Laws of credit in the philippines ( more
advantage on Creditor )
1. Usury Law
2. Two Installment Default rule under Civil
Law [ Art. 1484, RA 386]
- at least two installments must be overdue
before sale payable in installment can be
canceled.
3. No Deciency judgment rule in
Foreclosure of Chattel Mortgage
- in case the chatter foreclosed is less than
the account, the judgment creditor cannot
recover the deciency
4. Laws on Bouncing Checks
5. Court procedure in Replevin Cases
- sheriffs cannot seize property cases
6. Justice System
Credit and Collection Unit
Primary Function
-maximize prots and minimize bad debts
losses through proper credit evaluation of
each application and through efficient and
consistent collection follow-ups.
Maximize Prots:
a. Maximize Sales
b. Cooperation with other departments
Credit Department as a prot center
1. Support to sales effort
- Sales increase against accounts
receivables
2. Customer Counseling
- Wise counseling leads to saving many
customers and preserving protable sales.
3. Contribution to Finance
- To ensure continuity of business
operations.
4. Task force assignments
- assignments outside of the credit
function.
Credit - refers to the processing,
evaluation and extension of credit.
Collection - refers to activities related to
collection of accounts.
Role of Credit Manager
A. Responsible for the formulation of
credit policies.
B. Administration of credit operations
that will maximize sales & prot,
minimize loss & maintain satisfactory
turnover of investment in account
receivables.
- Research into economic conditions
and business practices
- Establish policies, procedure and
practices with respect to sale term,
nancing arrangement, types of
credit and use of capital.
- Must make a contribution in the
overall company planning.
- Direct all credit and collection
activities and responsible for the
interpretation and application of
policies.
- Plan, execute and coordinate
programs for the operation of the
credit department.
- Approve major credit extensions
decide borderline cases, reactive
dormant accounts.
Lower Positions:
1. Extension of credit in analyzing requests
2. Conducting credit investigations
3. Evaluating credit risks
4. Setting credit limits
5. Referring Credit to higher authority.
Operational Management:
1. Gather, organize and retain detailed
information pertinent to accounts.
2. Judgment and discretion, fair and just in
his dealings
