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When to ask for an updated credit application

Thea Dudley


Dear Thea,

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How often should I ask for an updated credit application? I have asked several credit managers, and everyone has a different opinion. My salespeople think we should never ask because we already have one. Who is right?

— Giving Credit Where Credit is Due

Dear Credit Giver,

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Occasionally, after a hard day of “crediting” I like an Old Fashioned. I sit down at the bar and place my order, anticipating the beautiful creation. I like my Old Fashioned classic— shimmering amber color, Luxardo maraschino cherry, slightly smoked orange peel, and one lovely large, shaped ice cube served in the proper glassware. Depending on the establishment, what actually gets placed in front of me is a matter of opinion and up for debate.

Same goes with the updated credit application request. What the expectation is and time frame of the request depends on your company. The topic should be part of your overall best practices discussion and included in your credit policy manual. Once you have a decided what is the best practice for your company, implement it and educate the rest of the company on it.

Most credit managers I know have an opinion and logic behind it based on their experiences and company comfort level. Dear Credit Giver, this is my opinion, not an industry standard as, frankly, there really isn’t one. It is an opinion determined by experience and company input.

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Five years works for me. Barring any changes to the company structure/ownership, that should suffice. When that happens, game off and we will need an updated one. I know credit managers who require them every two years. That seems aggressive and a customer irritator to me, but if that floats your boat, party on, Wayne.

I can review a customer account with a credit report (or a couple of them), with the Secretary of State, and with payment history with my company. No need to even tip off anyone the account is under a yearly review process. When the five-year mark rolls around, the customer and I have a conversation and we get the updated app. Five years enables me to present it as a reasonable request and not make the customer feel as though they are lucky we are selling to them (although, let’s be honest— some of them should feel that way, but that is another discussion).

There will be exceptions. Every rule seems to have one, so if a business decision pops up, voice your opinion. You may be in agreement, document it, then move on.

Like most things in business, there is no right or wrong. There is a difference of opinion. Your role is to keep your AR healthy, which includes making sure you have correct information.

Some people are okay with Old Fashioned variations, muddled orange wedge and maraschino cherry, fruit salad in a glass. That’s cool, opinions vary. Just remember who is accountable to swallow what is served up. Figure out what works for you.


With more than 30 years of credit management experience in the LBM industry, Thea Dudley consults with companies on a wide range of credit and financial management issues. Contact Thea at

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