Beruflich Dokumente
Kultur Dokumente
Table of content
SL No
01.00
02.00
03.00
04.00
05.00
06.00
06.01
06.02
06.03
06.04
06.05
06.06
06.07
06.08
06.09
06.10
06.11
06.12
06.13
Items
Purpose
Policy Statement
Factors Involving In Receivable Management
Who Should Know this Policy
Definition
Regulations
Classification
Rules
Customer Assessment
Approval of Credit Limit
Security of Credit Limit
Application for Credit
Receivables, Reporting and Its responsibilities
Category of Receivables on the basis of Customers
VAT & TAX Deduction at sources
Deduction from Salary
Authentication of Accounts Receivable
Allowable Structure for Credit Sales
Category of Accounts Receivables
Audit of Accounts Receivables
Collection through Post Dated Cheque
Schedule-I
Schedule-II
Schedule-III
Annexure-I
Annexure-II
Page No.
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2
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01.00 Purpose
A major activity of the Energypac Electronics limited (EELL) is the generation of Revenue through
the Sale of goods and services which enhance promote or support its Production, Trading, Project
Implementation and Govt. Regulatory functions. Revenue Generated from sales are credited to
various departments to support their ongoing operations. The EELL Accounts receivable
Management and/or Credit policy has been developed to prescribe the proper methods by which
such revenue shall be collected and recognized. ............................................................I
02.00 Policy Statement
Revenue generated by the EELL shall be recognized & collected in one of two ways: Cash basis or
Accrual Basis. The Cash basis shall be used whenever payment for goods or services is to be received
in advance of their provision. If payment is due anytime during or after the provision of goods &
services, the accrual basis shall be employed. Variations of this
03.00 Factors involving in Receivable management:
The terms of credit granted to customers ;
The policies and practices of EELL in determining which customers are to be approved
for credit.
The paying practices of credit customers.
The vigor of the sellers, collection policies and practice.
The volume of credit sales.
04.00 Who should know this Policy?
Budget Area Administration
Management Personnel
Head of the Departments
Supervisors
05.00 Definitions
For the purpose of this policy, the terms used are defined as follows:
a) Accounts Receivable means receivable against all credit sales of goods and services except
non trading intercompany transactions.
Page 1
b) Benefit amount or product or gift or incentives offered to the sales persons or distributors
or dealers or retailers or any other person during various occasions or promotions.
c)
Individual users are who purchase goods directly from the company.
j)
Retailers are those groups of customers, who directly purchase goods from the company
and sale to final consumers.
k) Dealer/Distributors are those groups of customers who are engaged in business with the
company under a dealership or distributorship agreement.
l)
Corporate are those group of repeated customers who procures goods or services from
the company through Work Order or Purchase Order or under Corporate Agreement/Deal in
the Business to Business principle.
Classification:
Regulations are classified into two major categories:
I. General Sales
a) Corporate;
b) Retail;
c) Distribution; and
d) Show room
Page 2
Before allowing credit sales the concerned sales person will assess the customer and
the concerned manager will approve it on the basis of Category of business, Length
of Business History, Strength of Solvency, personal integrity & security against credit.
(Assessment Form Annexure-I & II)
06.02 Approval of Credit limit:
After assessing the customer, as well as on the basis of recommendation by the
immediate supervisor and vetting from Head of Finance & Accounts or Nominated
person by him, the concerned person will have to get approval of a credit limit from
the management of the company. Credit limit to be restricted in Software and it has
to be followed strictly.
06.03 Security of Credit Limit:
Credit limit is allowable upon receipt of any security in the form of:
a) A Security Cheque (Verified by the Finance & Accounts Department)
b) Irrevocable Bank Guarantee (issued by a scheduled bank)
c) Irrevocable Standby Letters of Credit or local LC.
06.04 Application for credit:
Every Customer (Retail, Distributor & corporate customer except those are issuing
Purchase/Work Order mentioning terms of payment) should approach on letter head
pad for enjoying any credit from the company for a specific period. Credit period shall
not exceed the period stated in the Schedule-I.
06.05 Receivables, Reporting and its Responsibilities
06.05.01: The Concerned sales person and immediate supervisor will be jointly
responsible for recovering the receivable against every single invoice before the
expiry of Credit period allowed.
Page 3
06.05.02: The Concerned supervisor will report any overdue receivable to the Head of
Sales, COO, and Accounts department within 3 (three) working days after expiry of
credit period with justification.
06.05.03: Head of Sales will submit an overall receivable aging report with justification
within 5 working days to CEO/COO on month closing basis.
06.06 Category of credit on the basis Customers
06.06.01: Retail (Credit against sales directly to shop owners)
06.06.02: Distributors & Dealers (Credit against sales to the customers who are under
dealership/distributorship agreement
06.06.03: Corporate
Departments)
(Companies,
NGOs,
Local
authorities
&
Government
Page 4
I 2015
06.14 Amendment
The policy may be amended time to time as the management thinks necessary.
A~prQved
By;
Page 5
Category of
Customers
Non enrolled
shops
Credit Limit
Credit Period
(days)
Security Required
Approving
Authority
N/A
N/A
N/A
N/A
Enrolled shops
30,000/=
Closure of the
month
Security Cheque/PDC
Head of Sales
Distributors
50% of
monthly
sales
Closure of the
month
1. Bank Guarantee
2. Post Dated Cheque
COO
Dealer
50% of
Proven
monthly
sales
Half yearly
Closure
As per
agreement
Enrolled
Corporate
Non Enrolled
Corporate
&
Individual
Customers
Inter-company
COO
As per agreement
(Maximum of 45
days)
COO
50,000/=
Maximum 21 days
N/A
Maximum 30
days
COO, In special
cases CEO may
recommend for any
credit limit.
N/A
Schedule: II
Category of Receivable
Period of Receivable
Within allowed Credit Period
1 to 15 days overdue
16 to 30 days overdue
31 to 60 days overdue
Overdue above 60 days
Status of Receivable
Very Good
Good
Excellent
Bad
Very bad
Grade of Receivable
A
B
C
D
E
Page 6
Schedule: 3
Set of documents for creating new customers account
Sl
1
02
Documents
Trade License
VAT Registration Certificate
03
04
05
06
07
08
09
10
11
12
13
TIN Certificate
Photographs
Bankers Certificate & Statement
Own Transport list
Manpower List
Guarantors Certificate
Business Address
Solvency / Credit Facility
Status
Comments
Page 7
Annexure-I
Written Application to be
submitted by Interested
Distributor/Dealer
Annexure-II
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Designation
Decision
Verified By
SE/MO/SMO
YES
NO
Checked By
AM/DM/RSM
YES
NO
Recommended By
Head of Sales/R&D
YES
NO
Approved By
COO
YES
NO