BACKGROUND, ORIGIN AND EVOLUTION OF CREDIT

ORIGIN

There are different versions regarding the initiation of credit operations, but of one
In broad terms, we can state, without fear of being wrong, that credit is as old
like civilization. In its beginnings, the loan was made in kind, and it was not until
the emergence and use of currency when the first credit signs appeared
a tabulated manner.

Before the Christian era, in ancient Rome, they found the first signs of
Credit development. We know that its yields fluctuated between 40 and 75%, and yet
when they seem elevated, it should be considered that, due to the circumstances of that
At that time, the lender was taking great risks. There is evidence of laws and decrees that
they established corporal punishments for the insolvent debtor or for those who did not fulfill the agreement with

the creditor; there are also historical documents indicating variable penalties between the
confiscation of the debtor's assets, imprisonment, and even the death penalty,
although the most common punishment was their sale as a slave.

Evolution

In addition to lenders, bankers became widespread. Their activity was different,

they acted as money changers and merchants of precious metals, they charged
credits of their clients when the debtors were located abroad, and were responsible
to in turn pay the debts of its local clients to creditors based in others
places, but they did not engage in lending operations. It wasn't until the 12th century when
banks appeared almost as we know them today.

The Babylonians left written records on clay tablets, which were payment orders.
with certain similarities to the current bill of exchange.
In Greek commerce, a document similar to a bill of exchange was institutionalized and the
transfer letters, so used by the Romans. There are reliable bases of
international trade transactions of ancient peoples such as Syria, Carthage and
Egypt. The Greeks and the Romans used letters of credit to avoid transportation.
money material, since in their journey from town to town there were serious risks
of frequent assaults on merchant caravans; therefore, when a merchant had
When traveling, I deposited the funds with the correspondent at the destination.

Maritime trade tremendously increased the evolutionary process of the use of credit.
The export and import movement required foreign money to develop the
transactions overseas. Therefore, situations arose in which the
merchants teamed up with brokers, who provided funds to carry out
the journey, and they were obligated to accompany the goods during the trip to
personally take charge of selling them. This type of trade developed as
merchant society, in which the lender and the merchant became true
partners and owners of the goods. This situation led to the creation of a combination of
money loans and a kind of insurance, so that if the vessel
if he was shipwrecked, the debtor would be exempt from the obligation to settle the received credit.

During the Middle Ages, with the development of Mediterranean trade and prosperity of
important banking companies arise in the major commercial cities: the Table of
Cambis, from Barcelona, founded in 1401; the Bank of Valencia, in 1407; the Bank of San
Giorgio of Genoa, in 1409, and the Mount of Venice, in 1482.

Background of credit in Mexico

The first vestiges of credit in Mexico can be found among the Aztecs. Upon arriving the
Spaniards to what is today the territory of Mexico, this was largely dominated by its majority.
part called the Triple Alliance, made up of the Aztec kingdom, that of Texcoco or Acolhuacan and
the one from Tlacopan or Tacuba. Basically, the social and economic organization of
these towns obeyed the Aztec pattern, that's why what is said about the inhabitants
The situation in Tenochtitlan is, in general terms, applicable to the other inhabitants of the territory.

dominated by them.
Background, origin, and evolution of credit

By the end of the 15th century, the economy of the Aztecs had reached a remarkable development;
commercial transactions, greatly increased, were conducted not only through
exchanges, but as true buying and selling transactions, whose instruments of
change were different types of coins that, although not minted, played the
paper of these. The different species of coins used by the Aztecs were;

Cacao, different from what was used in everyday consumption.

2. small cotton keys intended exclusively for the acquisition of

merchandise, called jatoguachtli.

3. pieces of copper, very similar to the minted coin.

References to credit are also found in the history of the Aztec empire Sahagún.
talks about the celebration of loans in money 'upon achievement'. For its part, the legislation
Aztec recognized debts and imposed, as penalties for delinquent debtors, the
prison and even slavery.

In studying the preparations and the development of the conquest of New Spain, one ...
credit operations are found. As an example, we cite the following:

Hernán Cortés receives funding from Diego Velázquez and other friends of his for the
projected expedition. From Diego Velazquez, Cortés received ten ships, and obtained from the
other people 4000 pesos in gold and 4000 in merchandise, providing collateral for the loan
received his Indians, his estate, and his finances. From Diego Velazquez himself he received
loaned 2000 pesos in gold and from Pedro Jerez 550, leaving gold as collateral to be melted
for the value of 3000 pesos.

The same Hernán Cortés was supported by a bond that exceeded his worth, Andrés del
Duero, your friend, neighbor from the island of Cuba.
Some members of the company founded by Cortés had provided guarantees and obtained
bonds to obtain what is necessary to understand the journey to the continent; for that purpose,
Cortés became the guarantor of foreign credits, granting loans through the
issuance of 'certificates' and promises of surety so that lenders would facilitate
resources, for which, if not paid, Cortés himself would be held responsible.

Definition and concept

The term credit comes from the Latin creditum, from credere, to have confidence. Even though it does not

there is a generally accepted definition, we can define the credit operation

as "the delivery of a current value, whether of money, merchandise, or service, based on
trust, in exchange for an expected equivalent value in the future, which may exist
additionally an agreed interest.
1.- CREDIT

1.1 BACKGROUND

1.1.1 ORIGIN AND EVOLUTION

2.- CLASSIFICATION OF CREDIT

3.- CLASSIFICATION OF CREDIT ACTIVITIES

3.1 CLASSIFICATION OF CREDIT ACCORDING TO ITS USE

3.2 CLASSIFICATION OF CREDIT BASED ON THE DOCUMENTS THAT

SUPPORT THE OPERATION.

3.3 CLASSIFICATION OF CREDIT ACCORDING TO PAYMENT CONDITIONS.

3.4 CLASSIFICATION OF CREDIT BY THE SUBJECT

4.- CREDIT POLICIES

5.-TYPES OF CREDIT ORGANIZATION

5.1 IN RELATION TO THE OBJECTIVE

5.1.1 ON COMICNESS

5.1.2 FINANCING OF INVENTORIES

5.2 IN RELATION TO THE WARRANTY

5.2.1 PERSONAL OR UNSECURED LOAN

5.2.2 PLEDGED CREDIT

5.2.3 DOCUMENTARY CREDIT

5.2.4 MORTGAGE LOAN

5.3 IN RELATION TO BANKING OPERATIONS

5.3.1 SIMPLE CREDIT

5.3.2 CREDIT IN CURRENT ACCOUNT

5.3.3 DISCOUNTS ON TITLE

5.3.4 LEASE OF EQUIPMENT

5.3.5 LETTER OF CREDIT

5.3.6 CREDIT CARD

6.- SMALL COMPANIES

7.-DISTRIBUTORS AND WHOLESALERS

8.-MANUFACTURERS

9.-RELATIONS WITH OTHER DEPARTMENTS

9.1 RELATIONSHIP WITH MARKETING AND SALES DEPARTMENTS

9.1.1 COLLABORATION BETWEEN THE CREDIT DEPARTMENT AND THE

SALES DEPARTMENT

9.1.2 COLLABORATION BETWEEN THE SALES DEPARTMENT AND THE

CREDIT DEPARTMENT

9.2 COORDINATION WITH THE FINANCE DEPARTMENT FUNCTION

TREASURY

9.3 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

PURCHASING AND PRODUCTION DEPARTMENT

9.4 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

DEPARTMENT OF ACCOUNTING

9.5 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

LEGAL DEPARTMENT

9.6 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

SHIPMENTS AND WAREHOUSE DEPARTMENT

9.7 RELATION OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

DATA PROCESSING DEPARTMENT

9.8 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

PRODUCTION DEPARTMENT
1.-CREDIT

The term credit comes from the Latin creditum, from credere, to have trust. Even though not
there is a generally accepted definition, the credit operation can be defined
according to Emilio Villaseñor Fuente, as: "the delivery of a current value, whether money,
goods or services, based on trust in exchange for an equivalent value
expected in the future, possibly having an agreed interest additionally
Etymologically and commonly, credit equates to trust, this is its foundation, although
At the same time, it implies a risk. There are loans as long as there is a term contract.
(verbal or written); that is, a contract that creates obligations whose execution is
different for one of the parties instead of demanding it immediately from them. That is why, in their

Legal acceptance of credit is a promise to pay that establishes a legal bond.

between the debtor and the creditor. On one hand, the debtor

1.1 BACKGROUND

1.1.1 ORIGIN AND EVOLUTION

Credit is as old as civilization, before the Christian era, in ancient

Rome, we find the first signs of credit development, it is known that their yields
they fluctuated between 3% and 75% and even when they seem high, it should be considered that
Due to the circumstances of those times, the lender had great risks. There are
certificate of laws and decrees that established corporal punishment for the debtor who does not
he fulfilled the agreement with the creditor; there are also historical documents that indicate
Variable penalties such as the confiscation of the debtor's assets. Evolution of credit.
In addition to lenders, bankers became widespread; their activities were different.
well, they worked as money changers and merchants of precious metals, they charged the
credits to their clients, when the debtors were based abroad, and were in charge of,
in turn, to pay the debts of local clients to creditors based in others
It was until the 12th century that banks appeared, almost as we know them.
currently. The Babylonians left written records made on clay tablets of orders of
payment, somewhat similar to the current promissory note. The Greeks and Romans used
the promissory note to avoid the physical transfer of money, due to frequent robberies in the
caravans of merchants. Therefore, when a merchant had to travel, he would deposit the
funds with the banker of his city, and he would provide a document that covered the
import deposited, which was collected at the destination. Maritime trade
tremendously increased the evolutionary process of credit use. The movement of
export and import required external money to develop the transactions
merchants associated with commission agents, who provided the goods
during the trip to personally take care of selling them. This type of trade is
was developed as a commercial society where lenders and merchants were owners of
the merchandise. The combination of cash loans and insurance allowed that, if the
the ship was sinking, the debtor was exempt from the obligation to pay the debt
received. The combination of cash loans and insurance allowed that, if the vessel
In case of shipwreck, the debtor was exempt from the obligation to pay the received credit.

During the Middle Ages, with the development of maritime trade and the prosperity of the
In major cities, important banking companies emerge such as: • Exchange table -
Barcelona-1401 • Banco de San Jorge-Génova-1409 • Monte Vecchio-Venecia-1482
Background of credit The first credits in Mexico can be found among the
Aztecs, upon the arrival of the Spaniards to what is now the territory of Mexico, this was located
dominated mostly by the so-called Triple Alliance, made up of the Aztec kingdom,
the one from Texcoco or Acolhvacan and that of Tlacopan or Tacaba. At the end of the 15th century, the

the economy of the Aztecs had achieved remarkable development, the transactions
commercial transactions were carried out not only through barter, but as true operations of
buy-sell. Its means of exchange were different types of currency, which although
not minted, played the role of this. The different species of currency
The foods used by the Aztecs were: 1. Cocoa, different from what was used for consumption.
daily. 2. Small cotton fabrics, intended exclusively for acquisition of
merchandise. 3. Pieces of copper, very similar to minted coins.

Background

Credit

Evolution

Origin
15th Century

Middle Ages

12th Century

Ancient Rome

Laws that established corporal punishments

Credits that fluctuated 3% and 75%

Mexico

Maritime trade and the prosperity of cities: arise

Babylonians

Aztecs

Greeks

Buying-selling operations

Romans

Banking companies

Promissory note

Types of currency

Exchange table Barcelona 1401

2.- CLASSIFICATION OF CREDIT

 Own

By its nature

Necessary

Natural

For the quality of things in

What does the benefit consist of?

Monetary

In the short term

At term

In the long term

Due to expiration

Reportable

On time

Not reportable

Public

For the people

Private

Direct

Personal

Joined in a third
For the guarantee

Furniture

Real

Real estate

Paid

Commercial Consumption of Business

For objective or purpose productive Popular Of treasury

Agricultural Possession

3.- CLASSIFICATION OF CREDIT ACTIVITY

3.1 CLASSIFICATION OF CREDIT ACCORDING TO ITS USE

a) Investment credit: the one granted with the purpose of placing capital in the hands of
third parties, to recover them at a date far from when the provision was made,
additionally perceiving a certain interest.

b) Bank credit: basically a banking institution is a company created to

commercial credit. In contrast to investment credit, bank credit is
is characterized by its short duration. The main purpose of bank credit is to make
to operate the activities of production, distribution, and consumption.

c) Credit between merchants: the one in which one of the goods that initiates the
operation is constituted by goods or services, where the
loan operations made in cash or credit securities.

d) Consumer credit: the one that a company grants to its customers when providing them
products or services in exchange for receiving their value, with or without agreed or hidden interest, in

a future date.

3.2 CLASSIFICATION OF CREDIT BASED ON THE DOCUMENTS THAT

SUPPORT THE OPERATION
a) Bank and commercial credit documents: this classification is established in
attention to the backup that, to guarantee the operations carried out, derives from
document that justifies the transaction (collectibility potential entailed by possession
from the document).

First guarantee documents (promissory note and secured or guaranteed bond)

Second guarantee documents (promissory note and simple note)

Third-party guarantee documents (secured checking account)

Fourth guarantee documents (current account without guarantee)

b) Investment credit documents: in relation to this credit, it is common to stipulate to

long term, for which bonds and mortgage notes are used. The obligations without
specific guarantees are almost always issued by reputable medium-sized companies
long term, in more fixed amounts and with a previously established interest.

3.3 CLASSIFICATION OF CREDIT BASED ON PAYMENT TERMS

a) Normal credit or commercial cash: agreed when the debtor agrees to settle it
purchased within a period of 30 days (sometimes in 60 and 90 days). It has as
the characteristic of the inexistence of an accepted interest, and it is almost never backed by titles of

credit.

b) Installment credit: it consists of dividing the due date of an obligation into several parts
with expiration dates separated by equal periods of time.

c) Fixed credit with a renewable or revolving limit: in this, a limit is set for the debtor
credit for the purchases you can make, when that limit is reached the account
closed for further acquisitions and it opens again when a
payment.

3.4 CLASSIFICATION OF CREDIT BY SUBJECT

a) Public credit: it is for the use of the State. It includes the credits granted to
government institutions, states, municipalities, and federal government.

b) Private credit: the one granted or exercised by individuals; its management and execution are
regulated by law, and governed by operational and market conditions.

c) Mixed credit: combination of the above.

Credit classification

Classification of credit activity

For the subject

In regard to the payment terms

Based on the documents that support the operation

According to its use

Public credit

Investment credit

Normal credit

Private credit

Bank and commercial credit documents

Bank credit

Installment credit

Mixed credit

Credit among merchants

Fixed credit with renewable limit

Investment credit documents

Consumer credit

4.- CREDIT POLICIES

They are conduct or action norms dictated by management and must be observed.
For all the company's staff, they must be in writing and indicate what can be done.
and what should not be done. Policies are established according to the objective of the
company and the departments, as well as the addresses that the members of the
board of directors, that is why it cannot be generalized, as examples indicate
some of them.

Time: This policy indicates the maximum time granted to clients.

Deadlines: It is the most important and one of the first policies that should be set.
the determination of the maximum and minimum deadlines must be carefully analyzed,
considering the following:

Deadlines set by other companies. The investment required in accounts receivable.

The financing resources of the credit percentage that can be financed by the
suppliers.

Discounts for early payment: To establish this policy, a percentage must be set that
attractive to customers as an incentive to purchase, this policy must be
uniform and rigid.

Volume discounts: This policy is established to increase sales.

Discounts on certain items: These discounts are made to increase the

sales of items that have low demand, are of lower quality, or are bait for
that the customer consumes others at the same time.

Purchase: Invoicing, assortment, account management, etc. represent expenses, therefore

which in many cases establishes a minimum amount for credit purchases, thinking
that each credit operation includes a profit.
Credit investigators: As a security measure, the policy will be established that
All credit applications must be investigated according to a procedure.
approved by the credit department.

Monetary interests: These interests are usually only charged in accounts that have
passed to the judicial process.

Initial credit: Initial credit refers to the credit granted to new accounts and based on
the results of the research and a percentage of the total capital declared by the
client.

Credit extensions: Increases will be established according to the payment method.

from the clients.

Cancellations: The credit may be canceled for the clients when, after having been given...
reduced on one or more occasions, they continue to make payments outside of deadlines, with check without

fund, payment of invoices in several unauthorized payments and to the customers whose debt
they stopped the legal department.

Credit policies

Conduct rules issued by the director

Observed by all personnel

In writing

Indican

What cannot be done

What can be done

Discounts on certain products

Volume discounts

Discounts for early payment

Deadlines

Purchase

Time

5.- TYPES OF CREDIT ORGANIZATION

Credit can be:

5.1 In relation to the objective

5.1.1 On comedy: It is applicable when it is not granted for financing purposes and only
A deadline is given to the client to review the invoices and prepare the payment check.
Deadlines can vary between one week and 30 days.

5.1.2 Inventory financing: This type of credit allows the debtor to make
purchases in larger quantities, when making payments in installments or over time
relatively long. The term varies between six months and three years.

5.2 Regarding the warranty

5.2.1 Personal or unsecured credit: it is applicable when compliance is guaranteed.

credit with the signature of the debtor; given their image or personal qualities.

5.2.2 Pledged Credit: It is applicable when a movable asset is specified, or endorsed in

guarantee a credit title, such as: promissory notes, bonds, certificates,
etc.

5.2.3 Documented credit: it applies when titles are issued in favor of the creditor.
credit, in which the expiration date is indicated, and they can be promissory notes or
payables.
5.2.4 Mortgage loan: it applies to collateral real estate, such as machinery
installations, buildings, land, warehouses, etc.

5.3 In relation to banking operations. The banking system provides

financing for trade and industry; through the signing of a contract of
credit opening, regulated by commercial laws, and may have the following
modalities:

5.3.1 Simple credit: It is the contract through which the bank makes available to the
creditor, a determined sum of money that the debtor withdraws in a transaction and this is
covered, in a single payment on the specified due date. The interests
generally, overdue payments are made and the credit is secured with a pledge represented by a
credit title.

5.3.2 Credit in current account: The bank makes a sum available to the borrower.
determined amount of money, that the debtor can withdraw in one or several installments, to be
covers in broken ovaries, within a specific timeframe; the interests are paid
defeated and guaranteed with press represented by a credit title.

5.3.3 Title discounts: It is the contract through which the bank advances the
expiration of titles Extended credits in favor of creditors, through which the
advance interest payment. 16

5.3.4 Equipment Lease: The bank acquires ownership of the movable goods or
properties required by the borrower and leased to this person, this type
Credit represents a novel way for the graduate as an advantage when they do not have
large amounts to invest in fixed assets.

5.3.5 Letter of credit: The bank extends credit through a letter, for an amount
determined amount of money that the debtor can collect in one or several words within
certain deadlines in the bank's subsidiaries, located in places different from the home address
debtor.

5.3.6 Credit card: The bank opens a line of credit for a specified period.
a single person, so that they can make purchases in the private companies that are
affiliated or authorized by the bank. The debtor does not pay interest if the debtor covers the
Bank within a period of 30 days on the amounts overdue by the companies
suppliers, and with the interest charged to the cardholders who make the
payments of their provisions within a period greater than 30 days.

6.- SMALL COMPANIES

The owner of a small business almost always performs all the functions by himself.
administrative functions, including credit approval; however, it may delegate
this responsibility lies with a trusted accountant or assistant.

Similarly, in a small community, the function will be entrusted to one of the

partners or will be divided among them, unless the turnover is such
large enough or there are problems so complex that they require the services of
additional personnel.

If sales volume is important or if sales are dispersed, a requirement will be necessary.

complete credit and collection organization.

7.- DISTRIBUTORS AND WHOLESALERS

The wholesaler or wholesale distributor is a component of the distribution chain, in

that the company does not contact consumers or end users directly
of their products, but rather delegates this task to a specialist. The wholesaler is a
intermediary between manufacturer (or producer) and end user that:

buy from a producer (independent or associated in a cooperative), from a manufacturer, from

another wholesaler or intermediary, and

sells to a manufacturer, another wholesaler, a retailer, but never to the consumer or user
final.

In the case of agricultural products, they buy from small farmers, group them
production, they classify, package, label... Wholesaler companies are losing
protagonism in favor of large distribution companies or associations of
retailers, who are taking on roles traditionally held by wholesalers.

8.- MANUFACTURERS

When there are many products handled, they will generally be distributed to the
long of several channels, which makes close contact difficult. They will invariably have to
take measures to accumulate and analyze credit information for processing
from customer orders, adjustments for claims and recovery of credits.

The accounts receivable system that is selected is also an important factor for
determine the size and integration of a credit organization.

9.- RELATIONS WITH OTHER DEPARTMENTS

The credit and collections department, as part of the company, cannot perform
its function isolated and without the proper relationship with other departments and activities
that make up the company, establishing the functional lines of relationship
interdepartmental, as well as the proper communication with each of them. Thus
way in which it should be organized so that the company receives the maximum benefits from the
diversity of talents and experiences of its members.

Marketing and sales

Finance and treasury

General management

Accounting

Legal

Credit and collections

Data processing

Data

Purchases

Production and services

Personal
Loading and storage

9.1 RELATIONSHIP WITH MARKETING AND SALES DEPARTMENTS

The sales department knows that a sale is not a sale until it has been collected.
import, and the credit department knows that its function should not hinder that of
sales and what the customer must retain as such.

The sales and credit and collection departments work closely together because
pursue the same goals: increase successful sales, reduce losses due to
bad and uncollectible accounts and, consequently, increase the company’s profits.

9.1.1 COLLABORATION BETWEEN THE CREDIT DEPARTMENT AND THE

SALES DEPARTMENT

The knowledge that the credit department has about the financial situation of
the clients to focus on those that present a favorable credit risk and
avoid customers who could become a source of loss from bad accounts.

Knowledge about the rotation of your customers to suggest to sales when and where
he/she must apply their sales management.

Inform the sales department about those customers with potential for consumption.
superior to that of the company and the proper fulfillment of the credit obligation. Just as
from those clients whose account is settled.

The credit and collection department often establishes close and cordial
customer relationships.

The touch and understanding with the client in the development of the collection function
contribute to maintaining cordial relationships with clients and keep them as such.

9.1.2 COLLABORATION BETWEEN THE SALES DEPARTMENT AND THE

CREDIT DEPARTMENT

The seller can inform the department about issues such as:

How the articles for sale will be used.

Condition of the customer's equipment and facilities.

Customer resource level and any recent changes.

The customer's inventory status.

Any abnormal situation such as strikes, negative comments from others

suppliers, difficulty in obtaining raw materials, etc.

Your opinion regarding the honesty and capability of the administration.

Under special conditions, the seller may obtain credit information.

MARKETING AND SALES

RELATION

1. Knowledge about the financial situation of the clients.

2. Knowledge about the turnover of their clients.

3. Inform the sales department

4.1 Those customers with consumption potential higher than that of the company

4.2 The proper fulfillment of the credit obligation.

4.3 Those customers whose account is settled

9.2 COORDINATION WITH THE FUNCTION OF THE FINANCE DEPARTMENT AND

TREASURY

FINANCE AND TREASURY

RELATION

Approval of credits.

2. Application of credit limits.

3. The collection of the portfolio and the related operations that increase and preserve.
part of the assets of the companies.

4. Continuously study economic conditions and trends.

The financial responsibilities of the credit and collections department include the
approval of credits, application of credit limits, the collection of the portfolio and the
relative operations that increase and preserve part of the companies' assets.
In order to satisfactorily carry out these tasks, it will be necessary for the department to
credit and collection continuously study the economic conditions and trends;
this way it will be in a position to provide valuable information to other segments of the
company.

9.3 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

PURCHASING DEPARTMENT

The credit staff is trained to assess the financial stability of a supplier.

as well as to obtain information about their background and capabilities.

PURCHASES

RELATION

Assess the financial stability of a supplier.

2. obtain information about their background and capabilities.

It is not enough to know that the provider of a product or service is the right one, nor that they have

with the facilities and experiences for the requested production unless the
economic stability and the reputation of the supplier have been verified satisfactorily.

9.4 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

ACCOUNTING DEPARTMENT

The cards or auxiliary customer controls are usually found in the

credit and collections department, which establishes the need for a
close collaboration with the accounting organization (accounting) for reconciliation and the
account control and the management of other similar records; also the department of
credit must account for the payments received, for the amounts obtained in payment of the
accounts, related to changes in sales, the issuance of credit notes, write-off of
bad debts, penalties for the early redemption of operations before maturity,
estimates, budget, etc.

ACCOUNTING

RELATION

Reconciliation and account control.

2. The handling of other similar records.

3. To account for:

4.1 Payments received

4.2 The values obtained in payment of the accounts.

4.3 The modifications to the sales.

3.4 The issuance of credit notes.

3.5 Penalty for uncollectible accounts.

3.6 Penalties for early termination of operations.

3.7 Estimates

3.8 Budget

9.5 RELATION OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

LEGAL DEPARTMENT

JURIDICAL

RELATION

1. It will assist in establishing and drafting the documentation and forms that contain the
legal type requirements.

2. Promote a lawsuit to recover a debt.

3. Facilitate procedures.
In some cases, account recovery must be carried out through procedures.
judicial authorities. The department or legal counsel will assist credit in establishing and drafting the
documentation and the forms that contain the legal type requirements so that in case
to file a lawsuit to recover a debt, the necessary elements should be present
necessary and the process is facilitated.

9.6 RELATION OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

SHIPPING AND WAREHOUSE DEPARTMENT

The shipping department will need to establish the relationship that allows for
The credit department guarantees the delivery of the merchandise to the customer and thus avoids the

charging some amount before making the delivery.

EMBARKATIONS AND STORAGE

RELATION

Guarantees the delivery of the merchandise to the customer.

2. Avoid charging any amount before making the delivery.

9.7 RELATIONSHIP OF THE CREDIT AND COLLECTION DEPARTMENT WITH THE

DATA PROCESSING DEPARTMENT

With the data processing department, it is essential due to the necessity that
has the credit of having a timely and smooth system to obtain relationships of
collection, customer account statements, statistics, aging reports
balances, etc.

DATA PROCESSING

RELATION

1. Have a timely and smooth system to obtain:

2.1 Collection relationships.

2.2 Customer Statements.

Credit investigators: As a security measure, the policy will be established that
All credit applications must be investigated according to a procedure.
approved by the credit department.

Monetary interests: These interests are usually only charged in accounts that have
passed to the judicial process.

Initial credit: Initial credit refers to the credit granted to new accounts and based on
the results of the research and a percentage of the total capital declared by the
client.

Credit extensions: Increases will be established according to the payment method.

from the clients.

Cancellations: The credit may be canceled for the clients when, after having been given...
reduced on one or more occasions, they continue to make payments outside of deadlines, with check without

fund, payment of invoices in several unauthorized payments and to the customers whose debt
they stopped the legal department.

Credit policies

Conduct rules issued by the director

Observed by all personnel

In writing

Indican

What cannot be done