it is a guide offering an organized and repeatable philosophy on selling on the rules, regulations and credit and collections procedures to manage daily operations. The goal for a credit collections plan is to clearly define these elements so that sales and collections employees conform to documented steps and procedures designed to optimize your resources, reduce credit risk, and improve overall cash flow.
46. WHAT IS
PRICING?
Pricing is a
process of fixing the
value that a
manufacturer will
receive in the exchange
of services and goods.
47. “PRICE THE
INVENTORY”
This is the next
activity after field
investigation had been
completed.
This is one area in
which the appraiser
encounters some
problem, where to get
pricing information.
48. SOURCES
OF
PRICING
INFORMATION
1.
• The client’s records
2.
• The manufacturer or supplier
3.
• Letters of inquiry written on
client’s letterhead.
4.
• Catalogues, sales and offerings
in newspaper and magazines.
51. 1.Perceived-Value Pricing
2. Value pricing
3. Going-Rate Pricing
4. Auction Type Pricing
5. Differential Pricing
Market-Oriented Pricing Method
52. IN DEVELOPING PRICE BASIS, CONSIDERATION
MUST BE GIVEN TO ALL PERTINENT FACTORS SUCH AS----
--
1. Price of manufactured equipment;
2. If imported, prevailing rate of foreign exchange and the
effect of realignment of world currencies, if any, and all
expenditures normally incurred in importation, such as in
land and ocean freight, insurance, bank charges and
commissions, consular documents, duties and taxes,
brokerage and arrastre and other landing charges;
3. Cost of handling and transportation to the site;
4. Cost of installation
53. • Depreciation in appraisal is “ observed depreciation” to distinguish the results
and process of personal inspection from those of theoretical estimates.
• Observed depreciation – is the actual or accrued depreciation, giving consideration
the destoriation, maintenance, conditions under which used, utility and remaining
serviceable life in comparison with a new unit of like kind.
• Depreciation as normally and basically considered by the appraiser is judged by
personal inspection and observation of the individual units of physical property.
• Sound Value – is the estimated amount of money required to acquire the same or
similar property as of a certain date less depreciation due to all causes.
54. • Cost of Reproduction New (CRN)
- is the estimated amount of money to acquire like kind of an asset
or group of assets, taking into consideration current prices of materials,
manufactured equipment, labor, contractors overhead, profit and fees and
all other attendant cost associated with its acquisition and installation in
place, but without provision for overtime or bonuses for labor and premium
premium for materials.
• Credit investigator
- the appraisals were conducted by them for the purpose only of securing a
rough estimate of the credit applicant’s asset to determine his credit worthiness.
57. THE CREDITOR SHOULD BE ABLE TO ANTICIPATE THE
POSSIBLE DEFENSES THAT A DEBTOR WOULD SET UP IN
CASE OF FORCED COLLECTION. THE FOLLOWING ARE THE
MORE COMMON DEFENSES PUT UP BY DELINQUENT
DEBTORS AND SHOULD ALERT THE CREDITOR ACCORDINGLY.
58. COMMON DEFENSES PUT UP BY DELINQUENT DEBTORS
1. Lack of authority on the part of the person signing the
evidence of indebtedness.
2. Defense of Absence of Proof of "Genuineness and Execution“
3. Defenses in Issuance of Checks
4. Defense of Lack of Evidence of Due Delivery of Proper
Acceptance
5. Usual Defenses in Secured Receivables
6. Defenses in Case There is Already a Judgment and/or Writ of
Execution
59. Lack of authority on the part of the person signing the evidence of
indebtedness.
• The application for credit
• Purchase Orders (P.O.) or Job Orders
• Delivery Receipt (D.R.’s)
• Accident Cases
60. Defense of Absence of Proof of "Genuineness and Execution
• Usually, in contracts, there are two spaces for witnesses. Make sure that at least
one of these is signed by your own witness, possibly even the two witnesses
should be creditors' representatives.
• Absence of the debtor in the country at the time of the approved evidence of
indebtedness was signed. Sometimes, the instrument is dated at the time the
debtor is abroad. Make sure that he is at least in the Philippines when the
instrument is made and dated.
• For expediency, sometimes, the debtor is asked or allowed to sign in blank forms
of indebtedness. This is a very dangerous practice as the debtor can prove that
he signed in blank forms and it opens the possibility of the creditor being sued
for falsification or fraud
61. • Unauthenticated instruments – It is always best to have any contract or
other evidence of indebtedness notarized since under the Rules on
Evidence, its due execution and genuineness is presumed.
• If the indebtedness is not evidenced by any written instrument, the
defense Under the “Statue of Frauds” may be invoked and the contract
become unenforceable
• Sometimes, differences in the dates of Invoices, the supporting,
promissory notes, chattel mortgage and other evidences of
indebtedness is set up as defects in the due execution and genuineness
of the instrument or obligation.
62. Defenses in Issuance of Checks
• Signature in the specimen card varies from the signature in the
check.
• The signature and/or entry in the check is forged.
• . The check was issued without consideration.
63. Defense of Lack of Evidence of Due Delivery of Proper
Acceptance
• No delivery receipt or proof of delivery,
• No acknowledgment of receipt by a person duly authorized to
receive and accept deliveries;
• Unsatisfactory quality or quantity of the goods delivered or services
rendered;
• Non-compliance with warranties for labor and/or parts;
64. • Violation of the "Usury Law" and of the "Truth in Lending Act." The
creditor is sometimes furthermore sued criminally for violation of
these laws. [However, read Chapter on Usury.]
• Actionable documents" not alleged or denied under oath;
• Novation of contract which releases the guarantor;
• Estoppel due to changes made in the contract
65. Usual Defenses in Secured Receivables
• In case of foreclosure of a chattel mortgage, no deficiency judgment
maybe obtained for the balance;
• The mortgaged property is "cannibalized," or sold to third parties;
• Rescission of the contract will prevent the creditor from recovering
the balance of the account,
• Non-registration or improper registration of chattel mortgage;
• Missing collateral and securities;
• Real estate as "additional collateral" to a debt, may be considered an
invalid agreement.
66. Defenses in Case There is Already a Judgment and/or Writ of
Execution
• the judgment debtor “disappears”;
• the judgment debtor has no leviable properties;
• the judgment debtor “appeals” and therefore, in the meantime, the
judgment could not be executed;
• the judgment is novated.
