Memorandum Circular 2018 -

To     :   All

            Attention:   Accounting Staff

                             CSS 2

         Those who are involved in sales, and receipt of payments from Customer

Subject:    Sales and Collection Operations/processes

Draft

Objectives:

1.  To standardize processes in recognition of sales and processing of

     of payments

2.  To increase sales and collection

3.  To remove confusion in said operation

The following shall be observed in sales, installment contract receivable: issuance of receipts, and recording of the same

What:

1.  Recognition of sales

     1. Sales is recognized irrespective of the DP, for as long as:

         1.  There is a consideration  payment evidenced by OR and deposit

               slip with validation number from the bank

         2.  There is as contract  PPA (at that bears at least the initial

               of the CMO

         Therefore the above must be present and submitted  to the 3rd floor

                 1.   before sales can be recognized

                 2.   before commission and other incentives can be paid

 2.   Interest on  the balance

       Lately the company has sold plots/services with zero interest

       The company employs level payment method using finance method

       for simplicity and ease of computation

       This simply involves multiplying:

       Principal  x interest per year x number of years / number of months of

       monthly installment

      E.g.   1,000 x 12% x 3 years  =  1,000 x 12% x3/36 =   P37.77

               Where:    P   =    27.77

                              i    =    10.00

   FOR ZERO INTEREST, ONCE THE ACCOUNT GOES INTO ARREARS

   THE INTEREST OF 1% PER MONTH (12%) per annum applies

   Interest on the balance can not be waived.

3.  Penalties that  is applicable is 4% per month compounded.

     At the behest of chief of finance or MD in charge of treasury and ICR, the penalties may be waived.

    When the account goes into arrears, for more than a year, it is better to cancel the contract and  offer new lot to the  customers

4.  Application of payment

    1. With insurance:

        Payments may be accepted and applied as follows:

        Insurance, penalties, interest and principal in that order

   2. Without insurance:

       Penalties, interest, and principal

5. Collection and  Forfeiture:

  The ICR must have 0 backlog in posting

   The ICR must  have an excel format to age the accounts on a current basis

     1. The  SOA is sent once to the customer upon  sale to have a single SOA

          notice thus saving us postage for sending SOA monthly

     2.  When the account goes into arrears a demand letter is sent to the customer.

     3.  A customer is allowed to go into arrears only once after which his account

 is in default and shall be forfeited.  IT IS BEST TO DO THIS TO CLEAR OUR ICR OF DEAD ACCOUNTS

     4.  A forfeiture letter, an attorneys cancellation of contract is sent by registered mail to the last known asddress of the customer.

     5.  We use the provision of the Maceda law 6552:

     100% forfeiture if account is less than 2 years old;

       50% forfeiture if account is more than 2 years  old

        Forfeiture is deemed complete upon receipt of the attorney's letter and 

        the 50% balane

       FORFEITURE PROCESSES SHALL BE VIGOROUSLY PURSUED TO COLLECT

--

PAGSASANAY SA TAGUMPAY (Training for Success)