ICT in Finance :: ICT Essays

Credit Control ============== Credit control is a database and it tells the company when payments need to be made. By implementing a credit control procedure manual Boots are enforcing the company's individual characteristics. They are showing they have management and company values that will inform their customers that they have presence, confidence, diligence, and that they are prepared. Companies that have these values are less likely to suffer from late payment or bad debt (aged debts). Controlling their company's credit, when they no longer control their debtors the cost of financing their company's cash flow is at the mercy of those very same debtors. Boots need this because it tells them when their debts need to be made so they wont get into deeper debts. If they didn't use this method the company could go bankrupt in a few months. Forecasting Boots need to use forecasting when they seeing what products will be needed in the season because they will not buy furry body warmers for babies in the summer, these will be used in winter time this will make sure that boots do not lose any customers to other rivals Supplier Payments Supplier payments are payments that need to be paid to the company they bought their stock of. So if Boots needed to pay supplier payments this would mean that whatever supplier Boots bought their food and drink of these are payments that are to be made to the supplier. Boots gets sent an aged creditors report, this tells them the aged debts, will show the Finance Department who the company owes money to. This helps boots because they wont get behind with paying money they own to different people, so they wont get into deeper debt and that's why Boots needs this type of method. BACS (bankers automated clearing system) BACS means that you can now pay the creditors directly into their own bank accounts. Increasingly suppliers are receiving payment directly into their Bank Account via BACS, the automated clearing system. This means that cleared funds are available on the day you are paid - unlike the time delay associated with cheques, there is no possibility of cheques getting lost or delayed in the post, you are saved the time and trouble of paying cheques into your bank account, accounting procedures are simplified and administrative costs reduced. Boots would use this when they owe money to the suppliers because they have bought their food from them like the sweets the drink they sell. Boots needs this because when they pay the creditors by cheques they can get lost so the creditors will think that they haven't paid causing the company to go into debt with the creditors.