Credit Sales Management and Profitability in Selected Manufacturing Companies in Hargiesa, Somaliland

ABSTRACT The study is about credit sales management and profitability selected manufacturing companies in Hargeisa, Somaliland. The study examined the relationship between credit sales management and profitability. The specific objectk~es of the study were tO find out if there is a relationship between credit policy and profitability; to determine if there is a relationship between credit risk management and profitability and to examine if there is a relationship between credit collection procedure and profitability. And finally, the study sought to establish the relationship between credit sales management and profitability in selected manufacturing companies. The study used correlational research Quantitative design on a population of selected manufacturing companies. The study used a questionnaire for data collection. The data collected was analyzed using SPSS by using cross tabulation, frequencies and correlations analyses. The study found out that profitability has a significance relationship with credit policy, credit risk management, credit collection procedure. The study concluded that the problems of non-monitoring and the nonreview of the credit policy of organizations are causes of the profitability problems associated with credit sales. The study also concluded that the effective credit risk mitigation methods were not applied or used at those companies. Due to that, the default rates become high hence low profitability. The study recommended that the effective credit policy guidelines should be developed and adapted at those organizations that specify the course of action for granting credit, components of credit policies and recurring credit activities. The study also recommended that proper credit risk mitigation tools should be developed and adapt.