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
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PAGSASANAY SA TAGUMPAY (Training for Success)
