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CREDIT POLICY CALCULATOR

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You can use our calculator for best results.

Accounts Receivables & Company Demographics:

Email Address

Average Transaction Amount

Weighted Cost of Capital or Opportunity Cost

The weighted average cost of capital (WACC) is a calculation of a business cost of a capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC Calculation. If unsure, use 8.25% as a starting point.

A business's WACC increases as the rate of return on equity increases, as an increase in WACC denotes a decrease in valuation and an increase of risk.

Actual Days Outstanding ( DSO's)

How often are Invoices Created

Number of Invoices Per Cycle

How much does it cost to produce an invoice

Research firms such as Levvel Research have noted that the average cost to process a single invoice can be up to $15.00 per invoice

Do you send out a 2^nd invoice after 30 Days.

What % of Customers get a 2^nd Invoice

Do you follow up with a Phone Call or other method to collect funds after 30 days?

What does this cost

Collection costs include the time it takes to contact delinquent accounts, correspondence and outside collection fees.

Cost of Postage & Envelope

What does it cost to process a check

Bank of America estimates the cost to process a check to be usually between $4.00 and $20.00, with a lower average of $6.00 per check.

What were your total revenues last year

What were your credit write offs last year

Targeted Gross Margin

Do you have a Lock Box

What do you pay on average to enter data from the Lock Box per invoice/transaction

Typical charges are 1 cent per key stroke

Annual Lockbox Costs

What does it cost you to Credit Risk a single customer

Cost to perform annual credit valuations on each customer varies by business, a good number to use is $25.00 which includes credit reports and the time analyzing the accounts ability to pay.

Percentage of Repeat Customers

Current Terms Offered i.e. Discount % if paid within x days:

What % of payments were made within Discount Period

Estimated Effective Rate for Credit Cards

Credit Card Effective Rate equals the Total Credit Card Fees/Credit Card Volume.

ACH per Transaction Fee

Typical fees range from 0.40 to 0.65 per ACH Transaction.

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