ADMINISTRATIVE PROCEDURE PROBLEM ASSOCIATED WITH MANAGEMENT OF CREDIT

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ADMINISTRATIVE PROCEDURE PROBLEM ASSOCIATED WITH MANAGEMENT OF CREDIT

ABSTRACT

The management of credit is a critical function in any organization, directly influencing its financial stability and growth. However, administrative procedure problems in credit management can pose significant challenges, leading to inefficiencies, increased risk of bad debts, and financial losses. This study explores the administrative procedure problems associated with the management of credit in organizations, with a focus on identifying the key issues that hinder effective credit management practices.

The research examines various aspects of credit management, including the process of credit approval, risk assessment, monitoring of receivables, and recovery of outstanding debts. It also highlights the common procedural problems such as inadequate risk evaluation, poor documentation, lack of clear credit policies, delays in decision-making, and inefficient communication between departments. These issues can lead to poor credit control, high default rates, and liquidity problems.

Through a combination of qualitative and quantitative methods, data was collected from finance and credit management professionals in selected organizations. The findings reveal that administrative inefficiencies, lack of proper training, and inadequate use of technology are among the major factors contributing to credit management problems. Based on these findings, the study provides recommendations for improving administrative procedures, including the adoption of clear credit policies, regular training of personnel, and the integration of automated credit management systems to enhance efficiency and reduce risk.

This study contributes to the understanding of how administrative procedure problems can impact credit management, and it offers practical solutions for organizations to improve their credit processes, reduce financial risks, and enhance overall performance.

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