In: Accounting
how is a credit check in the advanced technology system fundamentally different from a credit check in the basic technology system?
Credit check done in basic technology system is very different
from the same done in advanced technology system.
1- In basic technology, credit check is done by the Credit
department which work in accordance with company's credit policies
whereas in advanced technology system, the System Logic does the
decision making.
2- In basic technology, the credit check is dependent on the
organization, it's relationship with its customers and the level of
materiality of the transaction whereas in advanced technology
system, Customer's credit history serves as the base for making
credit decision and it's relationship with the organization is
irrelevant to the system.
3- There is human factor involved in basic technology system,
whereas in advanced technology, human factor is absent and if
system denies credit based on customer's credit history then the
decision is Final and cannot be changed by another clerk.