Management Of Accounts Receiveable And Performance Of Organisations: A Case Study Of Kyela District In Mbeya Region Tanzania.

ABSTRACT

The study was carried out at Kyela District Council, Mbeya region as a case study, in an attempt to find out the management of account receivable problems.

The objective of the study was to investigate the relationship between management of account receivable and performance of the organisation in Tanzania. To examine advantages of adopting

good account receivable policies, to establish challenges faced when implementing these policies towards positive or negative debts collection and finally to propose possible ways to overcome

the challenges faces in implementing management of account receivable problems.

The study adopted both qualitative and quantitative approach in capturing the conect perception and news of the respondents for the successful of the study. The researcher also used

questionnaires and interview as survey research technique in gathering data relevant to the study.

This design based on a descriptive and explanatory research design with the aim of identifying the account receivable policies employed. Results of the study indicate that the credit standards of the organization do not indicate the required financial strength that clients must demonstrate in order to be given credit. This is likely

to increase the amount of bad debt since some customers can fail to pay their dues.

The recommendation of the study is that, it is better for the debt collection team to be aware of the policy used by the organization. This will assist them to make effective follow up of debts.

To be successful in any activity, there is a need of well designed policies. Thus to improve accounts receivable collection, the organization should seriously ensure effective accounts

receivable collection policies in order to ensure on time cash collections. As the policy stated, for all customers who fail to settle their accounts 30 days after invoice date, a notice should be sent to the customer. This makes it easier for the customer to make settlement of a month debt within the period.

TABLE OF CONTENTS

Page

Declaration ............................................................................................................................ .

Approval ............................................................................................................................... ii

Dedication......................................................................................................................... iii

Acknowledgement.............................................................................................................. iv

Table of contents.......................................................................................................... v-vii

Acronyms............................................................................................................................ viii

Abstract............................................................................................................................... ix

CHAPTER ONE: INTRODUCTION TO THE STUDY

Introduction ........................................................................................................... .

Background of KDC ................................................................................................ .

Background of the problem ............................................................................... .

Statement of the Problem ................................................................................... .

Objectives of the Study ....................................................................................... .

Research Questions ............................................................................................. .

Significance of the Study ...................................................................................... ..

Scope of the Study ............................................................................................... .

limitation of the study ......................................................................................... .

CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction .......................................................................................................... 6

2.1 Theoretical literature review ......................................................................... 6

2.1.1 Account receivable and credit management..................................................... 7

2.1.2 Management of receivable.................................................................................... 8

2.1.3 Receivable policy................................................................................................... 12

2.2 Empirical literature review................................................................................... 14

CHAPTER THREE: METHODOLOGY

3.0 Introduction ............................................................................................................ 16

Research Design .................................................................................................... .

Population and sample size ................................................................................. .

Sampling techniques ............................................................................................. .

Date Collection Procedures ................................................................................. .

Questionnaire ................................................................................................. .

Interview ......................................................................................................... .

Documentary review ..................................................................................... .

Observation ...................................................................................................... .

Data type .............................................................................................................. .

Primary data ....................................................................................................... .

Secondary data ................................................................................................ .

Data Presentation and Analysis .............................................................................. .

CHAPTER FOUR: PRESENTATION, INTERPRETATION AND ANALYSIS OF DATA

4.0 Introduction................................................................................................................... 20

4.1 Accounting system at KDC ........................................................................................... 21

4.2 Problem facing credit control department in debt collection ................................ 21

4.3 Means used to recover over due debts..................................................................... 24

4.4 major factors affecting receivable management in organization ......................... 25

4.5 Procedure used to ensure effective collection ....................................................... 26

CHAPTER FIVE: CONCLUSSIONS AND RECOMMENDATIONS

5.0 Introduction .................................................................................................................... 28

5.1 Conclusions..................................................................................................................... 28

5.2 Recommendations....................................................................................................... 29

APPENDICES

APPENDIX A: References 33

APPENDIX B: Questionnaires................................................................................... 35

APPENDIX C: Interview guide.................................................................................. 37

APPENDIX D: Work Plan........................................................................................... 38

APPENDIX E: Budget................................................................................................. 39