THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. TUESDAY, 22nd MAY, 1934. THE USE AND ABUSE OF CREDIT.

Waipa Post, Volume 48, Issue 3469, 22 May 1934, Page 4

THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. TUESDAY, 22nd MAY, 1934. THE USE AND ABUSE OF CREDIT.

OP all modern abuses none is more general than the disregard of credit terms. Very many people are disregarding their responsibilities in a wanton manner, and the trader is forced into a condition which unduly swells his business overhead. To demonstrate the point we will talk “shop,” as our experience is illustrative of what is happening around us. Eveuy business is similarly affected, and on every hand the burden of irresponsible credit seeking and of credit abuses presents a problem which ought never to arise. In our own instance we have several hundred accounts ranging in amount from one shilling to one pound which have had to be carried forward in account for months. It is evident that the debtor does not appreciate the work involved and the needless overhead in business that is occasioned by Iris own neglect. To him the account for a few shillings seems hardly worth bothering about: he forgets that his creditor may have several hundred similar accounts which in the aggregate amount to a fairly considerable amount. Any trader will tell you that these small debts are the bugbear of his business. They are, indeed, an abuse of credit. The accountancy cost for an account of one shilling is practically equal to the cost of recording a one hundred pound transaction. Postages on the accounts is the same, and so is the cost of stationery. If credit costing could be itemised it would be found that the customer who pays a few shillings account after it has been rendered to him for three months pays . nothing for his original debt, but only reimburses the trader the costs incidental to credit. There are some people who imagine that small accounts need not be paid on the score that they would never be sued for such a trifling sum. In many instances it does work out that way, the trader electing to purge h>s ledger of these overdue shillings rather than be bothered with the formalities of the courts. This is an entirely wrong attitude. If every trader would only press for payment there would soon be awakened in the minds of delinquents a realisation which would cure a very prevalent evil. Not so very long ago an instance came, under notice of a man who had boasted a debt of one shilling on which eightpence had been expended on postage stamps. The trader took the hint and sued him, and the debtor had to pay not only the one shilling debt but the Court costs as well. His own neglect cost him twelve shillings. Of course he

was annoyed and vowed vengeance on the trader. What he overlooked was that the trader was better without his patronage, which, in the end, had earned only an ovei’head cost of foolish credit which made the trade unprofitable. In our own books to-day we have, as we said, several hundred accounts which represent worthless business. Through .having given these debtors credit we are paying away, month after month, good money for stationery and postage stamps. It can no longer await the pleasure of the debtor. There is no logical reason why we, or any trader, having performed a certain service for a debtor, should go on interminably balancing these small trifling accounts in the ledger and paying the postage and other costs for the regular servicing of the accounts. Notice is given that three months is our maximum credit period, and beyond that elate all outstanding accounts will be sued for without further notice. After all, it takes two to participate in credit abuse. The person who gives credit has it in his power to stay the evil effects of neglect. We, for our part, intend to do so.