What should a firm do after establishing a credit policy?
A)Determine what percent of monthly sales are collected in the month after that sale.
B)Decide on the length of the period before payment must be made.
C)Monitor its accounts receivable to analyse whether its credit policy is effective.
D)Decide what should be done for those customers who do not pay their accounts on time.

Question

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After establishing a credit policy, a firm should monitor its accounts receivable to analyze whether its credit policy is effective. This allows the firm to assess the impact of its credit terms on cash flow and customer payment behavior, and make necessary adjustments to improve credit management and financial health.

What Should a Firm Do After Establishing a Credit Policy