Research Paper

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CHAPTER ONE
1.1 INTRODUCTION
Management over the accounts receivables plays a big role in organizational performance. Lack of accounting information over debtors in the organizations may directly or indirectly affect the organization’s performance. Directly is when the organization is unable to know where to go due to lack of effective management over the accounts receivables. Indirectly is where people start to question about the accountability in the organization. Accounts receivable often constitutes a significant portion of assets and are, therefore, a major business investment. Accounts receivable is very important investment often dominating fixed assets investment. Effective management of accounts receivable presents important opportunities for enterprises to achieve strategic advantage through improvements in customer services, cash management, and reduction in costs. (Nealon, 2005) This proposal will have three chapters. Chapter one will explain about the research problem, Chapter two will cover literature review and Chapter three research methodology. 1.2 HISTORICAL BACKGROUND OF THE STUDY

1.2.1 STANBIC BANK
STANBIC is a private commercial bank that came into being in May 1995 when standard bank group acquired the operations of Meridien Biao Bank Tanzania Limited. It has got 9 branches and 2 service centres in the country:

Kariakoo branch in Dar-es- Salaam, Main branch, Industrial branch, Mayfair branch, Arusha branch in Arusha, Moshi branch in Moshi, Mwanza branch in Mwanza, Mbeya branch in Mbeya, Stanbic centre branch in Dar -es- Salaam, Bulyanhulu in Kahama (service centre) and Shinyanga ( service centre). STANBIC manages accounts receivable in the following ways:

i)By checking the financial health of a new customer before offering them credit. ii)By asking a new customer for five business references and normally they don’t neglect to call them. iii)By not offering too generous discounts, such as 3% for payment in ten days. A better rate is 1.5% cash discount. This cost them less. iv)By charging a late fee of 2% per month to customers who pay late and charge back customers who take discounts after the discount periods. v)And lastly, by making follow up on late payers with phone calls and letters. These may seem a bit extreme, but the first letter should go out the very day the amount is one day late.

1.2.2 HISTORICAL BACKGROUND OF THE PROBLEM
Many years ago, about 600BC, there was a trade between West Indies and Middle East traders who used to trade with Egyptian traders. These trade partners had mutual trust for one another, and hence were trading largely in good faith, regarding trade as a service rather than profit oriented. This notion was later proved a failure due to the fact that, there was a substantial increase in the number of traders from West Indies and Middle East. The local Egyptian traders started to be more cautious, and started to limit, thereby limiting credit terms to their trade partners from Middle East and West Indies (Nealon, 2005). In pursuance of minimizing the possible losses for non-payment by unfaithful customers, the concept of managing accounts receivable is said to have started during that era of merchant trade between West Indies and Middle East (ibid). 1.3 PURPOSE OF THE STUDY

The purpose of this study is to find out whether there is effective management over the accounts receivables. 1.4 STATEMENT OF THE PROBLEM
This study will find out whether there is effective management over the accounts receivables. Past experience in Africa shows among many of the failures in banking industries are those ones having poor and improper management over the accounts receivables. i.e. specifically on the Collection of over due dates and options used for recovering overdue debts. These problems have been affecting performances of many commercial banks as well as financial institutions (Waweru & Kalani 2009). In this study, the researcher is mainly interested in the effective...
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