CONTROL OF CREDIT

Evening Post, Volume CXIX, Issue 94, 22 April 1935, Page 10

CONTROL OF CREDIT

DRY ROT IN BUSINESS

The, need for stricter control of business credits was the subject of an address by Mr. Gainor Jackson, president of the Auckland Chamber of, Commerce, to a luncheon meeting of the AucklandCreditmen's Club. "Most business men have, 'during the depressed conditions, found it necessary rigorously to apply the pruning knife to' the various branches of their overhead expenditure," said Mr. Jackson. "Other branches have had to be cut back and the apparent dead wood eliminated. On investigation, however, it will be found that most business trees are affected by a malignant and cankerous growth which works its .corrupt influence unseen. I refer to the disease of 'dry rot' occasioned through lack of care and attention to credit control. "On commencing in business, the first question that presents itself to a trader is, should credit be given and, if so, to whom, and to what extent? lo most traders the only alternative to accepting orders on credit would be a dangerously reduced turnover, so that for them it is only the second part of the question that presents any perplexity. Some may attempt- to set a limit to the amount or tile-duration of the credit they are.prepared, to. extend, to customers'; but most, I venture to think, are guided in this important matter not by any arbitrary rule, but by their estimate in each case of their customer's reliability and the prospects of future patronage. ♦ "To many a good customer a suggestion of payment in cash would come as an affront, and to others no less dependable credit is a necessity. Customers being what they are, few traders can hope to be freed from the credit problem, and they must' solve it for themselves with the aid of all the discretion at their command, and the information available respecting those to whom it is proposed credit should be granted." Mr. Jackson explained the difficulties that confronted business men in ttns task, and also referred tjsf anomahe* in the bankruptcy laws of Isew Zealand and the unsatisfactory provision made tor trade assignees and debt collectors.