Credit Control — A Survey

Abstract

The success of a credit system, in terms of both effectiveness and cost, is largely determined by policy established within the company. Too conservative a policy will entail high opportunity cost through loss of business, but too liberal a policy results in the cost of tying up funds in debtors and the increased possibility of bad debts. A survey investigating building merchants' practices in Wales (1984), conducted by questionnaire, reflects some variety in approaching the provision of trade credit, but a relatively high degree of uniformity and lack of sophistication in monitoring systems. Producing statistical indicators of performance from a computer, ceasing to grant credit, or using external services such as credit insurance and factoring, are options which do not seem to have been fully explored.

Citation

Cowton, C.J. and Ho, P.C. (1985), "Credit Control — A Survey", Industrial Management & Data Systems, Vol. 85 No. 3/4, pp. 9-11. https://doi.org/10.1108/eb057394