Should we consider our company’s profit margin when making credit decisions or establishing credit limits for our customers?night delivery service loses a COD check from the customer that they are not responsible for our loss if we cannot collect from the debtor?

Answer: Yes…But the extent to which the credit manager can and should the profit margin on its products into consideration when evaluating credit risk must be done in the context senior management’s expectations relating to how conservative the credit department should be in managing and controlling credit risk.