ABSTRACT
The main focus of this study was to determine the credit policy implementation and its impact on the overall financial performance of manufacturing companies in Laguna. The findings of this study can be used as a reference in the formulation of good controls with sensible credit policies toward efficient working capital management and in achieving a value-enhancing balance between profitability and risk minimization. This study utilized the descriptive correlational research method design that enabled the study to determine the relationship between the level of credit policy implementation and the financial performance level of selected manufacturing companies in Laguna. This study used a stratified random sampling method, the respondents of the study were 163 employees in charge of credit and collection of manufacturing companies in SEPZ – PEZA Laguna. The study used a Researcher-made instruments in a form of questionnaire via google form to identify the credit policy implementation and financial performance level of selected manufacturing companies in Laguna.
Using the four-point Likert Scale, the simple mean, and Pearson product-moment correlation, findings revealed that the levels of credit policy implementation and the levels of financial performance were extremely high among the manufacturing companies in Laguna. It implies that there is a strong positive relationship between the two variables since the p-value is all less than .05. These are all indicators of good controls which fosters the ability to pay and it reduces the risk of receiving late payment or missed payments.
Keywords: credit policy, financial performance, sales volume, accounts receivable, collection
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