359824910-170609-credit-terms-and-conditions-of-sale-assignment-docx.docx

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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.
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