An Investigation of the Debt Management Practices on the Performance of Premier Service Pharmaceuticals (PSP)

Abstract

Total Debtors increased from $462 409.67 to $536 009.80 which is an increase of 13.73% between

the years 2012-2013 and also increased from $536 009.80 to $633 009.98 which translates to an

increase of 15.3% between 2013-2014. Some debtor balances remained unchanged because

services are no longer being offered to them since they failed to pay anything in 2012 thus there

was no movement in their accounts up to end of 2014. This raised an alarm about the debt

collection policy. This has prompted need for this research in which the study analyses the Debtors

collection policy for Premier Service Pharmaceuticals. The aim of the research was to understand

the Debtors collection policy for the organization, personnel responsible for policy formulation

and implementation. It was also the objective of this research to identify controls which are in

place over debt collection and the period of reviews of controls. Also the research aimed at

recommending the best practices in enhancing debt collection of the local authority basing on

research findings and literature review.

A review of related literature was also carried out in a bid to establish what other renowned

authors had had to say on the issue of debt collection. The main source of related literature was

internet journals. The study used descriptive research design where there was both use of

questionnaires and interviews because of its cost effectiveness. Sources of data, research

instruments, populations and samples were given in the research. Primary data was presented

using diagrams, pie charts and tables, to illustrate research findings and responses gathered.

Research findings showed that, debt factoring, payment plans, follow up and rotation of debt

collection customers can enhance debt collection in the organisation. As a result, the research

recommended that the organisation should establish the best practice highlighted in the research.