Credit Control ( or lack of on the small accounts)

[stevewool]

4 hours ago, Jack Peterson said:

 Yes that is so but the issue I write about is Business related ie; monies not paid for services or goods supplied

That is what ruined the business that Emma’s mum ran , a little store at the front of the house selling this and that , and most of the customers paying but those who was  on credit , well the business is not there no more , maybe all the folk are still around though.

[Dave Hounddriver]

18 minutes ago, stevewool said:

That is what ruined the business that Emma’s mum ran , a little store at the front of the house selling this and that , and most of the customers paying but those who was  on credit

That is what they tell us foreigners.  What they forget to say is that often the biggest consumers of "on credit" snacks and beverages are the immediate family.  

[Gary D]

2 hours ago, hk blues said:

It's strange and kind of contradictory that in a place where face is so important, people have no qualms about being in debt to friends, neighbours and families!  

My simple policy is that I lend small amounts but it's not a gift and I expect it to be paid back.  If not, as it's small, I will survive but no more loans to that person in future.  I haven't been let down yet but who knows. 

They have no qualms because the lender doesn't want to cause a loss of face asking for the money back.

[stevewool]

Emma has mentioned starting a little business up once back in the Philippines , but I told her not a chance , to much outlay for very little income, plus stress and I have just got rid of all my stress and I dont want anymore.

[Jack Peterson]

5 minutes ago, stevewool said:

Emma has mentioned starting a little business up once back in the Philippines , but I told her not a chance , to much outlay for very little income, plus stress and I have just got rid of all my stress and I dont want anymore.

 Little business ventures are fine until the crunch comes as it did for me over the weekend, Control the Credit and things should be fine But................ Steve, I am now thinking as you do especially when I am questioned about Cash flow and I decided to go through the books and Found what I found 

[Kuya John]

I've seen this sign often........."In God we trust, everybody else pays cash"

Once bitten twice shy......on a personal level, but in business you need a built in loss adjuster called % interest! morning all.

 

[Jack Peterson]

Just now, Kuya John said:

I've seen this sign often........."In God we trust, everybody else pays cash"

Once bitten twice shy......on a personal level, but in business you need a built in loss adjuster called % interest! morning all.

 

 That is what I have been saying JB and for once, Her that must be obeyed has listened but the proof of the pudding will be the eating so to speak 

[Jollygoodfellow]

2 hours ago, Jack Peterson said:

I decided to go through the books and Found what I found 

Seems to me no one was steering the ship if it comes as surprise of money owing. 

[Mike J]

I think many people who open small businesses don't have real world view of how profit margins work when a debt is not paid.  There are so many Sari Sari stores that profit margins are very small due to competition.  Let us assume 5% margin for the sake of argument.

So you buy 1 liter bottles of adult beverage for 95 peso, and sell it for 100 peso.  Your profit is 5 peso each bottle.  Not great but if you sell 20 of them, you have 100 peso profit and you can buy rice for your family.  Sell 19 for cash and 1 on credit and what happens?  Until you get paid, assuming you ever do, your net profit for those 20 bottles is ZERO.  But, often enough, store owner may still feel like they had a good day because there is 1900 peso in the till.  Do that enough times and the Sari Sari store becomes a Sorry Sorry I ever opened the store.

[hk blues]

3 minutes ago, Mike J said:

I think many people who open small businesses don't have real world view of how profit margins work when a debt is not paid.  There are so many Sari Sari stores that profit margins are very small due to competition.  Let us assume 5% margin for the sake of argument.

So you buy 1 liter bottles of adult beverage for 95 peso, and sell it for 100 peso.  Your profit is 5 peso each bottle.  Not great but if you sell 20 of them, you have 100 peso profit and you can buy rice for your family.  Sell 19 for cash and 1 on credit and what happens?  Until you get paid, assuming you ever do, your net profit for those 20 bottles is ZERO.  But, often enough, store owner may still feel like they had a good day because there is 1900 peso in the till.  Do that enough times and the Sari Sari store becomes a Sorry Sorry I ever opened the store.

And that's not taking into account the amount of capital invested in stock. I often wonder how such businesses survive.