• No School
  • AA 1
  • 3

This preview shows page 1 - 2 out of 3 pages.

GROUP 5 Date: 12 th June 17 Credit terms and conditions of Sale have components of Credit Terms Factors effecting credit terms Conditions of sale Types of credit terms Cash discounts Late payment interest Progress payments Retentions Consignment accounts Methods of Payment. Credit means receiving something of value now and promising to pay for it later, often either with the fee or without the fee and Credit terms are generally the agreement between a seller and buyer that lists the elements such as the timing, amount of payments the buyer will make in the future and so on. Credit is involved in trading for a range of reasons as it simulates sales that lead to execution, and then growth between parties of buyer and seller. Besides, offering credit could add value to the relationship between seller and buyer, simultaneously, promote customer loyalty and encourage recurring sales. However, granting credit involves both benefits and costs for the seller. If Sales on credit takes place between buyer and seller, credit terms are the most important as the terms of credit on offer are the hub of the contract. Basic credit terms stated could be total credit amount, repayment plan, discount for cash or early payment, the amount or rate of late payment penalty and so on. But, if credit terms are not considered from all different perspectives, it could be costly for the business for the fact that most businesses operatein a competitive environment, where attention to every aspect of trading is vital to success or even survival. A number of factors can influence the choice of credit terms, subject to means of the trade or product. To name a few, the seller’s strength in the market, the credit terms that the seller gets from the suppliers, the availability of the capital needed to finance sales, the volumes of sales and the range of customers, the profit margin, any special payment arrangements, Competitive pressures, the character of the market and so on.
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 3 pages?

  • Fall '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors