Finance Credit Policy Checklist

Date: [Month Day, Year]

The Finance Credit Policy Checklist is designed to ensure that our organization's credit policies and procedures are comprehensive, up-to-date, and aligned with industry best practices. This checklist serves as a reference guide for our finance department to maintain consistent credit practices.

Credit Policy Framework

Our organization has a well-defined credit policy framework in place, including a documented credit policy statement.

Credit Application Process

We have established a standardized credit application process for new clients and customers.
The credit application form includes all necessary fields for comprehensive evaluation.
Credit application forms are reviewed and updated regularly to capture essential information.

Credit Risk Assessment

Our organization conducts thorough credit risk assessments for all clients and counterparties.
We use a standardized credit risk assessment scale to categorize credit risk.
Credit risk assessments consider factors such as financial health, liquidity, and solvency.
The credit risk assessment process is documented and consistently followed.

Credit Limits and Terms

Credit limits are established for each client or counterparty based on their credit risk assessment.
Credit terms, including payment schedules and deadlines, are clearly communicated to clients.
The finance department monitors credit limits and terms regularly and makes adjustments as needed.

Credit Monitoring

We have a system in place for ongoing credit monitoring of existing clients and customers.
Credit monitoring includes reviewing payment histories, financial health, and changes in credit risk.
Early warning indicators are identified and acted upon promptly.

Credit Approval Process

There is a defined process for credit approval, including designated individuals responsible for approvals.
Credit approval decisions are based on credit risk assessments and comply with established policies.
The credit approval process includes documentation of approvals and reasons for denials.

Credit Documentation

Credit agreements and contracts with clients are documented and legally sound.
Key terms and conditions, including interest rates and collateral requirements, are specified in credit documentation.
Contracts are reviewed and updated as necessary to reflect changes in credit terms.

Credit Reporting and Records

We maintain accurate records of credit assessments, approvals, denials, and credit limits.
Credit reports and records are securely stored and easily accessible for auditing purposes.
Documentation is retained in compliance with legal and regulatory requirements.

Compliance with Regulations

Our credit policies and practices comply with relevant financial regulations, including SOX, Dodd-Frank, and industry-specific regulations.
Compliance is regularly reviewed and updated to reflect changes in regulations.

Training and Awareness

Staff responsible for credit-related activities receive training on credit policies and procedures.
Awareness of the importance of credit policies and compliance is promoted within the organization.