DOI: https://doi.org/10.18371/fcaptp.v1i28.161909

TRADE POLICY IN THE ASPECT OF TRADE CREDIT IN GROUP PURCHASING ORGANIZATIONS

G. Zimon, A. Ostrowska-Dankiewicz, R. Dankiewicz, V. Baranovska, I. Zelenitsa

Abstract


The question of managing of financial liquidity is relevant for the future development of any enterprise.The improvement of the financial security of small enterprises has a positive impact through cooperation within procurement groups.It is determined that the procurement group represents a specific form of association of small and medium-sized businesses for the purpose of conducting joint purchases.Such associations have been operating successfully in many countries of the world for a long time, Poland is no exception, whose experience may be useful for Ukraine.

It was found out that trade credit is a commodity form of a loan provided by sellers to buyers in the form of a delay in payment forsold goods, provided services.

The purpose of the study is to analyze and determine the role of trade credit and risk management of receivables within the framework of implemented trade policy of purchasing groups.

This article explores the peculiarities of the activity and focuses on the issues of trade credit management at Polish enterprises that cooperate in purchasing groups. There were monitored 28 Polish trade enterprises operating in the construction industry for 2014—2016.

Also there were analyze the mechanism of the influence of the company within the procurement group on the construction of a competitive advantage. It is proved that in many countries a significant part of the current funding working capital needs covered through trade credit, which is an important instrument of trade policy within the framework of competition in the market.After all, the company has the opportunity to receive discounts on early repayment of obligations and use of the maximum term of the credit.

It is proved that commercial credit is the cheapest source of financing for a company's assets, and the creation of a commercial credit management strategy is based on liability management policy.There are three main strategies for managing receivables: conservative, aggressive and moderate.The analysis shows a moderate conservative strategy for Polish companies operating in procurement groups and using discounts for early repayment of their obligations before suppliers.


Keywords


group purchasing organizations; trade credit; accounts receivable management strategy; trade credit classification; trade policy.

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References


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Woźniak, D., Sokołowska-Woźniak, J., Jankowiak, B., Cwynar, A., Cwynar, W., Ostrowska-Dankiewicz, A., & Dankiewicz, R. (2018). Trade credit in Polish companies — an empirical analysis of macroeconomic factors influencing payment delays. Bisiness and non-profit organizations facing increased competition and growing custamers demands. A. Nalepka, A. Ujwary-Gil (Eds.). Nova Sandec.

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Zimon, G. (2017). An analysis of level of net working capital in companies operating in purchasing groups. Economic and Social Development (ESD) Book Series : 20th International Scientific Conference on Economic and Social Development (ESD) in Prague, Czech Republic, 2017, April 27—28. Prague.


GOST Style Citations


Al-Ammouri A. Probabilistic models reliability of information and control systems / A. Al-Ammouri, H. Al-Ammori, A. Klochan, A. Degtiarova // Journal of Sustainable Development of Transport and Logistics. — 2018. — № 3 (1). — P. 60—69.

Beck T. Financing patterns around the world: are small firms different? / T. Beck, A. Demirgüç-Kunt, V. Maksimovic // Journal of Financial Economics. — 2008. — № 89. — P. 467–487.

Blair R. D.  Group purchasing organizations, monopsony, and antitrust Policy / R. D. Blair, C. P. Durrance // Managerial and Decision Economics. — 2014. — № 35 (7). — P. 443— 444.

Burns L. R. Hospital purchasing alliances: Utilization, services, and performance / L. R. Burns, J. A. Lee // Health Care Management Review. — 2008. — July/September. — № 33 (3). — P. 203—215.

Dankiewicz R. The Role of Merchant Credit Insurance in Processes Stimulating the Economic Security of Companies / R. Dankiewicz // Economics, Entrepreneurship, Management. — Lviv : Lviv Polytechnic, 2017. — P. 1—7.

Dankiewicz R. Ubezpieczenia w procesie zarządzania ryzykiem na przykładzie przedsiębiorstw zrzeszonych w Podkarpackim Klubie Biznesu / R. Dankiewicz, A. Ostrowska-Dankiewcz // Aktualne problemy wybranych ubezpieczeń majątkowych / ed. M. Kaczała, J. Lisowski, M. Osak. — Poznań : Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu, 2014. — S. 26—38.

Fonseca L. ISO 9001: 2015 edition-management, quality and value / L. Fonseca, J. P. Domingues // International Journal of Quality Research. — 2017. — № 1 (11). — P. 149—158.

Ge Y. Financial development, bank discrimination and trade credit / Y. Ge, J. Qiu // Journal of Banking and Finance. — 2007. — № 31. —  P. 513—530.

Guariglia A. Credit channel, trade credit channel, and inventoryinvestment: Evidence from a panel of UK firms / A. Guariglia, S. Mateut //  Journal of Banking and Finance. — 2006. — № 30. — P. 2835—2856.

Long M. S. Trade credit, quality guarantees, and product marketability / M. S. Long, I. B. Malitz, S. A. Ravid // Financial management. — 1993. — № 22. — P. 117—127.

McGuinness G. European trade credit use and SME survival / G. McGuinness, T. Hogan, R. Powell // Journal of Corporate Finance. —  2018. — № 49. — P. 81—103.

Nollet J. Should an organization join a purchasing group? [Electronic resource] / J. Nollet, M. Beaulieu // Supply Chain Management: An International Journal. — 2005. — Vol. 10 — №. 1. — P. 11—17. — Available at : https://www.researchgate.net/publication/242337545_Should_an_Organisation_Join_a_Purchasing_Group.

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Rytko P. Zarządzanie kredytem handlowym w małych i średnich przedsiębiorstwach / P. Rytko. — Warszawa : Diffin, 2009. — S. 25—26.

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Tella E. Motives behind purchasing consortia / E. Tella, V. M. Virolainen // International Journal of Production Economics. — 2005. — Vol. 93 (1). —  P. 161—168.

Woźniak D. Trade credit in Polish companies — an empirical analysis of macroeconomic factors influencing payment delays / D. Woźniak, J. Sokołowska-Woźniak, B. Jankowiak, A. Cwynar, W. Cwynar, A. Ostrowska-Dankiewicz, R. Dankiewicz // Bisiness and non-profit organizations facing increased competition and growing custamers demands / ed. A. Nalepka, A. Ujwary-Gil. — Nova Sandec, 2018. —  Vol. 17. — P. 627—644.

Zaramdini W. An empirical study of the motives and benefits of ISO 9000 certification: the UAE experience / W. Zaramdini // International Journal of Quality & Reliability Management. — 2007. — № 24 (5).  — P. 472—491.

Zimon D. The impact of the implementation of quality management system on operating cost for small and medium-sized business organizations affiliated to a purchasing group / D. Zimon // International Journal for Quality Research. —  2015. — № 9 (4). — P. 551—564.

Zimon G. Influence of group purchasing organizations on financial situation of Polish SMEs / G. Zimon // Oeconomia Copernicana. —  2018. — Vol. 9. — Is. 1. —  March. — P. 87—104.

Zimon G. An analysis of level of net working capital in companies operating in purchasing groups / G. Zimon // Economic and Social Development (ESD) Book Series : 20th International Scientific Conference on Economic and Social Development (ESD) in Prague, Czech Republic, 2017, April 27—28. — Prague, 2017. — P. 531—537.





Copyright (c) 2019 G. Zimon, A. Ostrowska-Dankiewicz, R. Dankiewicz, V. Baranovska, I. Zelenitsa

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ISSN (print) 2306-4994, ISSN (on-line) 2310-8770