Credit management is the process of granting credit, setting the terms on which it is granted, recovering this credit when it is due, and ensuring compliance with company credit policy, among other credit related functions. This task is often performed by a credit manager who is a person employed by an organization to manage the credit department and make decisions concerning credit limits, acceptable levels of risk, terms of payment and enforcement actions with their customers. Key stages of credit management include credit assessment (with credit rating evaluation), decision-making, limit setting, portfolio monitoring, collection activities, and performance reporting.

The goal within a bank or company, in controlling credit, is to improve revenues and profit by facilitating sales and reducing financial risks. A structured credit policy ensures that the credit team uses a standardized method for managing a customer’s credit risk. This leads to consistent credit decisions and eliminating compliance issues because there is an audit trail.

Credit management and the credit manager function is often combined with accounts receivable and collections department of a company.

The role of a credit manager is variable in its scope, with typical responsibilities such as:

Credit managers tend to fall into one of three groups depending on the specific legal and jurisdictional knowledge required:

Construction Credit Management is considered an specialist area of credit management for the construction industry that require specific skill due to the nature of construction projects. These include:

Credit managers in Australia obtain memberships from the Australian Institute of Credit Management (AICM). Qualifications and continuing education can also be obtained from here.

Credit professionals in Canada can obtain the official designation, Certified Credit Professional – CCP (formerly known as the Fellow Credit Institute — FCI), from the Credit Institute of Canada.