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In difficult period, it’s difficult to sell goods; it’s more difficult to recover debts
As unable to access bank loans, a lot of businesses decide to “borrow” capital of partners. As a result, businesses have become both big debtors and creditors.
Nguyen Dang Hien, General Director of Bidrico, a drink company, said that nearly all the businesses he knows are facing difficulties in capital arrangement. “A lot of my friends have to hide themselves because they cannot pay debts. They themselves cannot recover debts from their partners,” he said.
It’s difficult to sell goods, but it’s more difficult to recover debts
Nguyen Thi Hong, the owner of the fabric wholesale kiosk at Tan Binh Market, has recruited two employees, who are in charge of demanding debt payment. A private enterprise in district 12, which purchases fabric from Hong to make garments, is still owing one billion dong to her.
“Under the contract, the company should have made payment in June 2011. Later, the owner of the company proposed to make payment in July. I accepted the proposal, because the company’s is my loyal client. However, they did not pay in August and in September. In October, I called him again to urge to pay debts, but I could not contact him,” Hong said.
Also according to Hong, she was so happy when she could sell goods in the context of the gloomy market. However, she has realized that it is much more difficult to demand debt payment than looking for buyers.
Nguyen Thi Thuy from NTN, a trade and media company in district 1 of HCM City has only taken back the debt worth 30 million dong, after asking for intervention of a law firm. Thuy said that after paying 50-70 percent of debts, a lot of companies deliberately delay the payment of the remaining money, because they want to use the money as their working capital.
Prestigious clients, such as supermarkets, only make payment 45 days after the deliveries, while others only make payment after several months, according to Le Thi Thanh Lam, Deputy Director of Saigon Food. “Our company loses tens of millions dong just because of the late payment,” she said.
As it is too difficult to take back debts, Pham Ngoc Thuy, the owner of Thanh Long sweeties Company has decided not to sell goods to shops, wholesale and retail kiosks at traditional markets this Tet season, but it will only sell goods to supermarkets.
“Though supermarkets are also 1-2 month late in making payment, but I feel more secure when selling goods to them,” Thuy said.
Since the overdue debts tend to increase too rapidly, the Dong Hung Trade and Service Company has set up a new division in charge of demanding for debt payment, which is put under the control of the company’s general director herself.
Nguyen Thi Anh Hoa, General Director of the company, said that she always has to think carefully before accepting late payment. However, when trying to take back debts, the company needs to act flexibly so that it would not lose loyal clients.
Businesses struggling to take back debts
Phan Van Thien, Deputy General Director of Bibica, a sweets manufacturer, said that sellers have to accept late payment, or they would not be able to sell goods. However, enterprises have to apply necessary measures in order to minimize the late payment.
Speeding up production is one of the measures that many enterprises are applying, because this helps speed up the capital turnover. “At Bidrico, for example, the capital turnover time needed has reduced to 15 days from 45 days of two years ago,” said Nguyen Dang Hien, Chair of Bidrico.
Besides, Hien said, the company also offers preferential prices to the distributors who make payment soon. Especially, the clients, who pay cash right on deliveries, can get the bonuses of up to five percent.
According to Saigon tiep thi, offering higher discounts is the most popular method now being applied by manufacturers. The popular discount rates now are 1-1.5 percent per month.
vietnamnet, SGTT
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