Most overdue invoices are not accidents. They are the predictable outcome of credit decisions that were made without a clear policy, a vetting step, or enforceable terms behind them. By the time an account reaches commercial debt recovery, the cash is already at risk and the relationship is already strained. Credit management is the work that happens upstream of all of that — the policy, the paperwork and the checks that decide who you extend credit to, on what terms, and up to what limit. Done well, it stops bad debt before it starts, and it is almost always cheaper than the recovery it prevents.

Prevention beats recovery on every measure that matters: cost, cash flow, time, and the goodwill of the customers you actually want to keep. Merion sees the far end of that equation every day — the accounts that go wrong and why — so we design credit systems around the failures we watch unfold, not around theory.

What's included

A credit management engagement is shaped around where your current process is weakest. Most include several of the following:

Credit policy design — a written policy that sets out who qualifies for credit, on what terms, up to what limit, and exactly what happens when an account falls overdue, so decisions stop being made ad hoc.
Terms of trade review — checking your trading terms for the gaps that defeat recovery later: missing late-payment and interest clauses, weak retention-of-title, and unenforceable guarantee mechanics. Our credit terms calculator helps you model the cash-flow effect of the terms you set.
Credit applications and guarantees — a commercial credit application that captures ABN/ACN, directors' details, trade references and the requested limit, and binds the customer to your terms — with a personal or director's guarantee where the exposure warrants one.
Credit checks — knowing what to look up before you say yes. We integrate commercial credit reports and reference verification into the decision so you are not extending credit blind.
Credit limit setting — a consistent method for deciding how much credit each customer gets, and when to review it, rather than defaulting to whatever they ask for.
Customer onboarding — folding the application, the checks and the limit into a single repeatable onboarding workflow so every new account starts on the same sound footing.
Ongoing monitoring — watching ageing, limit breaches and early warning signs so a slipping account is caught while it is still recoverable, which sits naturally alongside receivables management.

How it works

A typical engagement moves through a few clear stages:

Review. We look at how you currently grant credit — your application, your terms of trade, your limits and your write-off history — and identify where bad debt is entering the business.
Design. We draft the policy, application and vetting steps that close those gaps, in plain language your team can actually apply, working alongside your solicitor where formal legal advice is needed.
Implement. We embed the new process into your onboarding so credit checks, limit setting and terms acceptance happen the same way every time.
Monitor and refine. We help you set the ageing reviews and early-warning triggers that flag trouble early, and adjust the policy as your customer base changes.

Why Merion

Most credit advice comes from people who have never had to recover the debt. We have. Because Merion sits at the recovery end of the process, we can tell you exactly what causes commercial bad debt — the missing guarantee, the limit that crept up unchecked, the terms that turned out to be unenforceable — and we design your policy to remove those failure points. Our advice is practical and compliant: we keep your process firmly within the debt collection laws in Australia and the ACCC and ASIC guidance, so the system you build is one you can stand behind. For a working walkthrough of the day-to-day discipline, see our credit control playbook, and learn to read trouble early with the signs your debtor is in financial trouble.

A single avoided bad debt usually more than pays for the credit review that prevented it. Tightening your terms and vetting customers properly is the highest-return work in the entire credit cycle — and the only part that costs you nothing once it is in place.

Common questions

Do I really need a written credit policy if I am a small business?

Yes — arguably more so. Smaller businesses feel a single bad debt harder, and an informal "we'll sort it out" approach is exactly what produces inconsistent decisions and unpaid invoices. A short, clear policy is enough.

What is the difference between credit management and receivables management?

Credit management is the upstream work — deciding who gets credit and on what terms. Receivables management is the downstream work of collecting what is owed once the credit is extended. The two work best together.

Can you rewrite my terms of trade?

We review your terms, identify the gaps that cause recovery problems, and recommend improvements in plain language. Where changes need to be legally drafted or signed off, we work alongside your solicitor.

How do I decide a customer's credit limit?

It comes down to verified information and your own risk appetite — the customer's credit history, trade references and your exposure if they don't pay. We help you set a repeatable method rather than guessing. Our interest calculator and days overdue calculator help quantify the cost of getting it wrong.

What if an account still goes overdue after all this?

Good credit management reduces bad debt; it does not promise zero. When an account does slip, you'll have the documentation and guarantees to recover it cleanly — see how to chase an unpaid invoice in Australia and the recovery process.

Want to reduce late payment at the source?Refer a debt or request a quote — your first conversation with Merion is obligation-free.

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Prefer to talk it through first? Book a free debt appraisal, request a quote, or contact us.

Credit Management Consulting