The relationship between Internal Controls and Debtors Management: A case study of Star Fm, Garissa-North Eastern Province, Kenya
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Date
2009-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Kampala International University, College of Economics and Management Sciences
Abstract
The research study was undertaken on the relationship between internal control and
debtors' management.
The main objective of the study was: to ascertain the internal control on debtors, to
determine the credit collection by Star Fm and examine the relationship of internal
control and debtors' management.
The techniques used in the collection were questionnaire and interviews. The data
collected was coded, edited and tabulated with the help of tables and percentages that
were essential techniques in presenting and analyzing data.
The study revealed that internal controls on debtors existed but were full ofloopholes that
made it possible for poor credit collection performance.
The study also revealed that the credit policy variables of credit terms, credit standards
and credit collection effort did exist but on close analysis it was found out that Star Fm
staffs hardly considers them before any credit extension is made to credit applicants.
These have affected the credit collection effort leading to high level of accumulating
debtors year after year.
To improve on credit terms and credit standards; the 5 C's of capital, capacity, collateral,
character, and condition of every credit applicant should be ascertained as suggested by
Pandey.
On credit collection the company should use the remainder letters and if possible
personal visits, so as to encourage the customers to pay their over due account and if
possible use the credit collection agency.
Description
A research report submitted to the School of Business
and Management for the Partial Fulfillment of the
Requirement for the Award Bachelor Degree in
Business Administration at Kampala
International University
Keywords
Internal Controls, Debtors Management:, Relationship, Kenya.