GIVING CREDIT

Sun (Auckland), Volume IV, Issue 965, 7 May 1930, Page 10

GIVING CREDIT

WHY SOME FIRMS FAIL TALK TO BUSINESSMEN ‘‘Customers are 99 per cent, honest, and it is the man without business faculties, rather than the dishonest man, against whom we have to guard,” declared Mr. H. J. Mills, in a talk on “The Manageemnt and Control of Credit,” at a luncheon of the Auckland Creditmen’s Club today. With the present keen competition there is little enough margin in the best-regulated businesses to cover bad debts, said the speaker. Most of the world’s business is carried on through credit. It was the duty of the credit manager of the big modern business to ensure that losses through bad debts were reduced to a minimum. Credit must be controlled from the outset and should never be given without security. The task of the manager was a difficult one at any time, necessitating tact, a sense of proportion, power to make quick and firm decisions, and a sound working knowledge of accountancy and commercial law. His work was eased considerably when there was a book-keeping system whereby the position of every customer’s account was ascertainable from day to day.

“It is the ambition of every businessman to own his own premises, and it is through undue optimism in achieving this object that firms giving credit are generally endangered,” said Mr. Mills. “By purchasing buildings, capital is reduced, often leaving insufficient to keep credit within reasonable limits.” Outside factors often affect the small country storekeeper. The state of some minor industry or the deferred payment of a dairy company's bonus may mean the difference between success and failure . In such cases the wholesale firms should be prepared to wait for a month or two for their money. Different classes of businesses require different treatment. Frock specalists may often be given credit extending over a season, but hawkers always pav ca»h.