Accounts Receivable

Customer Credit Analysis Template

Evaluate creditworthiness of new or existing customers. Assess ability to pay and establish appropriate credit terms and limits.

How to use this template

1

Gather customer information

Collect company information: industry, size, years in business, public vs. private. Obtain financial statements if available.

2

Analyze financial statements

Review customer's balance sheet, income statement, and cash flow. Calculate liquidity ratios, leverage ratios, and profitability metrics.

3

Check credit history

Obtain credit report from agency (Dun & Bradstreet, trade credit). Review payment history, bankruptcies, liens, or legal judgments.

4

Assess payment capacity

Evaluate customer's cash flow adequacy to pay proposed orders. Consider existing debt obligations and seasonal cash flow patterns.

5

Recommend credit terms

Based on analysis, recommend credit limit, payment terms (net 30/60/90 days), and any security requirements (personal guarantee, collateral).

Why use this template

  • Minimizes credit risk and bad debt losses
  • Enables appropriate credit limits based on customer creditworthiness
  • Supports collection and dispute resolution
  • Reduces working capital needed to fund receivables

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