Credit management practices at the Kenya Power and Lighting Company
Vikiru, K Stephen
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The aim of the study is to evaluate current credit management practices at KPLC and to asses the effectiveness of these credit management practices. Credit management has established itself worldwide as a vital management function, contributing to the economic well being of organizations of all kinds. Efficient credit management, with its crucial impact on cash flow, can make the difference between survival and insolvency in the private sector, or between cost effective and wasteful administration in the public sector. Effective management of accounts receivable therefore presents important opportunities for organizations to achieve strategic advantage through improvements in customer service, cash management and reductions in costs This research is a case study and the method has been chosen because it enables the researcher to probe and obtain an in-depth understanding of a particular phenomenon. The population of interest will be personnel in the credit department of KPLC both at the headquarters and all regional offices. A stratified sample of personnel was drawn for the purpose of administering questionnaires. Qualitative and quantitative research methods were complimentarily used in order to have a more objective interpretation of data. The combination of the methods used provided a rich portrait of the phenomena under study. Data analysis involved computation of mean, the standard deviation and the median for each of the units’ debts and bad debts. It comprised the tabulation and comparison of cross sectional variables across units and over time. It further used the descriptive statistics of the Debtor’s days, Average collection period, Day’s sales outstanding and ageing schedule. From the results, conclusions were drawn on the effectiveness of the credit management practices at the KPLC. .
University of Nairobi