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Business Case of Company A and Costco Company Case Study


An invoice payment refers to a situation in which a business provides its services or conducts its transactions on credit. The seller mainly sells the goods but receives payment at a later date.

Whenever invoice payment guidelines are appropriately set, the customers make their payments on time and in accordance with the set guidelines. In a situation where a customer fails to stick to the required terms, essential measures are taken to ensure he or she checks on his or her payment discipline.

In this case study, we are taking a consideration of the business activities between company A and Costco Company. The major transactions made involve the selling of DVDs and games. However, it has been noted that the payment procedures are not appropriately followed by both the companies. In order to solve this problem, proper strategies need to be employed.

To begin with, company A will have to track the credit limit. This will involve an analysis of the outstanding credit before delivering the next sales. The findings will be presented to the company’s management staff who will take the necessary action.

A notification sent to the staff ensures a review of the procedures initially set and corrects any uncertainties that may arise. This will avoid future problems in invoice payment. Furthermore, this will enable a review of the invoice payments and correction on the outstanding credit.

Additionally, procedures that will provide a way forward on handling of delayed payment on invoices should be laid down. The staff should come up with procedures that will prevent customers from delaying delivery of payment on purchases made. This will enable the customer to prepare payment in advance in order to avoid consequences arising from late payments.

The company can also evaluate its partner’s financial condition. If institutions are facing challenges in implementing their mandates, it goes without question that they will have problems paying for their transactions. Evaluation of the financial situation of the partners will thus enable the company to establish the financial situation and set required measures to be undertaken in order to enable them honor their payments.

Negotiations on new payment terms may be another strategy to be considered. By reviewing the payments made and comparing them with the conditions initially set, the company can know if there may be need to renegotiate for new terms. The customers may be finding it hard to bear with the existing terms as a result of financial crisis. To avoid losses, new terms of transacting business can be negotiated.

The new terms will enable both parties to enjoy a comfortable position. Company A may also consider strategies that enable the customer to deliver payment with ease. This may include an earlier preparation of the invoices. For example, the company may decide to be sending the invoices together with the goods on delivery.

Organizing a payment plan for the customer may also be another effective way of ensuring proper payment of the invoices. This will enable the customers to establish outlined ways of paying for the goods sold to them.

For example, a plan can be laid out whereby the other company pays for the goods in installments in cases of financial constraints. This will serve as a motivating factor due to the fact they will have a chance to re-establish their business while conducting a business transaction at the same time. The client will be encouraged to organize a proper payment procedure of the invoices in order to sustain the business relationship.

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IvyPanda. (2020, January 5). Business Case of Company A and Costco Company. Retrieved from https://ivypanda.com/essays/business-case-of-company-a-and-costco-company/

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"Business Case of Company A and Costco Company." IvyPanda, 5 Jan. 2020, ivypanda.com/essays/business-case-of-company-a-and-costco-company/.

1. IvyPanda. "Business Case of Company A and Costco Company." January 5, 2020. https://ivypanda.com/essays/business-case-of-company-a-and-costco-company/.


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IvyPanda. "Business Case of Company A and Costco Company." January 5, 2020. https://ivypanda.com/essays/business-case-of-company-a-and-costco-company/.

References

IvyPanda. 2020. "Business Case of Company A and Costco Company." January 5, 2020. https://ivypanda.com/essays/business-case-of-company-a-and-costco-company/.

References

IvyPanda. (2020) 'Business Case of Company A and Costco Company'. 5 January.

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