AAT Level 4 · CRDM

Credit and Debt Management

Assess credit risk, apply credit control policies and use legal and practical methods to collect debts.

Explore key topicsFind free resources

Studying CRDM on Q2022? It has no equivalent in the new Level 4, so it doesn’t transfer. If you stay on Q2022, it still counts as one of your two optional units.

Level 4 changes guide
Unit overview

Understand the method, not just the answer.

Q2022 unit supportThis page supports the AAT Level 4 Diploma in Professional Accounting (Q2022). Check that this is the qualification route shown in your MyAAT account or by your training provider.

CRDM looks at credit from both sides: deciding who should be given credit and making sure the money is collected. Learners apply contract and consumer credit law, use financial information to assess customers, and recommend how an organisation should manage and recover what it is owed.

Use this page as a starting point for your revision. Work through the topic areas, identify where confidence is lowest and combine independent practice with the linked downloads and free sessions.

Key topics

What to focus on in CRDM.

These topic summaries provide a revision map rather than a replacement for the current AAT specification and your training-provider materials.

1

Legal framework

Apply contract law, consumer credit rules, data protection and late payment legislation to credit decisions.

2

Assessing credit risk

Use credit reports, references and ratio analysis to judge whether a customer is creditworthy.

3

Granting credit

Set credit limits and terms and communicate credit decisions clearly and professionally.

4

Credit control policies

Evaluate settlement discounts, invoice discounting, factoring and credit insurance.

5

Monitoring receivables

Use aged receivables analysis and receivable days to spot problems early.

6

Collecting debts

Choose suitable collection procedures, legal remedies and insolvency actions, and deal with irrecoverable debts.

How to revise this unit

  1. 1
    Practise calculating and interpreting the key ratios used to assess a customer.
  2. 2
    Make a table of finance and collection options with their costs, benefits and risks.
  3. 3
    Learn the order of a typical collection process, from reminder letter to legal action.
  4. 4
    Finish every credit assessment with a clear decision and a suggested limit or terms.

Common pitfalls

  • !
    Calculating ratios without explaining what they show about the customer’s risk.
  • !
    Confusing factoring with invoice discounting.
  • !
    Recommending legal action without considering the cost, the amount owed and the customer relationship.
Free revision posters

Revision posters for CRDM.

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Upcoming sessions for CRDM.

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INAC · Level 4

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Evaluate accounting systems, identify risk and control weaknesses, and recommend practical improvements in a professional report.

ExamReady

CRDM practice questions and a timed mock, from 27 October.

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This is independent revision support and is not produced, endorsed or approved by AAT. Always check the current AAT specification, assessment information and your training-provider guidance.