Smart use of credit terms

The core of credit terms and accounts payable lies in the "buy now, pay later" credit arrangement, which consists of two key elements: credit limit and payment period. The credit limit defines the maximum amount customers can purchase on credit, while the payment period refers to the duration of deferred payment, commonly ranging from 30 days, 60 days, to 90 days. In Pengsou International Logistics' operations, for long-term clients with strong credit profiles, we provide tailored credit limits and appropriate payment periods based on their actual needs and creditworthiness, helping them optimize capital management and business development.

Pengsou International Logistics implements a rigorous credit evaluation process when granting payment terms. The procedure begins with comprehensive collection of client information, including financial status and credit history, to establish a thorough understanding. A combined qualitative and quantitative assessment method is then applied to evaluate and rate clients, ensuring accuracy and objectivity in the evaluation. Based on rating results and industry standards, the company prudently determines credit limits and payment terms. Detailed agreements are subsequently signed with clients to clearly define mutual rights and obligations. Throughout the partnership, the company dynamically monitors client performance and adjusts credit plans as needed to safeguard corporate interests.

Multiple factors influence Pengsou International Logistics 'credit decision-making process. Key considerations include clients' creditworthiness, procurement volume, and historical collaboration. Clients with strong credit profiles and substantial purchasing volumes typically receive extended payment terms and higher credit limits, as they demonstrate robust repayment capacity and genuine commitment to partnership. The company also aligns its credit criteria with industry standards and market competition, while carefully balancing its financial position and risk tolerance to ensure effective risk management during business expansion.

Credit terms play a vital role for both Pengsou International Logistics and its clients. For businesses, extended payment periods help ease cash flow pressures, allowing operations to continue smoothly even during financial strain. For the logistics company, offering such credit services enables it to attract more clients, expand market share, and strengthen competitiveness. However, credit terms carry inherent risks. Prolonged payment periods may increase capital occupation costs and accounts receivable risks for Pengsou International Logistics. Should client operations deteriorate, payment collection difficulties could emerge. Therefore, the company maintains a cautious approach when implementing credit terms while strengthening risk management measures.

By strategically implementing its credit policy of payment terms and credit lines, Pengsou International Logistics has not only met client demands but also achieved steady business growth. Going forward, the company will further refine its payment terms management system to deliver superior services and make greater contributions to industry advancement.