Account Receivables in India
First and foremost happy new year to all circle friends. Hope 2014 is better for all of us.
I was contemplating where to discuss this topic but I will share in both business circle and AAP professionals circle.
I find it extremely pathetic governance when I experience my payments not being made even after 180 days of delivering to satisfaction service. They just don't pay their dues and keep pushing.
What options does a small company have against big companies. There are no collection agencies here. If you stay honest how do you collect money from these defaulters.
Please advise more
I was contemplating where to discuss this topic but I will share in both business circle and AAP professionals circle.
I find it extremely pathetic governance when I experience my payments not being made even after 180 days of delivering to satisfaction service. They just don't pay their dues and keep pushing.
What options does a small company have against big companies. There are no collection agencies here. If you stay honest how do you collect money from these defaulters.
Please advise more
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Ms Naina , debt collection agencies help customers recover outstanding debt by varous methods. While retail collection agencies are common and you would have at times recd calls for making payment of mobile bills over due or credit card dues/ over due EMI etc another class of debt collection agencies work in the commercial debt space. These agencies typically engage with the client at an early stage i.e just after the debt has become overdue. they agree on a fee which is around 15 % of the debt collected plus out of pocket expenses. They get your authorization first. Initially the try soft collections like reminders , phone calls , repeated emails followed by personal visits. The increase pressure by various methods with the objective to bring the parties on a negotiating table. Information to family members , community pressure , local police station contacts , constant presence builds a lot of pressure. They will next move to legal stage if things don't work. They have trained lawyers who have contacts and expedite cases etc. Thus a debt collection agency is useful is a significant amount of money is stuck and your own efforts don't work. This is legal and RBI has guidelines for debt collection agencies. more
Jan 02
Naina, while I was not keen to clarify the corruption issue, however, my keeping quite would give an impression otherwise. While you could be right in your assessment, there are exceptions (as we are witnessing in politics too, now a days). I have worked for some of the most ethical companies worldwide (GE, Wipro, Godrej) in senior management capacity and what my organisation, TanServ, follows on ethical conduct is exactly that. We have signed FCPA and other related agreements with most of our partners and if I can mention the single important factor in the fabric of our company, it is abiding by the law of the land and to be one of the most ethical companies around. more
Jan 02
MSMED act stands for Micro , small and Medium enterprises development act which was passed in 2006 in order to better regulate this sector and provide a framenwork. I am sure you know that there is a specific ministry in the union govt for MSMEs the act defines the categorization , rules, applicable guidelines etc. I suggest you check internet. With respect to the payment issue, the specific extract is : Q.15. What are the guidelines for delayed payment of dues to the MSE borrowers? A.15. With the enactment of the Micro, Small and Medium Enterprises Development (MSMED), Act 2006, for the goods and services supplied by the MSEME units, payments have to be made by the buyers as under: (i) The buyer is to make payment on or before the date agreed on between him and the supplier in writing or, in case of no agreement, before the appointed day. The agreement between seller and buyer shall not exceed more than 45 days. (ii) If the buyer fails to make payment of the amount to the supplier, he shall be liable to pay compound interest with monthly rests to the supplier on the amount from the appointed day or, on the date agreed on, at three times of the Bank Rate notified by Reserve Bank. (iii) For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the interest as advised at (ii) above. (iv) In case of dispute with regard to any amount due, a reference shall be made to the Micro and Small Enterprises Facilitation Council, constituted by the respective State Government. regds more
Jan 02
Would be interested to know how collection agencies work. Is it a way for companies here to outsource there corruption? Would like to know the process? more
Jan 02
