SME credit policy: the 8 rules to write down on credit lines, payment terms and reminders

In brief: a credit policy is a short document that sets out how your company grants, monitors and recovers credit from customers: who approves a credit line, which checks to run first, which payment terms to offer each risk band, when to send reminders and when to stop deliveries. In an SME without a credit department, eight rules on one or two pages are enough. They serve to decide quickly, to say no without debating every time, and to demonstrate an adequate structure under article 2086 c.c. (Italian Civil Code).

Why does an SME need a credit policy?

Because without rules the credit line is decided by whoever is in a hurry to close the order. Sales wants the customer, administration wants to collect, the owner decides case by case. A written policy moves the discussion from 'do I trust them?' to 'does it fall within the rules?'.

There is also a legal reason. Article 2086 c.c. requires the entrepreneur operating in a company or partnership form to have an organisational, administrative and accounting structure adequate to the nature and size of the business, including to detect a crisis early. The Business Crisis Code (Codice della crisi, article 3) adds that these structures must allow economic and financial imbalances to be detected. Receivables from customers are often the largest item in an SME's assets: governing them with written rules is part of that structure.

The 8 rules to put in writing

1. Who decides and up to what amount

Specify who may grant a credit line and up to what amount. Example: the sales manager up to €5,000, administration up to €30,000, above that the owner decides. You choose the figures based on your revenue; what matters is that they are written down.

2. Which checks before the first order

The details of the checks on a new customer are in the guide on assessing the creditworthiness of a new B2B customer.

3. Payment terms by risk band

Link the customer's risk class to the terms, so that nobody has to invent them:

How to read the class: company credit score. How to set the amount: credit limit.

4. Maximum terms and contract clauses

Legislative Decree 231/2002 sets the statutory term at 30 days. Between businesses you may agree a longer one, but beyond 60 days it must be expressly agreed, proven in writing and must not be grossly unfair to the seller (article 4). If you are an SME and the customer is not, a clause beyond 60 days is presumed grossly unfair (article 7, para. 4-bis). Write into the policy the maximum term you accept and the clauses that the contract or general terms must always contain: term, late-payment interest, retention of title if you sell goods, competent court.

5. When to review the credit line

For example: with every new financial statement filed, with every order above the credit line, at the first delay beyond 30 days, when the customer's shareholders, directors or registered office change.

6. The reminder schedule

1. Polite reminder a few days before the due date, for new customers or those with past delays.
2. First reminder a few days after the due date, with a copy of the invoice.
3. Phone call from the owner or administration at 30 days.
4. Written formal notice (diffida) by PEC requesting late-payment interest and the €40 flat fee under article 6 of Legislative Decree 231/2002.
5. Handover to a lawyer or debt recovery at a date you set in advance, not when you get angry.

7. When to stop deliveries

Decide the threshold in advance: for example overdue beyond 60 days or exposure above the credit line. If the customer's financial situation makes payment clearly at risk, article 1461 c.c. allows you to suspend performance, unless adequate guarantees are given to you. Always document the facts you rely on.

8. Who checks and how often

Once a month look at three figures: overdue receivables by delay band, top ten customers by exposure and DSO. If one of the three worsens for two months in a row, the policy must be applied more strictly.

A template to copy

You can start from this outline and adapt the figures:

• Scope: applies to all sales with deferred payment.
• Owners: [name] up to [amount]; [name] up to [amount]; above that, the owner.
• Checks: below [threshold] negative events and anti-fraud check; above [threshold] full report; above [high threshold] also financial statements and monitoring.
• Terms: table of risk bands → payment terms, down payment, guarantee.
• Maximum term: [days], unless the owner gives a written exception.
• Credit line review: new financial statements, order above the line, delay beyond [days], corporate changes.
• Reminders: schedule at [days] from the due date.
• Stopping deliveries: overdue beyond [days] or exposure above the credit line.
• Monthly check: overdue by band, top 10 exposures, DSO.

If you have little time, start with the guide on deciding a customer's credit line in 10 minutes and the general overview of commercial credit risk.

Sources

• Italian Civil Code (Codice civile), art. 2086 and art. 1461 (Normattiva)
• Legislative Decree (D.Lgs.) 14/2019, art. 3 (Normattiva, accessed 11/11/2026)
• Legislative Decree (D.Lgs.) 231/2002, arts. 4, 6 and 7 (Normattiva, accessed 11/11/2026)