HOW BAD DEBTS ARE MADE

Nelson Evening Mail, Volume 76, 19 May 1941, Page 2

HOW BAD DEBTS ARE MADE

OVER-EAGERNESS FOR SALES A reviewer of credit conditions makes some comment which should interest many people concerned with various kinds of business and industry. “In New Zealand, very often,” the critic ' says, “I find the accountant to a business house—the commercial or registered accountant—has (with no extra re- 1 muneration) the position of ‘creditmanager’ thrust upon him. I have even « heard of cases in which it has been ! sought to engraft the responsibility of 1 the creditman on to the auditor of a going-concern. Nor is this all. Fre- J quently, the ‘accountant-creditman’ does not receive that assistance to which, in the circumstances, he is entitled from the selling department of the business. ] “There are still some who seem to t imagine that the requirements of the \ accounting department of a business r are entirely subordinate to the wishes s of the selling department. We have i still much to do in the direction of educating ‘business men’ in New Zea- / land. I have come across concerns t with selling departments whose sole ob- j ject is to make ‘sales’ and who are dif- t fident of giving information to the e accounting department. c “Such lack of co-operation and coordination adds to the volume of bad | I debts. In some cases there seems to j t be well-nigh a conflict of interest be- \ tween the selling department and the ■ c accounting department of a business. The point is, perhaps, illustrated in its! ( most simple form by the attitude of cer- 1 r tain salesmen who strongly resent any ' check or criticism upon the financial • standing and stability of the customers i from whom they take orders. “New Zealand requires not only [ greater co-operation between selling I * and accounting or credit-managing de- i partments in the same business, but also I * greater co-operation between business! and business—one might almost >ay,! . between industry and industry. This! ’ could be forth-coming without abusing - confidence, or divulging information of j ’ a private nature, or telling too much to J competitors. The result would be j t better business and fewer bad debts. Lei l us recall that not only is credit ,;udici- ‘ ously granted, availed of at appropriate ! times, entered into for legitimate pur g poses, and in reasonable amount, good » for everybody, but credit injudiciously ! J granted is, in the long run, as disastrous j to the grantee as to the grantor.” ]