MANAGEMENT ANDCONTROL OF TRADE CREDIT IN COMMERCE.

Crossref Cited-by Linking logo

  • Abstract
  • Keywords
  • References
  • Cite This Article as
  • Corresponding Author

This paper focuses on the management and control of trade credit in a business enterprise. The study adopts literature review methodology. In today?s management of business, due to competitiveness, increased in business transactions and ultimate desire to get large chunk of market share for increase profitability, trade credit is inevitable. In order to trade off liquidity risk and profitability, the crafting of credit policy is not only desirable but fundamental to a firm success. The cost and benefits of trade credit must be evaluated and appraised before implementing it. We recommended that for a firm to have efficient and effective trade credit management, the engagement of credit manager and training of all stakeholders in credit administration are vital and not negotiable. The success or otherwise of any business enterprise, most especially small and medium scale enterprises, in this current economic recession in Nigeria depends to a large extent on effective and efficient management of trade credit (account receivables).

  1. Barbosa, E.G. &Moraes, C.C. 2004. Determinants of the firm?s capital structure: The case of the very small enterprises. Available at: http://econpa.wustl.edu.8089/eps/fin/papers0302/0302001.pdf [Accessed: 13/02/2017].
  2. Batty, J (1975). Management Accountancy 4th Edition, English Language Book Society and Macdonald and Evans Ltd, Plymouth, p.367
  3. Bhunia, A. (2010). A trend analysis of liquidity management efficiency in selected private sector steel industry. Internal Journal of Research in Commerce and Management. Vol.1,5,pp 213.
  4. Eljelly, A. (2004). Liquidity-Profitability Tradeoff: An empirical Investigation in An Emerging Market, International Journal of Commerce & Management, 14(2). 48 ? 61.
  5. Eugene, F.B. (19920. Fundamentals of Financial Management, 6th Edition, Dryden Press, Illinois, U.S.A
  6. Fatoki, O.O. 2010. The impact of the South African business environment on the availability of debt finance to new small and medium enterprises in South Africa. Thesis(Ph.D. (Business Management)), University of the Free State.
  7. Fatoki, O. &Smit, A.V.A. 2010. The impact of the business environment on the availability of trade credit to new SMEs in South Africa. African Journal of Business Management, 4(9): 1790-1799.
  8. Garc?a-Teruel, P.J. &Mart?nez-Solano, P.M. 2010. Determinants of trade credit: A comparative study of European SMEs. International Small Business Journal, 28(3): 215-233.
  9. Glautier, M.W.E &Underdown B (1982). Accounting Theory and Practice, 2nd EnglishLanguage Book Society, Pitman.
  10. Hutson, T.G & Butterworth, I. (1974). Management of Trade Credit, 2nd Edition, Gower Press, Epping, pg.177
  11. Kitindi, E.G., Magembe, B.A.S. &Sethibe, A. 2007. Lending decision making and financial information: The usefulness of corporate annual reports to lender in Botswana. International Journal of Applied Economics and Finance, 1(2): 55-60.
  12. Maysami R.C (2010). Understanding and Controlling Cashflow. Financial Management series. Retrieved November 12, 2010. From: www.sciencedirect.com.
  13. Miller, C. (2008). Is it time to review your credit policy. Retrieved November 29, 2013. From www.creditreseachfoundationonline.com.
  14. Owolabi, S.A &Obida, S.S. (2010). Liquidity Management and Corporate Profitability: Case tudy of Selected Manufacturing Companies Listed on the Nigerian Stock Exchange Business Management Dynamics. Vol.2, No.2, Aug. 2012, pp.10-25.
  15. Padachi, K. 2006. Trends in working capital management and its impact on firms? performance: An analysis of Mauritian small manufacturing firms. International Review of Business Research Papers, 2(2): 45-58.
  16. Pandy, I.M. (1987). Financial Management, Vikas Publishing House PVT Ltd, New Delhi, pg.376.
  17. Patrick, R.A.K. (1977). Modern Credit Management: A Study of the Management of Trade Credit Under Inflationary Conditions. George Allen &Unwin Ltd. Pg 25.
  18. Peel, M.J., Wilson, N. &Horworth, C. 2000. Late payment and credit management in the small firm sector: Some empirical evidence. International Small Business Journal, 18(2): 17-37.
  19. Poutziouris, P., Michaelas, N. &Soufani, K. 2005. Short-term financial management of working capital in small-medium sized enterprises. [Online]. Available at: https://www.coursehero.com/file/7562732/mfc-130/ [Accessed: 22/2/2017].
  20. Raheman, A & Nasr, M. (2007). Working Capital Management and Profitability: Case of Pakistan Firms, International Review of Business Research Papers, Vol.3 No.1, pp.279-300.
  21. Tagoe, N., Nyarko, E. & Smurfit, M. 2005. Financial challenges facing urban SMEs under financial sector liberalization in Ghana. Journal of Small Business Management, 43(3): 331-343.
  22. Zainudin, N. &Regupathi, A. 2011. Manufacturing SMEs credit collection period and its determinants: Some evidence from Malaysia. Folia OeconomicaStetinensia, 9(1): 88-104.

[Adesina Kehinde, Dosunmu Ayodele Benjamin, Adedayo Ojo, Ajetunmobi Opeyemi and Oderinde Abel Abiodun. (2017); MANAGEMENT ANDCONTROL OF TRADE CREDIT IN COMMERCE. Int. J. of Adv. Res. 5 (Jun). 983-989] (ISSN 2320-5407). www.journalijar.com

Adesina Kehinde
Covenant University, Ota, Ogun State, Nigeria

DOI:

Article DOI: 10.21474/IJAR01/4500      
DOI URL: https://dx.doi.org/10.21474/IJAR01/4500

Download Full Paper

Download PDF No. of Downloads: 15 | No. of Views: 79