CREDIT CONTROL AS A STRATEGY OF PROFIT MAXIMIZATION USING THE CASE STUDY OF NESTLE OF NIGERIA P.L.C.
This study focuses on the impact of credit control system in an organization Nestle Nigeria PLC was used as case study. Questioners were distributed and administered using survey research method for the purpose of data collection. The data obtained was analyzed using chi—square inferential statistics. There research questions were highlighted and also three sets of hypothesis were formulated for the purpose of this study. The demographic data obtained was analyzed using descriptive statistics such as frequency count and simple percentage. The finding revealed that there is significant relationship between credit control system and profit maximization credit control system and organisation performance.
1.1BACKGROUND OF STUDY
Credit control system could be seen as part of organizational tools or instrument, while should be established by the management in order to achieve its goals and objectives. It simply refers to the system of controlling and forms of indebtedness that is likely to be encountered in an organization.
An organization should ensure that proper credit control system is adopted in order to prevent unnecessary indebtedness, while can directly or indirectly hinder the profit maximization policy of the organization.
Basically it is imperative for any organization plan for ways of achieving
the targeted profit and that is why the policy is more essential for the 566t in achieving the preselected objectives, such as
ensuring how the company debts will be paid on time and to plan an affective credit control system for the goods sold.
At time it is often difficult for a company to avoid selling on credit bases to customers because most of the customers may not have reguiered cash to pay for goods sold to them immediately and the organization may not be willing to loose customers , particularly, the prominent customers.
For example, in a situation whereby a wholesaler is willing to pay a large amount of his or her goods, rate instrumental bases directly from their company, a good credit control system should be design to fasting such payment in order not hinder the progress of the organization.
So it is therefore necessary for the company to plan their strategy on how to recover their money from this customer and this is the essence of credit control system in an organization
1.2 STATEMENT OF PROBLEM
Currently, the manufacturing industry is highly volatile due to the technicalities of the job and products required or demanded for. There are also high rates of bad debts in the industry, which may paralyze the industry, if not taken into consideration.
A way of doing this, according to the credit control manager of the organization is through credit control system which is properly designed and implemented.
The major problem had been ‘’ what ’’ is or are the best means of achieving an effective credit control system which in turns bring an excellent achievement towards the organization goals, that is profit maximization.
1.3 PURPOSE OF STUDY
The purpose of this study are as follows.
- to find out the relationship credit control and profit maximization.
- to find out how credit control system can help in achieving organisation goals and objectives.
- To make appropriate recommendation where and when necessary based on the findings.
1.4 SCOPE AND LIMITATION OF STUDY
Due to time constraint, the study could not have an indepth research into the local and over seas credit control system policy. In addition, the study is localized to localized companies like the Nestle food PLC the finding of this study may also be use in other manufacturing companies with similar structure.
DEFINITION OF TERMS
CREDIT:- This is the permission to delay payment for goods and services
used after they have been received or supplied. When organization supply
goods to a customer without collecting money immediately and the customer
promised to pay later, this is called credit sale.
CONTROL:-This refers to power or authority over thing, it can also be
referred to regulating of some thing.
SYSTEM:- This refers to a set of ideas, theories and procedure or a particular way of doing something, or a group of things, pieces of equipment
e.t.c that are connected or work together.
PROFIT MAXIMAZATION:- In economics, profit maximization is the short run or longs run process by which a firm determines the price and output level that returns the greatest profit.
MANAGEMENT :- Is refers to as the act of running and controlling a business or similar organization achieving organization goals and objectives.
ORGANIZATION:- This is refers to as a social unit of people that is structured and manage to meet a need or to purser collective goals.
1.5 SIGNIFICANCE OF STUDY
Considering the technical and volatile nature of the manufacturing industry, the need arises for nestle food PLC to indebt credit control policy in order to meet the present and future requirement of the economy.
Credit control system encapsulate the process of helping the credit control manager to acquire skill and knowledge needed for the jobs, they are currently occupying in the future.
This study arise at highlighting the following
- The need for credit control development or system
- The benefit accruing from such control
- The benefit the organization will derive from credit control system
- The extent to which the organization will meet the needs of the credit control department.
1.6 RESEARCH HYPOTHESIS
In other to carry out the research, the following hypothesis are therefore formulated :-
Hi:- there is a relationship between credit control and growth in sales of productions.
- Ho:- there is no relationship between credit control and profit maximization.
Hi :- there is a relationship between credit control and profit maximization
- Ho:- these is no relationship between credit control and organizational performance.
Hi:- there is a relationship between credit control and organization performance.
- Ho:- there is no relationship between credit control and growth in sales of productions.
Are You In Need Of Help? Call us or Whatsapp us @ (+234) 08093239919, or Via Email: [email protected]
Disclaimer: The copyright owner created this PDF Content to serve as a RESEARCH GUIDE for students to conduct academic research.
The original PDF Research Material Guide that you receive can be used in the following ways.
1. To provide additional information about the topic of the project.
2. You can use them as a resource for your research (if you properly reference them).
3. Proper paraphrasing is required (consult your school’s definition of plagiarism and acceptable paraphrase).
4. If properly referenced, direct citation.
We are grateful for your consideration of the copyright of the authors.
Thank you so much for respecting the authors copyright.
Are You in Need of Help? Call us or Whatsapp us @ (+234) 08093239919 or Via Email: [email protected]