ABSTRACT Managing credit particularly accounts receivable effectively and efficiency way is one of the most difficult tasks under the managers, because accounts receivable is the second broadest part of company's assets after Cash. While on the IV Accounts receivable are amounts owed by a customer on account. They are from the sale of goods and services. These receivables generally are expected to be collected within 30 to 60 days, and they are the most significant type of claim held by a company. To identify the level of managing accounts receivable in selected manufacturing companies in Mogadishu, Somalia in terms of: • Determining the effect of credit risk management on profitability in selected manufacturing companies. To determine the level of profitability in selected manufactured companies in Mogadishu, Somalia. The study was primarily focusing on 3 manufactured companies namely Ilatango Factory, Raxo Factory, and ZamZam water Purification Company. All those manufactured companies are located at Mogadishu, Somalia. The target populations of this study were finance manager, and customers. Those manufacturing firms were chosen because around 60% and above of their sales are credit based; secondly, they are one of the largest manufacturing sectors in Somalia. Credit management is the process of planning and controlling credit accounts and it plays great roll the profitability of the firm. Effective controlling is characterized to increase sales, to Reduces bad debts, to Increases profits, to build customer loyalty, to build confidence of financial industry, to Increase company capitalization and to Increase the customer relationship.
