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CvSU MANUAL OF OPERATIONS
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b. Receivable and Inventory Control System

As a strategic tool, the IGP Managers should be able to
understand and utilize credit and collection as well as inventory
management policies. These two concepts go hand in hand with
procurement policies to achieve a unified system that controls cost,
assures quality and delivery requirements, and achieve sales targets.
1. Credit and Collection Policies
• IGP credit and collection policies may invoke the
following:
• Quality of accounts accepted or the credit standard
• Credit period
• Cash discount or rebates
• Special terms such as seasonal dating
Depending on the scale of production and the target market, the
Business Council may set a policy that only the faculty and staff of
the college will be allowed to purchase on credit giving emphasis on
the relative ease and security of collection (automatic salary
deduction). Sales to outside clients are made only on a cash basis.
This policy sets the credit standard.

The credit terms will depend on the policies set by the Business
Council in consultation with the Project Managers.

Cash discount or rebates may also be given as when there is an
excess production or when sales are unexpectedly low and is expected
to continue in the near future. In extreme cases, the IGP may
accept seasonal or dated payments through check or other suitable
negotiable instrument.

In situations where the IGP sells merchandise or services on
account, especially to consumers other than the University faculty
and staff, bad debts may have to be recognized and reflected in the
financial statements.

The IGP Manager, in consultation with the Business Council
and the accountant shall decide the manner and procedure in the
aging of accounts payable and writing off of accounts receivable as
bad debts expense. Bad debts expense shall only be applicable to
receivables from outside clients. No bad debts expense shall be
recognized for receivables from University faculty and staff as
collection thereof is within the control of the E&BA Council, Project
Manager and the facilitative staff.

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