2012年ACCA考试《F9财务报告》讲义辅导21

2012年ACCA考试《F9财务报告》讲义辅导21
Credit terms granted to customers
　　Although sales representatives work under the premise that all sales are good (particularly, one may add, where commission is involved!), the credit manager must take a more dispassionate view. (S)he must balance the sales representative's desire to extend generous credit terms, please customers and boost sales, with a cost/benefit analysis of the impact of such sales, incorporating the likelihood of payment on time and the possibility of bad debts. Where a customer does �survive� the credit checking process, the specific credit terms offered to them will depend upon a range of factors. These include:
　　· Order size and frequency � companies placing large and/or frequent orders will be in a better position to negotiate terms than firms ordering on a one-off basis.
　　· Market position � the relative market strengths of the customer and supplier can be influential. For example, a supplier with a strong market share may be able to impose strict credit terms on a weak, fragmented customer base
　　· Profitability � the size of the profit margin on the goods sold will influence the generosity of credit facilities offered by the supplier. If margins are tight, credit advanced will be on a much stricter basis than where margins are wider.
　　· Financial resources of the respective businesses � from the supplier's perspective, it must have sufficient resources to be able to offer credit and ensure that the level of credit granted represents an efficient use of funds. For the customer, trade credit may represent an important source of finance, particularly where finance is constrained. If credit is not made available, the customer may switch to an alternative, more understanding supplier.
　　· Industry norms � unless a company can differentiate itself in some manner (e.g., unrivalled after sales service), its credit policy will generally be guided by the terms offered by its competitors. Suppliers will have to get a �feel� for the sensitivity of demand to changes in the credit terms offered to customers.
　　· Business objectives � where growth in market share is an objective, trade credit may be used as a marketing device (i.e., liberalised to boost sales volumes).
　　The main elements of a trade policy are:
　　· Terms of trade � the supplier must address the following questions: which customers should receive credit? How much credit should be advanced to particular customers and what length of credit period should be allowed? (See Example 1 for an illustration of a typical credit policy decision faced by a company).
　　· Cash discounts � suppliers must ponder on whether to provide incentives to encourage customers to pay promptly. A number of companies have abandoned the expensive practice of offering discounts as customers frequently accepted discounts without paying in the stipulated period.
　　· Collection policy � an efficient system of debt collection is essential. A good accounting system should invoice customers promptly, follow up disputed invoices speedily, issue statements and reminders at appropriate intervals, and generate management reports such as an aged analysis of debtors. A clear policy must be devised for overdue accounts, and followed up consistently, with appropriate procedures (such as withdrawing future credit and charging interest on overdue amounts). Materiality is important. Whilst it may appear nonsensical to spend time chasing a small debt, by doing so, a company may send a powerful signal to its customers that it is serious about the application of its credit and collection policies. Ultimately, a balance must be struck between the cost of implementing a strict collection policy (i.e., the risk of alienating otherwise good customers) and the tangible benefits resulting from good credit management.