Procedure

BUSINESS MANAGEMENT SYSTEM No.

CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

Southern Africa

CUSTOMER ONBOARDING AND CREDIT APPLICATION PROCEDURE

Rev.
Approval Name Signature Date
No.

Revision Date : 04.2024 Page 1 of 10 Rev.1

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

CONTENTS

PURPOSE 3
SCOPE 3
REFERENCE 3
ABBREVIATIONS 3
DEFINITIONS 4
ROLES AND RESPONSIBILITIES 4
PROCEDURE 4
APPLICABLE DOCUMENTS 7
RECORD CONTROL 8
REVISION CONTROL 8
PROCESS FLOW 9

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

1. PURPOSE

1.1 The purpose of this procedure is to define the roles and responsibilities for the onboarding of all
new customers to ensure a proper due diligence and creditworthiness assessment is completed
for each new customer to limit the company’s risk exposure and decrease the probability of bad
debt.
1.2 The purpose of the procedure is to also establish whether each potential new customer is aligned
with ’s compliance and ethics policies.

2. SCOPE

2.1 The procedure applies to all legal entities across Southern Africa Water services, waste
services, Botswana, Namibia) providing goods and / or services to customers (whether on a cash
upfront or on a credit basis).

3. REFERENCE

3.1 Delegation of Authority Matrix [LCC-QPR-002]

4. ABBREVIATIONS

4.1 AR - Accounts Receivable

4.2 BD - Business Development

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

4.3 BU- Business Unit

4.4 FM - Financial Manager
4.5 CFO – Chief Financial Officer
4.6 CEO – Chief Executive Officer
4.7 ERP - Enterprise Resource Planning
4.8 VAT - Value Added Tax
4.9 SARS - South African Revenue Services
4.10 RR - Relevant Representative

5. DEFINITIONS

Definition Description

Customer An individual or business that purchases another

company's goods or services.

Credit risk is the risk of loss resulting from the failure of borrowers
or counterparties to meet their debt or contractual
obligations

ERP the company’s chosen enterprise resource planning

system

Order Processing The employees or team within Business Support

Department responsible for all order processing

6. ROLES AND RESPONSIBILITIES

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

6.1 It is the responsibility of the Ordering Department/ Relevant Representative to liaise with the
Customer and obtain all the required documentation for the creation of the new Customer
account.
6.2 It is the responsibility of the Compliance department to perform the due diligence check on the
prospective Customer.
6.3 It is the responsibility of the Finance department to conduct an affordability assessment to
determine the Customer’s creditworthiness.

7. PROCEDURE

7.1 CASH CUSTOMER APPLICATION

7.1.1 A new account request form [FIN-QPF-005] must be completed by the Order Processing with the
details of the Customer and approved by the relevant line manager.
7.1.2 Ordering Processing must load the Customer’s account on the local ERP system within 24 hours
of receipt of the application form.

7.2 CREDIT APPLICATION

7.2.1 Order Processing must issue the Credit Application Form [FIN-QPR-005] to the Customer
to complete.
7.2.2 The credit application form together with the standard terms and conditions of sale must
be completed and signed by an authorized representative of the Customer.
7.2.3 All Customer comments and concerns on the standard terms and conditions of sale must
be communicated to the Legal department for review.
7.2.4 The Customer must indicate the credit limit which they are applying for on the Credit
Application Form [FIN-QPR-005] .
7.2.5 The credit application must be accompanied by the following documentation:

● Company registration documents;

● VAT registration certificate;

● SARS Tax Compliance Status Pin Letter;

● Copies of the company directors identity documents;

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

● Company proof of address not older than 3 months;

● A minimum of 3 trade references;

● Confirmation of banking details not older than 3 months;

● Latest Financial Statement (optional- if the customer is willing to share) and

● Letter of Good Standing.

7.2.6 The credit application form must be reviewed for accuracy and completeness by the ordering
department prior to submitting for approval.
7.2.7 Approval to proceed without complying with clause 7.2.5 above needs to be obtained from
both the Compliance and Finance department. Where the relevant personnel do not agree, the
matter can be escalated to the CEO.
7.2.8 The documentation will be shared with Legal & Compliance and Finance departments to
proceed with the due diligence and credit checks.

7.3 PAYMENT TERMS

7.3.1 Services Southern Africa payment terms are 30 days from the invoice date.
7.3.2 Any variations to standard payment terms must be agreed at the time the original contract
is negotiated, not at the time the customer account is created.

7.4 DUE DILIGENCE

7.4.1 A background/due diligence assessment through the company’s chosen tool (e.g.
LexisNexis, Catalyst etc.) must be performed by the Compliance & Legal.
7.4.2 All flagged/risk areas must be reviewed and discussed with Order Processing and Finance where
necessary.
7.4.3 Upon satisfactory completion of the due diligence, the credit application form must be signed by
Compliance as evidence of approval.

7.5 AFFORDABILITY ASSESSMENT

7.5.1 A credit and affordability assessment must be performed by Finance to determine the
Customer’s creditworthiness and the extent thereof.

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

7.5.2 The method of assessing risk and determining the credit limit may vary depending on the
amount of credit requested.
7.5.3 A credit limit request of less than R500 000 must include:
● Trade references check (especially at comparable exposure levels); and
● A basic credit risk check (i.e. Basic credit report).
7.5.4 A credit limit request of R500 000 or more must include:
● Trade References (especially at comparable exposure levels); and
● Detailed credit risk checks (i.e. Detailed Credit Report).
7.5.5 Where the Customer is willing to share financial statements, pulling a credit report is not
necessary provided the Customer is solvent and liquid. The following matrix is applicable in this
instance:
KEY:
GREEN - no further assessment necessary - credit limit can be approved
ORANGE - further credit checks to be performed
RED - credit cannot be granted. Refer to clause 7.4.6 for risk mitigation options

SOLVENCY RATIO LIQUIDITY RATIO

(Total assets less total liabilities) (current assets less current liabilities)
Ability to meet long terms debt Ability to pay debt as it becomes due

2:1 or better 1:1 or better

less than 2:1 less than 1:1

less than 1:1 less than 2:1

7.5.6 Where a Customer’s creditworthiness assessment indicates that the Customer is a high
risk, depending on the amount of credit required, the Compliance Officer, Financial Manager and
Chief Financial Officer will decide on the course of action to be taken, for instance:
● Upfront payment may be required; and/or
● Bank guarantee (i.e. a payment guarantee); and/or
● Insurance cover to hedge against the credit risk exposure.
7.5.7 Once the creditworthiness assessment has been performed, the Financial Manager and
Chief Financial Officer must sign the credit application as evidence of approval.
7.5.8 The credit application must be signed through docusign by all relevant parties.

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

7.7 CUSTOMER ACCOUNT CREATION

7.7.1 Once all the necessary approvals have been obtained, Order Processing must load the
Customer’s account on the ERP within 24 hours.
7.7.2 Once the Customer’s account has been created, the Finance team must update the credit
limit on the ERP.
7.7.3 All the relevant supporting documents must be retained by Order Processing on the
designated drive for audit purposes.

7.8 CREDIT LIMIT INCREASE

7.8.1 An existing Customer who wishes to increase their credit limit 12 months or more after the
initial application must complete a new Customer Onboarding and Credit Application Form and
resubmit all the required documents.
7.8.2 The same processes set out above must be followed by the relevant departments.

7.9 EXCEPTION REPORT

7.9.1 On a semi-annual basis, a log of all customer record additions/updates must be
generated and matched against the Customer Onboarding and Credit Application Forms that
were approved for the same period. Any variances (e.g. customer additions without forms) must
be further investigated. This report should be signed as evidence of review.

8. APPLICABLE DOCUMENTS

The following document/s form part of this procedure:

Title Area / Section / Location Document No.

A new account request Form

Credit Application Form Form

9. APPLICABLE DOCUMENTS

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

Records Keeping – Retained documented information

All the relevant records must be retained in accordance with LCC-QPR-004 Record Retention Policy, in
order to demonstrate conformity to this work instruction.

Title Retention Period Retention Location Reason For Document

Procedure 7 years Google Drive Audit purposes

10. REVISION CONTROL

Revision No: Description of Change Changed By Date

0 New Procedure 19/09/2022

1 Updating the requirement for credit 19/04/2024

application.
Inclusion of credit assessment indicators

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 Procedure
BUSINESS MANAGEMENT SYSTEM No.
CUSTOMER ONBOARDING AND
CREDIT APPLICATION PROCEDURE Revision 1

Revision Date : 04.2024 Page 10 of 10 Rev.1

THIS DOCUMENT IS UNCONTROLLED WHEN PRINTED