Build a credit application form

When to run this

Run this play with a client that opens credit accounts on the strength of an email and a verbal agreement, with no signed document underneath. The credit application is the keystone of front-door credit control: a single form that, done well, captures who the customer legally is, secures their agreement to the terms of trade, takes any guarantee, and gathers the trade references and details needed to assess risk. Without it, every later protection — terms, guarantees, even knowing the right entity — rests on thin air.

It is the document that ties the prevention plays together, which is why a client with no credit application usually has gaps everywhere else too.

The play (steps)

Help the client design a credit application that does real work — with the binding legal elements drafted by a lawyer:

1. Capture the legal identity. Collect the exact entity name, ABN or ACN, and trading name, so credit is extended to the right party.
2. Gather assessment information. Ask for trade references and the details needed to run checks and set a limit.
3. Bind agreement to terms. Include acceptance of the terms of trade, so signing the form means agreeing to the terms before any supply.
4. Incorporate the guarantee. For company customers, include a personal guarantee section to be signed at the outset.
5. Require a signature. Make a completed, signed application a condition of opening any credit account.
6. Get the legal parts drafted. Have the terms-acceptance and guarantee sections drafted by a lawyer so they are enforceable.

What good looks like

A strong credit application means that before any customer is supplied on credit, the business holds one signed document that pins down the legal entity, records agreement to the terms, captures any guarantee, and supplies the information needed to assess and limit the account. Every credit relationship therefore starts on a firm, documented footing. If an account is ever referred, the application is the single file that proves who agreed to what — assembled, as it should be, at the one moment it is easy to obtain.

What to say to the client

Position it as the one form that does everything: “A proper credit application is the single most useful piece of paper in your credit control. One signed form tells you exactly who you're dealing with, locks them into your terms, takes the director's guarantee, and gives you what you need to check them. Skip it and everything else you try to do later is built on sand.”

If the client is setting this up now but has older accounts that were opened without one, those undocumented debts can still be pursued — route them through refer a debt while the new process beds in.

Common mistakes

The first mistake is having no application at all, leaving every account undocumented. The second is a form that collects contact details but does not bind the customer to the terms or take a guarantee, so it gathers information without creating protection. The third is using generic, unreviewed legal wording for the terms-acceptance and guarantee sections, which may not hold when tested. Capture identity, bind the terms, take the guarantee, and have the legal parts drafted properly.