Management of account receivables-sales force dilemma

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Management of Account Receivables-Sales force Dilemma

Ramesh is a successful sales representative in a continuing security B2B firm. His major earnings come from incentives/commission. He has been given a target to achieve sales of Rs 500,000 every quarter. In order to achieve his target, he is constantly meeting prospective clients, making false promises and giving them attractive proposals without checking back on the sales policies of the company.

At the end of quarter, he achieves sales of Rs 5, 50,000. His CEO is very happy and asks the CFO to release the incentive immediately. The CFO checks the account of clients to whom Ramesh has sold the services during the quarter. He finds that payments have not been received from any of the clients to whom Ramesh has sold in the quarter and money is lying in the account receivables. He tells the CEO that incentive/commission should not be released till the money is received from the client. The CEO tells him to follow-up with the clients and release incentive to which the CFO says that dues for the first 3 months of business should be realized by sales representative after which the matter will be taken over by the Credit/AR team.

Question:

Explain major roles and responsibilities of sales manager? Should Sales force be used for collection of account receivables? If yes, why, If no, why?

Reference no: EM132977440

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