Asked by Cylas Kawika on Apr 25, 2024
Verified
Selling on credit typically involves at least three different entities in a large firm: the credit manager, the marketing manager, and the controller. What are the potential sources of conflict between the three?
Credit Manager
A professional responsible for overseeing a company's credit policies and procedures, managing credit risk, and ensuring customers pay their bills on time.
Marketing Manager
A professional responsible for planning, developing, implementing, and overseeing marketing strategies to promote products or services and increase market share.
Controller
A high-level executive responsible for a company's financial statements, accounting, and financial planning.
- Recognize the implications of credit sales and accounts receivable management on a firm's financial health.
Verified Answer
TL
Tauhira Latief7 days ago
Final Answer :
The textbook answer to this question would be that, if the marketing manager is trying to land a new account, it may seek more liberal credit terms as an inducement. However, this may increase the firm's investment in receivables or its exposure to bad-debt risk, and conflict can result. Beyond this, it is difficult to think of sources of conflict between the controller and the other two parties unless unethical or even illegal business activities are being pondered.
Learning Objectives
- Recognize the implications of credit sales and accounts receivable management on a firm's financial health.