Philippine E-Journals

Implications of Uncollected Accounts to Fiscal and Operational Policy: A Case of Realty Corporation

Joel B. Tan

Discipline: Accountancy

 

Abstract:

Uncollected account is a critical indicator of financial volatility, profitability, and customer satisfaction. This business research sought to address the uncollected receivables of a realty corporation in Davao City that brought the organization to difficult cash position and exposed its financial instruments to liquidity and credit risks for years. The study employed a qualitative, case study design. Data were gathered and analyzed through direct interviews with experts, phone surveys, and financial statement audit. The instrument used was a self-constructed interview guide validated by experts. The “case analysis and business problem solving model”, a scientific process approach to any business problems, was utilized as a tool in identifying the principal problem and the best alternative solution. Results of the analyses and evaluation suggest that hiring an in-house credit and collection personnel will yield the greatest value of net advantage among other alternatives drawn. When properly executed, supported and sustained, the best course of action shall help the company maintain a high quality of receivables in terms of size and age, establish responsibility and accountability in its collection policies and strategies, reduce delinquencies and bad debts at a tolerable rate, increase chances of recovery and salvaged revenues, and improve its cash flow condition and exposures to financial risks.