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Hi sir, for september 2016 exam question 16b)
Why is this a deficiency : Sales staff are responsible for assessing new customers creditworthiness and proposing a credit limit, which is then authorised by the sales director.
Thought the sales staff may have sales targets, even if they were to set unrealistic credit limits, anyway it will have to be authorised by the sales director in order to come into force.
This process is controlled. So why is this a deficiency ?
Because in march/june 2017 exam question 18b) its not a deficiency.
Thats why i dont understand why is it a deficiency in this question.
Sales staff and the sales director all want to maximise sales (they are usually judged on sales performance) so have incentive to set generous credit limits.
Better to have credit limits set by independent staff eg in accounts or a specialist credit control department.
Okay sir. So the main point here is because the sales staff have sales targets right ; whereas in march/june 2017 exam the sales staff dont have sales targets.
If they have sales targets its not appropriate to allow them to set credit limits.
Am i right sir ?
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