Marginal Analysis of Credit Sales.
Electronic data processing has brought about vast changes in every area of business management, and the credit and accounts receivable department is certainly no exception. Moreover, changes in business in general have placed greater emphasis on credit management. With computerization, the credit manager is in a better position to make a worthwhile contribution in the solution of problems facing management. The National Association of Credit Management reports that the dollar quantity of receivables is on the rise. New and more sophisticated quantitative techniques have been developed to assist credit management in assuming a new role in the total management of the firm. On one hand, management is concerned about the possible loss of sales due to a credit policy which is too tight; on the other hand, the concern is with possibly high bad-debt losses caused by an easy credit policy. The article discusses a credit model that can assist management in resolving this conflict. The model adopts marginal costing methodology, which offers accurate information for the management.
- DOI
- 10.2308/tar-4482918
- Volume
- 41 (1)
- Pages
- 121-126
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref