Does practice make perfect? Conclusion & saying farewell

In this last post the creditcrunchers would like to finalize with their findings of the eventual, submitted paper and tell something about the team's synergie. This last post also means the end of our blogging existence as the true social financial influencers we were.

At first we would like to mention that good project management is key, but efficiency in effective writing can also come in handy. Thanks to good communication with the team members we managed to get the job done and therefore we have respected the deadline of submitting our paper.

As honesty obliged us we had to admit that we sadly had to re-orientate on the direction we wanted to  go in our research. This is the reason why our blogspot might not seem to bring a consistent set of topics or story. We were a little over ambitious when we wanted to relate the Quantitative Easing policy to the use of trade credit in Belgian organizations. During our initial research we had to conclude that we could not get enough data on the quantitative easing hypothesis because of the short existence of this recent phenomenon. The eventual title of our paper became: " the impact of a stock notation on the use of trade credit for Belgian organizations". As the true nationalists we are, we held our narrow scope solely to focus on Belgian organizations. Just kidding, at uni we learned that a narrow scope is more interesting to come to clear findings.

Contrary to previous conducted research, we focused on the length of extended trade credit instead of the amount of credit. The conclusion of our paper is as follows: No significant difference in trade credit days can be noticed between public and private firms.

While focussing on the subject of trade credit, we gathered some useful insights.

Let’s conclude our final post by revising some of the things we learned about trade credit.

• On the suppliers side, trade credit might come in handy to improve sales. Trade credit encourages customers to buy products, even when cash balances are low. Also, the flexibility of paying at a later moment can cause customers to buy larger quantities when prices are advantageous. 

• On the customer side, trade credit allows them more flexibility and space in their operations for the same reason as mentioned earlier.

• For companies, trade credit can be an option if traditional funding through financial intermediaries is hard. Banks and other institutions don’t have the same advantage as suppliers do when assessing credit worthiness. In addition to credit worthiness assessment, suppliers are more potent to enforce payments when the borrower is delayed in its repayments.