Effect of Credit Control on Account Receivables and Profitability of Some Selected Manufacturing Firms in Nigeria

Abstract

This study sought to establish the effect of credit control on account receivables and the
profitability of selected manufacturing firms in Nigeria. The study adopted an ex-post
facto design which involves events that have already taken place in the past. The study
comprises all manufacturing firms in Nigeria for which the purposive random sampling
technique was used to select five accountants from five manufacturing firms in Nigeria.
The study adopted secondary data that were extracted from the annual reports of audited
financial statements of five (5) manufacturing firms for the period 2013 to 2017. Data
collected were analyzed with the use of Pearson Product Moment Correlation
Coefficient (PPMC) and Multiple regressions at a 0.05 level of significance. The results
showed that account payable and account receivable are related and credit control has
a significant effect on the profitability of manufacturing firms in Nigeria, hence it was
recommended that account receivable must be properly managed and credit control
must be put in place to ensure firms’ profitability.