Business credit policy – credit checks, credit limits and B2B invoices

A B2B credit policy outlines how a company assesses customer risk, determines credit limits, and follows up on unpaid invoices. It provides the sales and finance departments with shared ground rules for when a business customer may pay after delivery instead of in advance.

What is a credit policy?

It is an internal instruction for credit sales: which customers are allowed to purchase on invoice, what documentation must be collected, who grants credit, and what measures are taken if a customer fails to pay on time. The policy should be supplemented by a register of credit decisions, assigned limits, outstanding invoices, and upcoming reassessments.

What elements should a credit policy contain?

How to perform a credit assessment of a business customer

1. Identify the customer. Verify company information, the contracting party, and the invoice recipient.
2. Assess exposure. Estimate the value of open orders, invoices, and expected deliveries before payment is received.
3. Collect relevant supporting documentation. Use permissible and proportionate information regarding the customer’s payment history and finances.
4. Determine terms. Choose, for example, advance payment, shorter payment terms, a credit limit, or other risk management strategies.
5. Make and document the decision. Note the amount, person responsible, date, justification, and follow-up date.
6. Monitor the customer. Review overdue receivables, limit breaches, and changes in risk level.

How does a credit limit work? A calculation example

Assume the customer’s approved credit limit is 100,000 SEK, open unpaid invoices amount to 70,000 SEK, and a new order of 45,000 SEK is to be invoiced. The company’s total projected exposure would then be 115,000 SEK, which exceeds the limit by 15,000 SEK. The company may need to request partial payment, reduce the credit portion of the order, or make a specific decision regarding a temporary exception.

The example is based on assumed amounts. The policy must explicitly state which orders, invoices, and amounts are included in the limit.

Payment terms between companies – what does the Interest Act say?

Section 2a of the Interest Act (1975:635) contains special rules regarding payment times for claims on goods and services between businesses. The starting point is payment no later than 30 days after the payment demand; later payment between businesses may be possible if the creditor has explicitly approved it. It is therefore misleading to claim that all B2B invoices must always have exactly 30-day payment terms.

The Interest Act also contains provisions on penalty interest, including in sections 3–6. Regulate invoicing and the reminder process with consideration for applicable agreements and law. For help with invoice content, read the guide on invoice details.

GDPR and credit reporting – what do companies need to keep in mind?

Processing of personal data may be relevant, for example, when assessing the credit of sole proprietorships or when personal data is registered regarding contact persons and representatives. The Swedish Authority for Privacy Protection (IMY) describes how the Credit Reporting Act and GDPR interact, including special protection rules for data concerning private individuals. A credit policy does not automatically grant the right to collect or store any personal data. Specify the purpose, authorizations, and how long personal data needs to be retained.

Checklist before deciding on business credit

• Has the customer been identified and verified?
• Is the decision basis current and relevant?
• Is the credit amount compatible with the company’s risk appetite and liquidity?
• Is there an established decision mandate for the proposed limit?
• Are payment terms documented and compatible with law and agreements?
• Has a date for the next credit review been specified?
• Are there procedures for late payments and limit breaches?

Common mistakes to avoid

• No reassessment: the limit remains despite a worsened payment history.
• Unclear exposure: open orders are not counted when the customer has unpaid invoices.
• Exceptions without accountability: salespeople increase credit limits without a documented decision.
• Disproportionate data collection: personal data is processed without sufficient support or a clear purpose.
• Unclear payment terms: the customer agreement, invoice, and policy state different things.

Common questions about B2B credit policies

Is it law that all companies must have a credit policy?

No, there is no general requirement for a document with that specific title for all companies. It can still be an important tool for risk control, liquidity, and clear credit decisions.

Is a credit limit the same thing as payment terms?

No. The credit limit refers to how much exposure the customer may have. The payment term specifies when payment should occur.

Can a company lower a customer’s credit limit?

The company can make decisions about its future credit granting, but existing agreements and other binding commitments must be considered. Check the terms before implementing a change.

How often should business customers be credit-checked?

There is no single time interval that fits everyone. Choose follow-ups based on exposure, risk, payment history, and changing circumstances.

Further reading and related guides

• Supplier agreements – which B2B terms should be regulated?
• Approval procedures – who approves costs and invoices?
• Disputed invoice, debt collection, and the Enforcement Authority – what happens?
• Liquidity budget – planning customer payments

Sources

• The Riksdag – Interest Act (1975:635).
• The Swedish Authority for Privacy Protection – Credit Reporting Act and GDPR.
• The Swedish Tax Agency – bookkeeping and documentation.

Fact-checked: October 12, 2026. This article provides general information for Swedish companies and does not replace individual legal, credit, or accounting advice.