Trade Credit Policy and Customer Value Analysis "A Case Study"

Abstract

Power as a potential / ability that has not been effective if implemented in a dependent relationship. This condition occurs in CV. X which has a role as an intermediary between supplier and customer. In certain situations, the supplier issues a policy unilaterally regarding early payment terms. This situation is exacerbated, when CV.X provides an extension of the customer credit period. This raises the problem of the time lag between payment of accounts payable and receivable receivables. The research methodology uses a single case study. This study aims to obtain informant information about the comparison of the amount of costs to be incurred with the benefits that will be obtained due to the application of trade credit policies. Data analysis was performed using the Miles and Huberman model. The results showed that the mark up of prices and product service quality were considered in determining trade credit policies. There is an indication of the behavior of cost stickiness in the price markup, taking into account the cost of capital, using the capital structure, controlling accounts receivable so that it affects the cost efficiency of CV.X. Trade credit policy can reduce cost stickiness through a compensation system.