1. Purpose

  • The purpose of this Policy is to outline procedures for:
    • Opening new customer credit accounts and establishing customer credit limits
    • Reviewing and varying customer credit limits; and
    • Outlining the collection process from customers for goods sold on credit.

2. Scope

  • 2.1 Invoices under $5,000 – invoiced in full before the commencement of the job. Payment is required upfront and prior to any work being completed.
  • 2.2 Invoices over $5,000 – deposit for 50% of the estimated final invoice is sent, payment required before work commences. Balance due before release of any goods or services.
  • 2.3 Trade Accounts – Customers that spent over $5,000 per month are eligible to apply for a trade account. All new customers must submit a credit application form and be approved prior to any trading terms being offered.

3. Purchase orders

  • 3.1 If purchase orders are required, this information must be provided at the time of quote acceptance.
  • 3.2 Please send all purchase orders via email to accounts@emroy.com.au.
  • 3.3 Additional identifying information may be added after an invoice is generated by emailing the accounts team.

4. Procedure to open a new account:

  • 4.1 All new customers must complete a credit application (Credit Application) in full.
  • 4.2 The accounts team will review the customer’s credit worthiness by obtaining a credit report from an accredited provider for all accounts in excess of $20,000 credit limit.
  • 4.3 The customer’s trade references, as detailed in the customer’s Credit Application, will be checked.
  • 4.4 Any credit terms greater than $10,000 require a personal guarantee to be signed.
  • 4.5 If the credit limit has been reached or exceeded, all orders will be placed on hold until the account has been paid in full.

5. Key factors in determining credit worthiness

  • 5.1 The following factors when determining a customer’s credit worthiness:
    • completed credit application;
    • full compliance with our terms and conditions of trade by the customer;
    • registration of business;
    • favourable trade references (at least 2, preferably 3);
    • length of time in business; amount of credit requested; validation process though accredited credit provider.
  • 5.2 If the customer refuses to sign a Guarantee, the account is referred to the director for written approval to open without guarantee.

6. Relevant changes to existing customers

  • 6.1 If a Relevant Change occurs with respect to an existing customer, a new Credit Application will be sent to the customer to complete in full and return to our account department, in which case the procedure for new customers outlined in clause 3 of this Policy will apply.
  • 6.2 The Relevant Changes are:
    • increase in credit limit;
    • change of owner;
    • change of directorship;
    • change of trading name;
    • any other circumstance determined by the director or accounts team.
  • 6.3 If necessary, the accounts team may close the customer’s account upon the Relevant Change occurring.

7. Collection of overdue accounts

  • The following table outlines the actions that may be taken by accounts with respect to overdue accounts:
No. of days overdue
Action
1-2
Accounts may be put on hold. If account is on hold, accounts may offer customers ‘payment before delivery’ account after appropriate discussions between accounts and sales teams.
2-21
Accounts and sales team to follow up payment with customer.
21-30
Customer to be issued with a letter of demand from AWF requiring payment within 7 days. Accounts team to reconsider credit limit.
30+
Matter referred to recovery team for legal review. Trade account subject to closure.