42 Credit risk management

42.1 Introduction

A company runs credit risk when it gives credit: it runs the risk of the creditor not paying off its debts. LedgerSMB features two ways to manage the risks involved:

  1. 1.

    Limit management

  2. 2.

    Arrears management

The former tries to limit the risk involved by making sure no customer receives more credit than a certain limit while the latter tries to make sure any over due payments get cashed.