The Impact of Credit Management on the Profitability of Manufacturing Firms

ABSTRACT The study examined the impact of credit management on the profitability of manufacturing firm. The objective of the study is to determine the significant relationship berween credit management and the profitability of a manufacturing company, and to examine the impact of credit management on the efficiency of a Manufacturing company The study adopted ex post facto techniques using secondary data extracted form the annual reports and accounts of Unilever Plc. The data were analyzed using Statistical Package for Social Sciences (SPSS) version 20. Findings shows that there is significant relationship between credit management and the profitability of a manufacturing company and that Credit management has no impact on the efficiency of a manufacturing company. The study made recommendations base on findings that manufacturing companies should intensify efforts to engage the services of factoring agents. This will reduce the incidence of bad debts losses and other associated costs of credit, that mamufacturing companies should increases the rate of credit sales to trustworthy customers only despite the fact that credit sales is a marketing tool to maintain or expired sales; and that firms should monitor, review and adjust credit policy from time to time considering the nature of their business and mission.