Thursday, December 4, 2014

Make In India

Does it make any sense??

Make in India with long credit, late payments or almost no receipts.

Hello friends, I am Sumit Goel, one of small business owner from Delhi (under the trade name of M/s Shanti packaging industries) and acute sufferer of late payments.

I am not writing this to discourage the project of our board PM.

  • Ø  According to the survey 73% of small firms (SMEs)they are experiencing late payments, which leads SMEs to get low cash flow.

Although this problem is not new to SMEs & MSMEs, SMEs suffer more because of work not paid on time and not because of low profits. This also leads a new problem of time; small businesses are spending a large number of Hours on debt collections.

I being the suffer of late payment scenario, spends three or more hours daily chasing up for payments. For us Skill gaps are also a problem, where staff who case payments are usually the employee, who normally also involved in the other works, or business owner who is responsible for almost every work in that business. Problem get more acute when supplier (SME) is dealing with big companies, Cash flow labor, wages, infrastructure, daily necessities, bills all are headache for sme’s chasing late payments.

BIG client of sme’s often know that their supplier is almost depend on him (Kahan Jayega) and SME’s often lack the expertise to know what to say, or what to write (email) to that late payment giant. We are mostly focus on felling rather than ground facts.

While surfing internet I found we have some laws but experienced and experts says that they are not enough. At present there are two acts
  • ü  The delayed payment act , 1998
  • ü  The MSME act , 2006

That seeks some hope in the settlement of payments of bills

On my past experiences and discussing this matter with lot of experts and friends. “We have to introduce a credit policy and now most of our outstanding invoices are to be paid within 30 days, or we put them to stop credit, if it doesn’t work we don’t give them credit and make pay to get material” This is the only way.

Being an typical Indian I will not focus on various option like:-
  • 1.       Bank involvement (l/c)
  • 2.       When pay electricity bill on time than why not ours
  • 3.       Credit type payment system.

Reader’s suggestions are most welcome
Sumit Goel
Shanti Packaging Industries


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