For Georgia businesses extending credit to other companies, a structured credit policy is essential. A strong policy supports predictable cash flow, reduces risk of bad debt, and aligns with efficient receivables management. This article guides Georgia commercial enterprises and AR managers in developing a formal business-credit policy tailored to the state’s unique business and legal environment.

Georgia’s Business & Credit Environment

Georgia’s economy features a substantial small-business sector. Because of this According to the U.S. Small Business Administration (SBA) state profile, more than 99.7 % of Georgia businesses are small enterprises. UGA Small Business Center+2Office of Advocacy+2 In addition:

• In 2024, 42 % of Georgia small employer firms applied for loans, lines of credit or merchant cash advances. Federal Reserve Bank of Atlanta
• Georgia operates the State Small Business Credit Initiative (SSBCI) (via the Georgia Department of Community Affairs) to strengthen business lending. Georgia Department of Community Affairs+1

These data imply:

• Many Georgia businesses rely on credit (self or from lenders).
• Strong competition and rapid business formation (and turnover) means credit risk must be carefully managed.
• Business-to-business credit policy is critical to controlling receivables from trade counterparties.

Common AR & Credit-Extension Challenges

When a Georgia company extends credit to other businesses, typical issues include:

• Inconsistent credit evaluation: Without standard criteria, one client may receive favorable terms while another with similar profile receives weaker ones.
• Lack of formal documentation: Verbal terms or unchecked purchase orders lead to misunderstandings and slower enforcement.
• Aging receivables and cash-flow risk: Uneven payment patterns or late payments weaken working capital. The SBCS found 49 % of firms reported uneven cash flow in Georgia. Federal Reserve Bank of Atlanta
• Industry/regional volatility: Georgia’s sectors such as logistics, manufacturing, and agriculture face cyclical risks, which affect trade-credit counterparties.
• Enforcement timing: Without triggers and escalation procedures, delinquent accounts may grow beyond manageable limits.

A formal credit policy addresses these challenges by setting uniform rules for extension, monitoring, escalation, and documentation.

How a Professional Agency Supports Credit Policy & Collections

Working with a professional collections partner enhances the effectiveness of your policy. In Georgia, a commercial-debt-collection agency offers:

• Policy support: Advising on escalation terms, aging triggers, and credit-limit reviews.
• Early intervention: Hand-off of delinquent accounts at pre-defined aging (e.g., > 60 days) reduces losses.
• State-specific enforcement: Familiarity with Georgia statutes (e.g., limitations on contract claims) expedites collection strategy. For example, Georgia’s statute of limitations for written contract claims is six years under O.C.G.A. § 9-3-24. Justia Law+1
• Data feedback: Reporting trends (industry, region, counterparty size) that enable refining your policy.
• Risk management: Therefore Lowering days-sales-outstanding (DSO) and bad debt write-offs, thus improving working capital and financial stability.

By embedding your policy with external support, you move from reactive collections to proactive receivables management.

Georgia-Specific Considerations for Your Credit Policy

When developing a credit-policy framework for Georgia operations, consider the following state-specific factors:

4.1 Legal limits for contract enforcement

• Under O.C.G.A. § 9‑3‑24, claims on written contracts must be filed within six years from the date of breach. Justia Law+1
• Under O.C.G.A. § 9‑3‑25, claims on oral contracts or “open accounts” are subject to a four-year limitation period. Justia Law+1
• Therefore, your credit-policy documentation should insist on written terms to maximize your enforcement window.

4.2 Business climate and turnover

• Georgia sees significant openings of establishments: between March 2023 and March 2024, 41,761 establishments opened in Georgia. Office of Advocacy
• A dynamic business formation and closure rate means that credit risk may shift rapidly—newer businesses may pose higher payment risk.
• The credit policy should therefore include short-term status checks for newly formed clients (e.g., under 3 years old) and more frequent review cycles.

4.3 Industry-specific risk profiles

• Georgia hosts strong sectors like transportation/logistics (Atlanta hub), manufacturing, agribusiness and construction. Risk profiles differ: e.g., construction may have longer payment cycles and more sub-contractor risk.
• Your credit policy should segment counterparties by industry and apply different terms or limits accordingly (e.g., stricter limits for construction firms, longer payment terms for agribusiness with seasonal cash flows).

4.4 Monitoring macro-financial conditions

• According to the 2025 Georgia SBCS brief, 75 % of firms reported increased costs of goods/services/wages; 56 % reported difficulty paying operating expenses. Federal Reserve Bank of Atlanta
• These pressures highlight the need for tighter credit terms and accelerated monitoring in a rising-cost environment.

4.5 Use of state programmes & resources

• The Georgia SSBCI programs offer credit-guarantee and participation initiatives. Georgia Department of Community Affairs+1
• Although tailored for lending, such programmes signal the importance of credit risk oversight in the state. Your credit policy can reference state-resources and encourage counterparties to be transparent with financials.

Sample Framework: Credit Policy for a Georgia Commercial Enterprise

Here is a structured template you can adapt for Georgia B2B operations:

A. Purpose

To establish uniform rules for granting credit to business customers in Georgia, minimise receivables risk, and reinforce collections discipline.

B. Credit Approval Criteria

• Minimum business operating history: e.g., 2 years (for new businesses <2 years require stricter limits)
• Reviewed financial statement within last 12 months
• Credit-report or trade-reference score meets defined threshold
• Verification of entity status via Georgia Secretary of State (active good standing)
• Industry risk classification (assign internal risk grade)
• Assign clear credit-limit based on risk grade and industry segment

C. Terms & Conditions of Payment

• Standard terms: Net 30 (or Net 45 for approved low-risk clients)
• Next, Offer Early-payment discount (e.g., 2 %/10 Net 30) if applicable
• Late-payment interest or fee provision (Georgia law compliance)
• New customers under 2 years: purchase-order only until 2 on-time payments received
• Written credit-application form must be completed & signed, including acknowledgment of terms

D. Monitoring & Review

• Generate monthly aging reports (0-30, 31-60, 61-90, >90)
• For accounts > 30 days past due: issue “watch” status, suspend new shipments
• Credit-limit reevaluation annually (or when account passes 60 days past due)
• Internal “credit hold” trigger: any account exceeding limit or > 60 days past due

E. Escalation & Collections

• Day 31-60: Internal collection calls and written reminder
• Day 61-90: Final demand letter mailed; account placed on delivery hold
• Day 91+: Refer to Georgia-based commercial collection agency; consider legal action (note statute of limitations)
• Documentation: Collection status documented in CRM/legal file

F. Roles & Responsibilities

• Sales: Obtains signed credit-application form and terms sheet
• Credit Department: Reviews application, assigns risk grade/limit, documents approval
• AR Manager: Monitors aging, triggers holds, escalates delinquent accounts
• Legal/Collections: Coordinates external referrals and enforcements in Georgia

G. Documentation & Policy Maintenance

• Maintain written credit-application, terms & conditions, invoices, account correspondence
• Ensure all approvals are documented (date, approver, limit, special terms)
• Annual policy review (version control) and update as needed based on economic/industry changes
• Train staff (Sales, AR, Credit) on policy and Georgia-specific considerations

For Georgia-based companies, implementing a formal business credit policy is not just good practice—it’s essential for controlling risk, improving cash flow, and strengthening collections outcomes. Above all when crafted with state-specific factors in mind—and supplemented by a trusted Georgia commercial-debt-collection partner—the policy becomes a strategic asset. The next step: draft your credit-application form, establish risk grades, define escalation triggers, and align your internal processes with those escalation pathways.

References

• U.S. Small Business Administration, “Georgia 2025 State Profile.” – SBA Office of Advocacy. Office of Advocacy+1
• Small Business Credit Survey: Georgia Insights (2025). Federal Reserve Bank of Atlanta
• Georgia Department of Community Affairs, State Small Business Credit Initiative (SSBCI) documents. Georgia Department of Community Affairs+2Georgia Department of Community Affairs+2
• Georgia Code Annotated § 9-3-24 (written contracts statute of limitations). Justia Law
• Georgia Code Annotated § 9-3-25 (oral contracts/open accounts statute of limitations). Justia Law