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A Case of Debtors and Creditors

GROUP 10

Summary
A 2 day workshop on HUMAN VALUES Participated by 24 top managers including

CEO Lead to the discussion on payment to debtors and creditors. Managers shared their views about authentic intent and policies.

Q. 1) SHOULD THERE BE A CLEAR FIXED POLICY REGARDING COLLECTION OF OUTSTANDING FROM DEBTORS ?
A Clear Policy and not a Fixed Policy Plays vital role in building strong relationship between Company and its

Debtors.
The policy should be clear one and not a fixed one. It should be in line with the market conditions.

During recession period the Debtors will not be in a position to pay their debts

on time. And therefore in such situation company should follow Flexible Policy by giving additional period to Debtors for payment.

If a company follows a fixed and not a flexible

Debtors Policy
then there are chances of losing its customer base

as the existing customer may shift to other suppliers.

During the downturn period If we are

expecting that our suppliers should give flexible payment options, then we should also give same treatment to our customers.

Q. 2) SIMILARLY, SHOULD THERE BE A CLEAR POLICY REGARDING PAYMENTS TO CREDITORS ON TIME ?


Yes, there should be Clear Policy regarding Payments to

Creditors
A well thought-out payment policy is a vital part of building a

strong and trusting relationship with its suppliers and other creditors.
Effective management of creditors is one of the easiest ways for

businesses to improve cash flow

As the company is dependent on its suppliers for its raw materials and other resources which are necessary for running its operations smoothly
if the company fails to fulfill its obligations to its Creditors on

time then the Creditors may not like to deal with the company in future which will affect the functioning of company .

If company has any difficulties in making payments to their suppliers at some time. It is essential to open discussions with suppliers as soon as possible to advise them of the issues and negotiate a payment plan. Open and honest dialogue with suppliers will build trust and enable them to provide support during

difficult times.

Q.3
Differential Policy of making Payments to
Large Monopolistic Suppliers Small Suppliers

Large monopolistic suppliers


are crucial Smooth flow of materials

Effect on production and further operations

Small suppliers
Ethically not right
But necessary to manage working capital needs

Q.4
Comments on actions of TELCO?
Not unethical as far as the parties concerned are

aware about the facts And are ready to cooperate.

Q.5 Reasons for CEOs Silence


To judge the managers point of view

regarding the debtors and creditors.


The CEO of the company is indulge in

unethical practices of the business.

Thank You

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