Credit and Collections is two-fold:

Credit Analysis: Establishing appropriate credit policies and collection procedures is vital to the success of any business. You must decide what types of credit to offer, or even if offering credit is right for your business. Your decision on whether to extend credit to your clients won’t involve a lot of complex analysis. It’ll be based mostly on good common sense such as financial stability, previous payment history and credit score. If the benefits of offering credit, such as increased sales, outweigh the costs of offering it, such as the risks and costs of nonpayment, you should offer it. If not, you shouldn’t.

Collections: The primary job of the person responsible for collections is to collect the money as close to the terms of the obligation as possible. Good business requires that collection of invoices be made promptly and without any damage resulting to the customer relationship.  As with a credit policy, collection practices must be flexible.