function of finance manager for receivable

May 29th, 2015
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Abilene Christian University
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“I’d like to borrow some money from your company. I’d like the loan for at least 90 days, but I will probably take longer to repay you, if I repay you at all. There is, in fact a chance that I will not actually repay you and, if I do, it will be after you have spent a considerable amount of time, effort and money chasing me. I do not intend to pay any interest on the amount borrowed and, incidentally, I’m not giving you any say in whether to give me the loan or not: I’ve simply taken it.”

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1INTRODUCTIONWhen a prospective customer asks for trade credit from a seller, he iscareful how to put his request, but if he had to be honest and speak his mind, hewould possibly actually ask the seller something like this:Id like to borrow some money from your company. Id like the loan for at least90 days, but I will probably take longer to repay you, if I repay you at all. Thereis, in fact a chance that I will not actually repay you and, if I do, it will be afteryou have spent a considerable amount of time, effort and money chasing me. I donot intend to pay any interest on the amount borrowed and, incidentally, Im notgiving you any say in whether to give me the loan or not: Ive simply taken it.Giving loans is not something that only banks do. Most businesses loanmoney to their customers in the way stated above, such customers are known asdebtors, and this is the standard business practice. The only real differencebetween bank loans and debtors is that banks get paid interest on the money theyhave lent and the companies are not.The following, again, is a debtor who is actually speaking his mind:The one contribution that debt collectors do make is that every time theytelephone me, I have to think up an even more imaginative reason for furtherdelaying the payment: none of the directors are here to sign the cheque, I haverun out of cheques and the bank has run out of chequebooks, Malta post isbecoming more inefficient by the day, someb

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