Credit policy plays a crucial role in the efficient management of working capital within a business. The main objective of a credit policy is to set clear guidelines regarding the credit terms and conditions extended to customers. This helps businesses manage their liquidity effectively while simultaneously driving sales and revenue. The policy aims to balance the risk of extending credit with the potential for sales growth, ensuring the business is not overexposed to bad debts or uncollected receivables. One of the primary objectives of a credit policy is to define the terms under which credit is granted to customers, including the length of the credit period, interest rates on overdue payments, and any discounts for early payments. A well-structured policy ensures that the business can generate enough cash flow to meet its short-term obligations without having to rely on expensive financing options. By offering credit to reliable customers, businesses can increase their sales volume and build strong customer relationships, ultimately boosting their market share and profitability. Another objective is to assess the creditworthiness of potential customers before granting them credit. This is typically done through credit scoring models or by reviewing past payment histories, thus reducing the likelihood of bad debts and late payments. A credit policy provides a framework for assessing customers' ability to pay and helps businesses avoid extending credit to risky customers who could negatively impact cash flow and increase the possibility of default. In addition, credit policy aims to enhance