Within recent years the great importance of proper accounting methods in the conduct of business has come to be fully recognized.
This section of the Course should enable any executive or accountant to determine what accounting methods are best adapted to his own line of business.
Credit and Collections
Mercantile credit Book credit Documentary credit Granting credit—personal considerations Granting credit—business considerations Sources of credit information Cooperative methods in credit investigation Analysis of credit information The credit man Credit management Collecting the money due The collection manager and his work Principles underlying collection effort Collecting on a friendly basis Unfriendly stages of collection Credit protection Bankruptcy The role of the credit department in developing business
When a bill of goods is sold, the transaction is by no means complete—that is, if the sale is on credit. The purchaser must pay the bill. But some purchasers cannot pay, others will not; therefore caution must be exercised in granting credit, and pressure brought to bear in obtaining payment.
Often seekers after credit are foolishly offended at the questions they must answer. They do not realize how personal is the favor they are asking, nor do they usually understand the combination of factors which the credit man must consider.
These factors range all the way from personal habits of the applicant to a survey of general business conditions.
There is a well-organized machinery for gathering credit information both in this country and abroad. This machinery, however, should be supplemented by the personal observation of the salesmen, many of whom now fail to cooperate in the right spirit with the credit manager.
The credit operation is incomplete till the goods are paid for; collections are the complement of credit granting, and they receive an extended treatment in the Text. As a last resource, the law may be resorted to, as is evident in the treatment of credit protection and bankruptcy.
The possibilities of the credit department as an agency in building up business, which have not always been understood, are set forth in the concluding chapter.