Trade Shield | Knowledge Centre CREDIT RISK

Top 5 Things Credit Controllers Miss

Before Approving a Credit Application

⏳ 5 min read 5 key checks

ⓘ Summary

Even experienced controllers can overlook small details when volumes are high. These are the most common gaps found in audits, insurer disputes, and post-mortems.

In this article

1. The Signer Was Not Authorised	2. Limit Changed Without a Reason
3. Request Bigger Than the Business	4. Banking Details Did Not Match
5. The Controller Assumed Someone Else Checked

⚠ Check: The Signer Was Not Authorised

The application is signed — but not by someone with legal authority. This is one of the most overlooked risks in credit approvals.

⚠ What gets missed:

Staff member signed instead of a director
Name on signature does not appear anywhere else
No indication of capacity or authority

What happens later:

Customer disputes liability
Insurer rejects the claim
Legal recovery becomes difficult

✓ Always check who signed. Confirm the signatory is a listed director, owner, or has a documented letter of authority before approving.

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⚠ Check: The Approved Limit Is Different but No Reason Was Captured

This is one of the fastest ways to get an audit finding. If you change the recommended limit, you must document why.

⚠ What gets missed:

Controller changed the amount
System recommendation was ignored
Insurer approval was exceeded
No explanation written

What happens later:

"Who decided this?" — no answer
No defensible audit trail
Insurer disputes coverage

✓ If you change it, write why. Use the notes field in Trade Shield to record your reasoning every time you deviate from the system recommendation.

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⚠ Check: The Request Was Way Bigger Than the Business

The numbers might technically allow it — but commercially, it does not feel right. Commercial judgement is part of the job.

⚠ What gets missed:

Small company asking for huge exposure
New business requesting mature-level limits
Sudden jump from previous trading behaviour

What happens later:

First order defaults
Internal questions about due diligence
Reputation damage to the approver

⚠ If it feels off, escalate. Your commercial instinct is a valid risk signal. Pause, document your concern, and loop in a senior approver rather than proceeding under pressure.

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⚠ Check: Banking Details Did Not Match the Entity

Fraud teams see this constantly. A mismatch between banking details and the registered entity is a major red flag that must never be ignored.

⚠ What gets missed:

Trading name vs. legal entity discrepancy
Personal account used instead of business account
Minor spelling differences in names
Recently changed bank details

What happens later:

Payment diverted to fraudster
Recovery becomes impossible
Insurance complications

⚠ Names must match. The name on the bank account must match the registered legal entity name. Any discrepancy — even minor spelling — must be investigated before approval.

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⚠ Check: The Controller Assumed Someone Else Checked

This is the silent killer.

Assuming someone else has already verified the application is how most avoidable losses happen. The approver owns the decision — period.

⚠ What gets missed:

Believing sales already verified the customer
Believing onboarding already confirmed details
Believing Trade Shield auto-verified everything
Believing management will review afterwards

What happens later:

Everyone points at everyone else
Responsibility lands on the approver
No clear accountability trail

⚠ The approver owns the decision. When you click approve, you are confirming that you have personally verified the key details. Do not approve based on the assumption that another party already checked.

The Reality

Most losses are not complex. They come from:

⏩

Hurry

Assumption

Missing Notes

Skipped Verification

ⓘ The Safety Question

Before approving any credit application, ask yourself:

"If this account defaults, could I defend my decision?"

If the answer is no → pause.

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