Comprehensive Credit Policy – Short Cash & Company Credit Customers

Change Management

Date	Version	Author	Change Details

Approvals

Approved By	Name	Date	Signature
Sales Director	Mr. Ainul Haq
AR Accountant	Mr. Loynish
Senior Accountant	Mr. Naveen
Finance Manager	Mr. Sadikh
General Manager	Mr. Fadi

Policy Overview

This policy defines the rules and procedures for granting, reviewing, monitoring, and revoking customer credit to ensure effective risk management, consistent practice, and support for business growth.

Scope & Objectives

Applies to all credit sales across Abu Dhabi, Al Ain, and the Western Region.

Objectives:

Prevent bad debts
Standardize credit processes
Ensure transparent approvals
Enable SAP integration

Definitions & Abbreviations

SM – Salesman; SP – Supervisor; CM – Channel Manager; SD – Sales Director; AR - Accounts Receivable Accountant; FM – Finance Manager; GM – General Manager; MD – Managing Director; KYC – Know Your Customer; ERP – Enterprise Resource Planning; SOA – Statement of Account; O/S – Outstanding.

Customer Classification & Credit Types

Customer Categories:

Traditional Trade (TT): Groceries, Traditional Eateries
HORECA: Hotels, Restaurants (Fast Food, Fine Dining, Casual Dining), Catering
Modern Trade (MT): Hypermarkets, Supermarkets
E-commerce: Online Outlets
Wholesale (WS): Semi/Wholesalers
Mini Market: Self-Service, Convenience & Grocery (C&G)

Credit Types:

Cash (default first 3 months)
Short Cash (limited credit)
Company Credit (based on agreement)

Eligibility & Documentation Requirements

Required Documents:

Trade License
TRN
ID/Passport (Owner) applicable for short cash customer
Bank Signatory (Power of Attorney) – POA (Optional)

Additional for Company Credit: Signed Agreement.

Credit Limits and Approval Authority

Refer to Approval Workflow (Short Cash / Company Credit), DoA Matrix, and Channel-specific thresholds, (For existing customers credit terms will remain same and will be reviewed bi-annually.

Billing, Invoice & Route Compliance

Stamped invoice must be submitted same day
Failure = Customer blocked
Short Cash Declaration required by 15th monthly
Late submission = Salesman blocked by CM

Cheque Handling Policy

Bounced cheques (insufficient funds / Closed account) = immediate block
Reinstatement only with bank guarantee

Blocking & Reinstatement Rules

A. Short Cash

Breach = automatic block
Payment delay more than 15 days above credit terms, Customer will be converted to pure cash.
Reinstatement requires full payment realization and DoA approval
3+ violations = permanent cash
Any invoicing to blocked customer required DoA approval

B. Company Credit

Breach = automatic block / Manual Block
Reinstatement requires full payment realization subject to point no B(3)
Payment delay more than 45 days above credit terms, DoA approval required for credit facility
Any invoicing to blocked customer required DoA approval

Dunning Process & Timelines (Company Credit)

0: Due Date: System Generated Email to customer
+5: Reminder follow-up: System Generated Email to customer
+15: Sales call: E-mail from sales
+30: Customer meeting: E-mail from Sales + meeting with customer by Sales.
+60: Escalation: E-mail from Finance Manager to Sales Director and General Manager

SAP Integration Notes

All workflows and approvals to be embedded in SAP
Includes blocking/unblocking, monitoring, and reporting

Appendices

Appendix A: Short Cash Customer Rules & Approvals

	Rule	Approval / Note
New Customer	Cash only for first 3 months; credit requires DoA approval (SOA required)	As per the approval matrix
Short Cash	As per the approval matrix	As per the approval matrix
Reinstatement	As per the approval matrix	As per the approval matrix
Invoicing blocked customer	As per the approval matrix	As per the approval matrix

Appendix B: Company Credit Rules & Approvals

	Rule	Approval / Note
New Customer	Min volume required to qualify (Revenue per Month > AED 7,500)	As per the approval matrix
Credit Term Breach	Repeat breach = restriction	As per the approval matrix
Unblocking	Allowed after payment is credited	As per the approval matrix
Reactivation	Requires DoA approval	As per the approval matrix

Appendix C: Approval Matrix – Without Agreement

Category	Credit Term	Credit Limit	Requestor & Review	Approval	Review	Final Approval
Groceries	30 days	2,000 AED	SM/SP	CM → SD	AR	FM → GM → MD
Mini Market	30 days	7,500 AED	SM/SP	CM → SD	AR	FM → GM → MD
Supermarkets	30 days	9,000 AED	SM/SP	CM → SD	AR	FM → GM → MD
Hypermarket	30 days	15,000 AED	SM/SP	CM → SD	AR	FM → GM → MD
HORECA	15 days	12,000 AED	SM/SP	CM → SD	AR	FM → GM → MD
Wholesaler	7 days	20,000 AED	SM/SP	CM → SD	AR	FM → GM → MD
Traditional Eateries	30 days	5,000 AED	SM/SP	CM → SD	AR	FM → GM → MD

Appendix D: Approval Matrix – With Agreement

Category	Final Approval
OP – HORECA	CM → SD → FM → GM → MD
MT – Supermarket	CM → SD → FM → GM → MD
MT – Hypermarket	CM → SD → FM → GM → MD
TT – Any Company Credit	CM → SD → FM → GM → MD

Appendix E: Authority Matrix Based on Credit Limits (Short Cash)

Limit	Approver
Up to 10,000 AED	Sales Director
>10,000 – 25,000 AED	Finance Manager
>25,000 – 200,000 AED	General Manager
>200,000 AED	Managing Director

Appendix F: Authority Matrix Based on Credit Limits (Company Credit)

Limit	Approver
7,500 - 10,000 AED	Sales Director
>10,000 – 25,000 AED	Finance Manager
>25,000 – 200,000 AED	General Manager
>200,000 AED	Managing Director

If any new customer needs to be created as an exception in company credit category with less than 7,500 monthly revenues, need approval from General Manager.