Internal controls and debtors management in telecommunication industry of Kenya: a case study of Star Fm, Garissa-North Eastern Province, Kenya

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Kampala International University, College of Economics and Management
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 of loopholes 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 overdue account and if possible use the credit collection agency.
A Research Report Submitted to the School of Business and Management for the Partial Fulfillment of the Requirement for the Award of Bachelors Degree in Business Administration at Kampala International University
Internal controls, Debtors management, Telecommunication industry, Kenya, Star Fm, Garissa-North Eastern Province