COLLECTION STRATEGY TO REDUCE PAYMENT OVERDUE: CASE STUDY PT. XYZ

• Main Author: Rayan Harun Al Rasyid, Khalid
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/62689
• Institution: Institut Teknologi Bandung

PT. XYZ is a PMA (Penanaman Modal Asing) company that’s operates in consumers goods in Baby Care product & incontinence care products in Indonesia, Philippines, & Vietnam. In Indonesia PT. XYZ using OEM process system which is the company hiring 3rd parties to manufacture their product & resell the finish goods product to the customer. OEM stands for Original Equipment Manufacturer. In 2020 PT. XYZ encounter collection issue due to Covid-19 pandemic, because of this situation many companies effected by this Covid-19 pandemic which affecting their business operation and their cash flow. The effect from Covid-19 also affecting PT. XYZ in customer payment, because so many late payments from customer it’s creating an issue in PT. XYZ cash flow. The purpose of this research is to solve collection issue in PT. XYZ. The research is conducted to solve PT. XYZ collection issue. Based on the analysis that been done, there are several root issues that create this situation. First there are no due diligence process for new customer to check their company background. Second the sales target that’s too high to achieve. Third there no control in customer credit limit. Forth due to Global Pandemic of Covid-19 situation which makes the companies to change their business model. The analysis for this research is using an Overdue Ratio calculation to see the company collection performance how well the company manage their Account Receivable which impact company cashflow. In this research there are another analysis been done such as Accounts Receivable turnover ratio, this analysis is to see how healthy the company collection based on sales ratio. The last analysis using Aging Analysis from Aging Bucket to see how many customers have problem in their payment. After the research the author proposed PT.XYZ to create new promotion which is Cash Discount Promotion to solve the outstanding invoice more than 60days and propose a recommendation to implement credit control. To implement the new project PT. XYZ needed budget around IDR 2.2billion to implement Cash Discount Promotion, by implementing the new promotion PT. XYZ expect to receive fresh cash around IDR 76Billion. The other benefit for PT. XYZ not just solves the collection issue that make the company postponed their business expansion but also create assurance to head office to give PT. XYZ another loan for expanding purposes.