Collection Costs

The implications of relaxed credit standards are (i) more credit, (ii) a large credit department to service accounts receivable and related matters, (iii) increase. in collection costs. The effect of tightening of credit standards will be exactly the opposite, These costs .are .likely to be semi-variable. This Is because up-to a certain point the existing staff will be able to carry on the increased workload, hut beyond additional staff would he required. These are assumed to be included in the variable COS! per unit and need not be separately identified.

reCAPTCHA is required.

Share This