how invoices go out and what happens when customers pay late. Adopt the policy or review it when:

  • Your aged debtors report is growing, or the same customers pay late every month
  • You take on a credit controller, or the job passes to someone new
  • You start selling on credit to larger customers or into new markets
  • Auditors or lenders ask how you set credit limits and write off debts
  • A credit note or write-off went through that nobody approved

How to use the credit control policy template

  1. Set your terms and limits. Payment terms, the credit check threshold and the signatory limit are suggestions in brackets. Match them to your delegated authority matrix.
  2. Adjust the chasing timetable. Change the days and who acts at each stage to fit your customers.
  3. Decide on late payment interest. Keep the optional line if you charge statutory interest, and add the warning to your final notice.
  4. Name the people and systems. Fill in the credit controller, the person who keeps the bank mandate list and where credit limits are recorded.
  5. Set your cash rules. Enter the petty cash float, the minimum cash level that goes to the board and where surplus cash may be placed.
  6. Name the owner and approver. Add the next review date and tell the sales and finance teams where the policy lives.

Questions

What should a credit control policy include?

How you check customers before giving credit, how credit limits and payment terms are set, when invoices go out, a timetable for chasing late payment, who approves credit notes and write-offs, and whether you charge late payment interest.

What is a credit control procedure?

The step-by-step part of the policy: what happens on each day after an invoice falls due, who does it and when the account goes on hold or is passed to collectors. This policy sets it out as a table from seven days before the due date to 60 days after.

Can I charge interest on late payments?

Yes, for business customers. Under late payment law you can claim statutory interest of 8% plus the Bank of England base rate, unless your contract sets a different rate. Send a new invoice if you add interest.

How much compensation can you claim for a late payment?

A fixed sum of £40, £70 or £100 for each late payment, depending on the size of the debt, on top of interest. You can charge it once for each payment.

What payment terms can a business set?

If you agree a payment date with another business, it must usually be within 60 days, or 30 days for public authorities. A longer period must be fair to both sides. With no agreed date, a payment is late 30 days after the customer gets the invoice or the goods, whichever is later.

Also in the finance policies and procedures manual

Governance, authority and segregation of dutiesDelegated authority matrixPurchasing and paymentsExpensesJournals, reconciliations and fixed assetsRecord keepingFinance controls workbook

See the whole pack →

Who it's for

Finance directors, financial controllers and credit controllers who want one clear set of rules for credit, collections and cash.

Last checked

Checked against GOV.UK guidance on late commercial payments in November 2026.