Abstract:
An efficient credit management system reduces the amount of capital tired up with debtors and minimizes bad debts. Good credit management system is vital to business cash flow and success and ensures effective business operation.
The study investigated the impact of financial management of trade credit on firm’s performance; using Guinness Ghana brewery limited (GGBL) as case study. The choice of the topic was influenced by the impact of short term financial management of trade credit on profitability of companies.
Description:
An efficient credit management system reduces the amount of capital tied up with debtors and minimizes bad debts Finlay (2009). Peter D. (2005) conceived that there is a positive cor-relation between credit management and profitability. According to Dina A. (2007), good credit management is vital to business cash flow and ensures business operations. Good credit management involves optimizing cash flow to ensure stability and provide maximum potential for growth. Credit arises when a firm sells its products or services on credit and does not receive cash immediately. It is an essential marketing tool, acting as a bridge for the move-ment of goods through production and distribution stages to customers.
