In the context of accounts receivable, what is the aim of credit control?

The aim of credit control in the context of accounts receivable is primarily to manage credit risk and optimize cash flow. This involves establishing policies and procedures to determine how credit is granted to customers, assessing the risk of non-payment, and ensuring that the business maintains a healthy cash flow by collecting payments efficiently and effectively.

By managing credit risk, businesses can minimize potential losses from defaulted loans and outstanding invoices, thereby safeguarding their financial stability. Optimizing cash flow ensures that the company has enough liquidity to meet its operational needs, invest in growth opportunities, and maintain good relationships with suppliers and other stakeholders. This is crucial in the accounts receivable process, as timely collection of outstanding payments directly impacts a company's overall financial health.

In contrast, options that focus on product referrals, brand loyalty, and employee turnover do not align with the core purpose of credit control. While these factors may contribute to a company's success, they do not specifically address the key financial management aspects that credit control aims to achieve.