PROPER MANAGEMENT OF ACCOUNT RECEIVABLES:

CASE OF BALTHIER ADVERTISING AGENCY CORPORATION

In Partial Fulfillment of the Requirements for the Degree of

Master in Business Administration

Leader:

Creiven Arthiel T. Gimpaya

Asst. Leader:

Peter B. Villanueva

Documentor:

Siegfrid Snidely P. Abuel

Members:

Rocel H. Abustan

Doris T. Alcala

Shy Lyn S. Cahilig

Christine P. Dumapit

Kristiel Anne J. Estiller

Presaleen F. Matin

Jerine S. Pasion

Maria Cielo B. Paulino

Anele N. Santos

Perlita C. Urbina

Nicolas Vergara, Jr.

Jeluzel C. Viagedor

September 16, 2017

1
 CHAPTER I

"Do you believe in angels?"

I remember it clearly, it was my first day of work in my first job. I was early that morning,
wearing a white blouse under my brand new blazers and skirt I threaded the hallways filled with
confidence. This is it, I'm no longer a student, I'm in the real world now and today is day one of my
path to success, I will succeed!

"Ping!"

The elevator doors opened and I entered. Upon entering, I noticed someone else inside. It was
a fairly tall guy with bronze perm hair and fair skin. He wore shirt and jeans filled with creases and he
was wearing worn-out slip-on sneakers, his left arm was also fully bandaged. In a company such as
this, someone wearing these clothes must either be a maintenance crew or probably a messenger. I
glanced again at him and there I saw his eyes. He had deep brown eyes but something was off, it was
as if he was staring at a far off distance, to put it simply, his eyes were void of life. The elevator opened
doors, it was my floor so I got out and went on to my assigned desk. On my table was a plate, it read
"Demia A. Balthier - Business Development Manager", I smiled and told myself "This is it Demia, do
your best!" I've been studying overseas as per my grandfather's wishes, all for this moment where I
finally step into Balthier Advertising Agency, my family's company.

It was my first month in the job and I messed up. In two days I am to release fliers for a new
product at a convention but the supplier made stickers instead. It was my fault to begin with, not
properly aligning and informing them of what exactly they were to do. I'm starting to panic, if the
directors find out of this I'd be sacked and if I tell the client, surely they would be angry. I was in deep
trouble. The messenger who brought me the boxes of stickers stood up.

"Ma'am Demia, maybe you should go to Sir Ein, the Senior Art Director and ask him for help" he said.
"He's up at the fifth floor, am sure he can help you with this."

I hurriedly left my table and hurriedly went to the elevator to go to the 5th floor. Upon arriving,
I saw him again, that guy with bronze perm hair. He was by the window at the end of the hall, staring
outside. He was wearing a rather old shirt and faded jeans which are filled with creases, seems like he
does not know how to iron his clothes but heck, am not here to criticize someone. I approached him.

"Excuse me, it's my first time here and was hoping you can tell me where I could find Sir Ein."

"Why? What do you need from him?" he replied in a low voice. I could clearly sense his
disinterest in the tone of his voice.

"I messed up with something and a helper told me I should come to Sir Ein for help" I told him.

"I'm Ein" he replied "tell me what your problem is"

I was shocked. This person is Ein? He's the art director? I didn't expect this coming. I envisioned
someone wearing an expensive suit and is properly trimmed but here in front of me, he doesn't even
look like he trims his facial hair with that goatee and his perm hair looks messy and all but no matter,
if he can help me that doesn't really matter.

2
 So I told him how I messed up.

"I see, that's no big deal" he told me in a calm voice "there's no need for your directors to
know of this, surely you have some buffer on your CE (Cost Estimate), I can make a call to one of my
suppliers to produce your fliers on such short notice but you're going to have to shoulder the costs
but I don't think it'll cost much after all, stickers are far more expensive than glossy paper."

"Really!?" I exclaimed. "Yes! Please I need it in two days for the Housing Necessities
Convention!"

"What time will you do ingress? I can have it brought to the venue for ingress. Here"

He handed me a piece of paper, "That's my number. Give me the details of the venue and the
time and if anything else related to the Creatives department comes up, don't hesitate."

After that, he just casually left the conversation and walked through the hallways until
reaching the door of their office. I'm saved.

That day, I couldn't help but think of him. He's such an odd person, something about him is
just off especially his eyes. His eyes look like he's angry and yet, lifeless and the way he speaks, there's
not a hint of emotion. Maybe that's how professionals are, leaving their emotions at home and just
focusing on their job.

Days and months passed by. I find myself going to the Creatives Department, more specifically
to Ein for all my art collateral needs. Resizing of key visuals, cleaning up the art work for packaging,
and requesting all sorts of art for advertising purposes. I was often in a rush and he would always help
me out. There are even times that he would opt to stay late at work just to help me out with my
projects. Ein would often give me advice on how to handle clients. It was a real pleasure working with
him but I still couldn't shake the feeling that there's just something off about him. I never once saw
him smile or rather I never saw any emotion from him, Ein was just nonchalant about everything. Even
when he's bombarded with workload from other project managers, he'd just stay calm and not once
did I see him flinch nor get frustrated especially when am being persistent. I'm amazed with how he
maintains his composure. I admire that part of him.

It was a long weekend, a holiday. I woke up that morning with my phone ringing. The client
called and told me they have sent me an email containing the ASC number of the ads that are soon to
be released and they also gave me revisions for the demo kit. I was horrified when they told me that
they wanted me to present it in our meeting which is tomorrow, it was a big project and everything
was a rush. I didn't know what to do, I tried calling other artists first but none of them answered, one
even sent me an sms that he was on vacation. Again, my last resort was Ein, it was always him. I called
him.

"Yes? What do you need?" He answered.

"Ein, I'm really sorry to bother you but I need your help" I said while gasping for air "Can we
meet at the office? It's pretty urgent, please?"

"Okay, I'll be leaving now. Meet me up the fifth floor" he said with his usual nonchalant voice.

3
 We met up that morning at the office. Did all the revisions that needed to be done. It was
almost 9 pm when we finished. We went out the office together and it was raining and sadly, I forgot
my umbrella. I looked at Ein as he opened an umbrella.

"I can lend you an umbrella" he offered.

"Thank you, just walk me to the bus stop right at that corner and I'll be fine" I told him.

"Fine"

As we walked I noticed that a larger portion of the umbrella was over me. I glanced at his
shoulder and it was getting wet. I didn't know what to say, I didn't expect that he was a gentleman
since he seemed like an unrefined person from the outside.

"Where do you live anyway?" He asked.

"Not too far, near the Archadia Public Market" I replied.

"I always pass through there" he looked at me with his usual bland, lifeless eyes "I can give
you a ride. It's already late and it's raining. It'll be more convenient for you"

Maybe Ein owns a motorcycle but does he have an extra helmet? And I'll definitely get soaked
in the rain. I should decline.

"Maybe next time, I'll be fine" I said while smiling at him.

"No" he said firmly, "I insist"

He grabbed me by my hand and led me to the basement parking lot. While he was pulling me,
I couldn't explain what am feeling. Looking at how he's holding my hand firmly yet gently, it made my
heart race. Perhaps it's not a bad idea to hitch a ride and it's safer if I'm with Ein as it is after all, too
late in the evening. I followed him until he let go of my hand in front of a silver car, it was a chevy. I
was astonished, I belittled him and felt embarrassed for it. But how? Is the pay that good for someone
to be able to afford a not so common car? He opened the door for me and gestured for me to enter, I
did.

While Ein was driving, I can't help but steal glances of his face. His bronze, messy perm hair,
those thick eyebrows, that unkept goatee. I could feel my heart racing I couldn't explain it.

"So uh..." I attempted to break the silence by starting a conversation "why do you always look
unhappy?"

"Is there a reason for me to be happy?" he replied.

"There must be something that can make you happy right? Like a promotion or receiving
praise for a job well done or maybe when you're with your friends? right?" I said with a rather
concerned tone.

"What is happiness? Tis but a fleeting emotion" he replied with a serious tone "When you
receive a gift naturally you'd be happy for a moment then what? It's gone. When you bought a new
celphone, you're filled with happiness but only for a moment, for some time then what? back to
normal."
4
 "But aren't you happy like you have a job while others don't?" I argued. "Aren't you happy to
have a family? friends?"

"Thankful, yes. Happy, No." he said while looking at me with those lifeless brown eyes "I am
but a corporate zombie. There's nothing in life but work."

"That's not true! There is so much in life than work" I argued firmly "You can do something
different once in a while like go out with your family or hang out with your friends, right?"

At that moment he pulled the car over and stopped. He looked at me and raised his left hand
still covered in bandages. He gently unwrapped it and what I saw next shocked me. His left arm was
filled with wounds. It was as if his whole arm was gnawed over by a large dog and what puzzled me
was that the wounds were fresh which makes no sense. He had it bandaged for months, it should've
healed by now.

"The wounds that never heal" he said while staring straight into my eyes "This is a secret I'll
share only with you, different parts of my body suffer these wounds.

I was coveted in silence, I didn't know what to say and how to react.

"This is but a glimpse of the price I have to pay for my sins long ago" he whispered with a sad
expression. "Family... Friends... I have already forgotten what they are"

"Don't bother with someone else's issues, deal with your own problems and issues instead of
prying on others' " Ein said while letting out a sigh "Don't be a corporate zombie like I am, the things
you said earlier, apply those to your self."

After saying those words, he proceeded to cover his left arm with bandages again. The car was
filled with silence as he drove me home.

That evening I couldn't stop thinking about Ein. He's such a mystery and my mind is filled with
questions about him. Just who is he and those wounds, is it possible for wounds to not heal? Is it like
a rare medical condition. I don't understand but I want to know more about him, I want to know more
about his past, his pain, everything.

The next day, the meeting was a success, the company won the bidding against other
advertising agencies. The clients praised the presentation me and Ein worked together for. The CE was
approved and with that budget, we can finally push on with the project. My director praised me as
well and congratulated me for a job well done. He told me that with this big project now ours, once it
becomes a great success I'll be prompted to get a promotion, from Business Development Manager
to Director! I was so happy I couldn't wait to tell Ein. I rushed back to the office and I was just in time,
I caught Ein as he was packing up to leave. I told him of the good news.

I embraced him as he congratulated me then I looked at his face and much to my surprise, Ein was...
he was smiling. It was the first time ever that I saw him smile, I was mesmerized by that moment that
I reached out to him and kissed him. In that moment, I lost consciousness.

The school was burning and there inside was a young girl trapped. She was choking with the
fumes emitted by the fire. She could hear the people yelling outside as the building crumbled. She fell
down which shortly after the ceiling collapsed. It was over. Surely she's dead but no, a man out of

5
nowhere sheltered her against the debris. The man reached down to her and carried her to safety,
breaking the window with his arm, taking her out and gently placing her down the grass at the school's
yard then left. She could vaguely see him as he walked away.

A girl was woken up with the sound of glass breaking. There was a burglar that got inside their
house but this little girl didn't know any better. She went to her box of toys and pulled out a miniature
sized baseball bat and went down stairs but before she could reach the bottom, not one but two big
guys were on their way upstairs. Filled with both fear and courage, she raised her baseball bat in the
air. The burglars looked at her in horror as unknown to the little girl, there was something behind her.
A silhouette of something huge with raging eyes burning like the sun and amidst the darkness, its bare
fangs were visible. The charlatans were struck with terror and hurriedly ran out of the house. The girl
turned around to see a man behind her. She asked who the man was and he told him that he's a friend
and that she should go back to sleep.

A group of college friends were out hiking in the mountains. It was already evening and
everyone was comfortably sleeping in their tents. One of the hikers, a girl, woke up in the middle of
the night as she needed to go. She went outside and looked for a place to do her business. Upon
packing up, she was startled when she heard leaves rustle behind her. She was even more startled
when something jumped out of the bushes but sighed in relief as it was just a raccoon. Upon regaining
composure, she began to walk back to the camp but as she walked she could hear rustling sounds as
if something was following her. She stopped for a brief moment to look back and there she saw that
she was actually being followed by a huge bear. She wanted to scream for help but to no avail, she
was petrified and no sound would come out of her lips. The girl ran and the bear chased after her, she
ran as fast as she could but it was in vain as she tripped and rolled down the grass hitting the trunk of
a tree. The bear caught up to her. It stood and prepared to maul her but the instant the bear charged
towards her, something fell down from the trees and tackled the bear. She vaguely saw what it was
as the moon's glow shone a dim light over the creature. It was clearly bigger than the bear and it was
of humanoid form but with fur on its back, arms, and legs. Its eyes had an orange glow. The girl, unable
to take the shock in, lost consciousness only to wake up safely tucked in her sack at the camp.

The sound of thunder. It was raining and in the cemetery, a teenage woman with short black
hair and pale skin was in front of a grave, silently grieving. Tears continuously flowed out of her brown,
almond shaped eyes creating a path through her cheeks passing through her pale pink lips. The
teenage woman fell down on her knees as she continued to weep. She lost her father in a freak car
accident. Her mother survived and is confined in the hospital but her father wasn't as fortunate. As
she wept, a man walked beside her and covered her with his jacket and she heard him whisper.

"I'm sorry..." The man said in a low tone "I failed to save everyone."

The woman didn't bother to look at the man. She was deep in her lament, unable to fully
comprehend what was happening around her. As everything was filled with darkness, it can be seen
what was written in the tombstone.

MARTIN G. BALTHIER

I regained consciousness and is baffled to find myself on the rooftop of the company building.
I asked myself what am doing here. I looked around then there, I saw Ein. Standing by the ledge.

6
 My eyes widened as I looked at him. I stood up in awe and approached him slowly. He was
staring up in the night sky.

"It was you" I said with a shaking voice. "I remember everything... it was... you"

Ein looked at me but he was different this time. His eyes looked so at peace and gentle. He
was also faintly smiling.

"You've been watching over us but just who or what exactly are you? and why?" I asked him.

He smiled at me and he uttered the words.

"Redemption is a long, harsh path for he who hath fallen from thine grace"

After saying those words, Ein allowed himself to fall off the building. Much to my surprise, I
ran as fast as I could for him, reaching out to him but I was too late. He already fell. I looked down the
building but there was nothing. I stared down there as silence filled the air. Tears began to fill my eyes
as I uttered his name, Ein. As I looked down to my feet, there was a feather. But it wasn't white, it was
reddish bronze.

The next day, I asked the Creatives Department regarding Ein but everyone stated they don't
know him. The Art Director was an old man. I looked for the helper that told me about Ein and despite
forcing him to tell me about Ein, he was clueless. He doesn't remember telling me about anyone
named Ein. I even went to the HR office to inquire about him but to no avail, there were no records or
anything about him. I even went to the length of taking out all his artwork and asking them who did
it, all the artists told me it either must have come from a different agency passed unto ours or a client
sent it. It's like he never existed at all but no, am not done yet. This story of mine has numerous plot
holes and questions left unanswered, I will fill these holes and I will find the answers to those
questions, I will find Ein.

I went to the rooftop that evening and shouted at the top of my lungs.

"EIN! WHERE EVER YOU ARE I KNOW YOU CAN HEAR ME! YOU CAN'T HIDE FROM ME!
SOMEDAY I'LL FIND YOU!"

You're so selfish. Hiding away from me but I'll find you, just you wait. Someday, surely, I will
find you.

Three months have passed and as per the contract, Practor and Gumble is supposed to pay for the
project fees but during the collection process, P&G failed to pay the company and another three
months have passed but to no avail, no payment has been made and the account has been forwarded
to a third party, a collection agency but it turns out to be bad debt. Am now worried, I have just been
promoted but the bigger problem is that if P&G really doesn't pay us, the company is at risk of
insolvency or worst, going into bankruptcy, not only will I lose my position but the company itself! My
grandfather would be very disappointed. I have to figure out something soon before this issue
escalates further.

7
That evening, as I lie down on bed and stare off to the ceiling, I pondered. If Ein was here and this
problem arose, what would he do? What would his advice to me be? What would dad do if he was
here? If he was the CEO? But no, whether he is here or not, I can't depend on them or anyone for that
matter, all the time. For what have I studied for all this time if am only going to depend on others? I
can do this on my own, I can think of a solution. I have to think of a solution!

__________________________________________________________________________________

EPILOGUE

As Demia left the building, hidden from plain sight coveted in shadows, a man was sitting at
the edge of the building's roof. Watching over her, as she walked further away, the man spread wings
similar to that of a predatory bird like an eagle or a hawk and it was painted in crimson red and flew
away.

CHAPTER II

PROLOGUE

It was twilight, a cold chill filled the air as a deafening silence engulfed everything. Heavy
clouds filled the sky above me, covering the sun and then everything went black and white. I could
feel the distant glares of my fellow watchers and deep inside me, I felt a surge of different emotions.
Fear, despair, grief, anguish, terror, and sorrow. I stood still on top of my once proud pedestal that
has began to deteriorate and crumble. My pillar shook and fell apart and with it, I fell... I fell from
grace. After what felt like an endless fall into the darkness, I saw light from below me. There were lots
of light as I got closer, it was there that I knew I have fallen into the mortal realm.

_________________________________________________________________________________

It's almost midnight, I was in the subway waiting for the last train to arrive. One may ask, why
am I riding the train if I am capable of travelling over short distances in an instant. The answer is, I am
in the mortal realm and in order to understand them, I have to integrate myself into their society.
Moments later, the train arrived and before I could take a step inside, I felt an unsettling presence.
My sight darted around me, inside the train was a homeless man, an elderly woman with a cane and
a couple and none of them were the source of this heavy aura. I refrained from riding the train and as
it moved forward to leave I saw him on the other side of the tracks. An old man in a formal attire,
wearing a bowler and using a cane. He grinned at me and in that instant, I knew who it was. Samyaza,
father of all nephalems.

"Am glad that you noticed me" Samyaza said at me in a rather jolly tone.

"Knowing who I am, how bold of you to stand before me" I said firmly.

"Surely you won't resort to violence, at least not here, not now" he said with his unchanging
jolly tone then tapped his cane unto the ground. "It's been a few centuries and it seems that you're
still into it, searching for your former victims and helping them get through their short mortal lives.
Haven't you had enough? You should have realized by now that no matter what you do, you can never
be forgiven. Your crimes against humanity can never be redeemed, not now, not ever."

8
 I shrugged at what Samyaza said and turned my back. I refuse to have a conversation with a
foul, despicable being such as him.

"You found her, the reincarnation of the queen, haven't you?" he asked.

My eyes widened and turned back at him, seeing him give off a wide grin pissed me. I clenched
my fists and focused on my senses. I prepared myself and he should definitely do so as well.

"Now, now. Am not here for a fight. I was sent here by him to extend to you an invitation. The
day of reckoning draws closer and you, where exactly do you stand, fallen one."

"That is none of your concern and I refuse to join your wretched ranks filled with malice and
evil. If anything, I should bring desolation upon you all. Now begone before I lose control of my self."

"You're no longer an angel Ein, at least not His. You have fallen. You did everything He
commanded you and look what it did to you, look what happened to you? You slowly became
corrupted and in the end, you fell and what did He do about that? Nothing! But we're here, we're
offering you a chance to get back at Him! at them!"

At that instant, I moved in front of him at a flash but before I could get my hands on Samyaza,
he was behind me and has laid his hand on my shoulder. Everything was frozen into a standstill as if
time had stopped.

"You called us malicious and evil but aren't you the one who is? When we descended to the
mortal realm, we gave humans what they needed to advance and to progress. Chazaqiel gave humans
meteorology, Phenex gave them science, Azazel taugh them how to make weapons for themselves, to
name a few. We worked along with the Ars Goetia to futher support mankind. We gave them all the
knowledge that they deserved to become as close to Him as possible, we gave them power! You
however, were different. You gave them chaos, destruction, and death. You're a mass murderer and
your quick temper is proof of that." Samyaza told me in a dark, deep, distorted voice.

"You gave them power to destroy one another, your kind tricked them into committing sins"

Samyaza scoffed, "Tricked them? Haven't you done the same? I remember you tricking Señor
Cortez as you acted as the navigator of their expedition to find El Dorado, the land of gold. You brought
them there, killed Tlaloc whom they worshipped as a god, brought war unto them and finally
destroyed their civilization and on their voyage home, you brought a ravaging storm upon their ships
and buried all proof of the once rich empire unto the deepest parts of the sea.

Oh have you also forgotten how you manipulated the Romans into waging war unto Egypt and
while chaos ensued, you snuck up at both Horus and Osiris and murdered them and brought carnage
to the other gods. All other demons was astounded by your feat and power when you did that but it
was even more astounding when you entered the political world of Greece only to destroy it from
within and afterwards, killing their gods and destroying another great civilization. You were the true
angel of death. You began with destroying the great city of Sodom upon His command then proceeded
unto other civilizations. The Aztecs, the Incans, The Mayans, The Mesopotamians, to name a few! But
most notably, your most notorious act against humanity was with Atlantis!

9
 Pretending to be the queen's royal subject and working your way up to Samael but that was
when you failed, you almost killed Samael, you managed to blind him though but despite your great
power, you were not a match for the almighty Lucifer and Asmodeus though I must say, you fought
hard considering there were two of them against you and in that epic battle you managed to sink
Atlantis to oblivion. You killed your beloved, you killed your darling Queen Annette. You possess the
power to alter reality and erased yourself from history but WE know all, WE have witnessed
everything. Now tell me again who is the true evil?"

Samyaza released me from his lock and I fell on my knees. I was lost for words, I didn't know
what to say. All the memories of the destruction and chaos I have brought and witnessed. Visions
flooded my mind. My blood stained hands, the faces of the children that died, the screams of all my
victims, the cries of the oppressed, the terror that filled all those in despair as impending doom
approached them, Annette's face as she cried and yelled my name under all the chaos, her glimmering
blue eyes, her blonde silk like hair, her rose colored lips... and then... her lifeless, bloody body
consumed by the unmerciful waves of the sea. All these memories, these visions, consumed me. I
screamed from within my soul, screamed in agony, pain, and grief.

"Atlantis was highly advanced even on today's standards and you just went and eradicated
them, erasing them from the face of the planet. You say you killed false gods and demons, how about
also telling us you killed both the innocent and the guilty alike. Quit acting like you're a guardian angel
of sorts, you are not." with a heavy sigh, Samyaza walked away and faded leaving a message.

"I'll come back for you and I look forward for your favorable answer, Angel of Death."

What kind of Angel was I? What kind of angel am I now? The first commandment, Thou shall
not worship any other god than I. I was tasked to bring down judgment upon the sinners. It was a
heavy obligation, it was what you would call, a dirty job but someone has to do it. Being gifted with
destructive power, I accepted His will and did what I must, at least what I believed I should but I was
weak... I let corruption over take me, I let guilt fill my mind and consume my soul. Makes me wonder
how Dilandeu was able to overcome this when he descended upon Egypt and brought the plagues.
My will and faith wavered and is not as solid as his. This is what I am now, a fallen angel, with never
healing wounds. One thing for certain, I will redeem myself and in this upcoming war, I stand behind
neither heaven nor hell, I choose to stand for mankind. This is the least I can do, this is the only thing
I can do.

10
Story Timeline:

2007 – Balthier Advertising Agency Corporation was founded

2010 – P&G became major client

January 2, 2016 – Demia was entered in the company as Business Development Manager

August 1, 2016 – Demia was promoted as Account Director

February 1, 2016 – Starting of the latest transaction with P&G amounting 50 million pesos payable in
90 days

90days – Past due at the hand of the Balthier Corporation

30 days - Transaction period with the 3rd party (ABC Collecting Company)

90 days – Agreed collecting period given to ABC Company. However, ABC cannot collect and
declared the accounts receivable as bad debt

December 15, 2016 - Meeting with P & G Officials

Mission for Our Partners

“To be the preferred marketing partner of clients by conceptualizing, implementing and promoting
the most innovative and efficient business ideas.”

Vision for Our Partners

“To be the leader in providing 360 degree marketing services by maximizing the use of the widest
array of communication channels.”

Mission for Our Employees

“To establish an environment that fosters professional growth for each individual so that, in turn,
they can value and further contribute to the expansion of the company.”

Vision for Our Employees

“To achieve the highest level of intellectual excellence within a diverse, collaborative culture whose
members have a passion for commitment and quality performance.”

11
Total Account Receivables

Company Percentage Amount

P&G 50% 50M

New client 20% 20M

Others 30% 30M

Total 100M

SAPADAPPA Analysis

Situational Analysis

Problem Analysis

Decision Analysis

Potential Problem Analysis

Situational Analysis

Strength

 Known advertising agency

 10 years in industry
 Suppliers of advertisement to prestigious companies

Weakness

 Horizontal Organizational Structure

 Poor internal control
 Incompetent employees

Opportunities

 Business expansion
 Services’ diversification

Threats

 Increase of competitors
 Inflation rates
 Late deliveries of materials
 Changing customer’s demand
12
Problem Analysis

Proper management of Account Receivables.

- How to collect uncollectible accounts?

Decision Analysis

Option 1: Assignment of receivables to the bank

Advantage

- Immediate return of cash

Disadvantage

- Account not fully realized

Option 2: Look for investors

Advantage

- Long term solution

Disadvantage

- High expectation of return

- Focus on their personal investment

Potential Problem Analysis

 Connivance between employees

 Losing potential clients

Plan of actions

 Look for a trusted Banks

 Selection of the best offer
 Implementation of agreement

Recommendation

 Replacement and transfer of Account Receivable personnel

 Assign personnel for proper monitoring and control
 Conduct regular trainings and seminars
 Design monitoring control system

13
 BALTHIER ADVERTISING AGENCY CORPORATION
MINUTES OF THE BOARD DIRECTOR IN ITS MEETING HELD AT BALTHIER CONFERENCE ROOM
January 9, 2017, 3:00 p.m.

Attendance: All members of the board are present.

Agenda:
1. Age of uncollected receivable to be declared bad debt.
2. Meeting with P &G officials.
3. Engagement in Receivable Financing.
4. Investigation of receivable officer.
5. Orientation of employees.
6. Replacement and transfer of account receivable officer.

Matters arising:

1. Age of uncollected receivable to be declared Bad Debt.

Receivable aging more than one (1) year old shall be declared Bad Debt.
Board Action: Approved

2. Report on Meeting with P & G officials.

Balthier agreed the non-renewal of contract of collection with P & G due to the no
collection of accounts receivable.
Board Action: Approved

3. Engagement in Receivable Financing.

Negotiate with a reputable bank for assignment of P & G receivable (choose the best
offer).
Board Action: Approved

4. Investigation of receivable officer.

Conduct investigation against the account receivable officer in relation to neglect of
duty.
Board Action: Approved

5. Orientation of employees.
Conduct proper orientation of employees in relation to their duties and functions.
Board Action: Approved

6. Replacement and transfer of account receivable officer.

The account receivable officer will be replaced from former assignment and will be
transferred to other department.
Board Action: Approved

The Board adjourned at 5:00 p.m.

14
 CONTRACT OF ASSIGNMENT OF ACCOUNTS RECEIVABLE

THIS CONTRACT OF ASSIGNMENT OF RECEIVABLES made and entered by and between:

BALTHIER ADVERTISING AGENCY CORPORATION, a company incorporated in the Republic of the

Philippines and having its registered office at 12th Floor, Ayala Bldg., Makati, Philippines (including
its successors, the “Assignor”);

And

UNITED BANK, a company incorporated in the Republic of the Philippines and having its registered
office at 8th floor, Robinsons Tower, Makati, Philippines (including its successors and assigns, the
“Bank”).

NOW THIS ASSIGNMENT WITNESSETH AND IT IS HEREBY AGREED AS FOLLOWS:

1. DEFINITIONS AND INTERPRETATIONS

1.1 In this Assignment, unless the context otherwise requires, the following expressions shall
have the following meaning:

Business Day - Means a day (other than a Saturday or a Sunday) on which banks are open for
general business in Philippines;

Contract Proceeds -Means all moneys of whatsoever kind which may at any time become
payable to or for the account of the Assignor in connection with or
arising out of the Receivables;

Contract Party - Practor and Gumble (P &G), the debtor;

Receivables - The total collectibles from P&G accounts amounting to Fifty Million Pesos
(Php 50,000,000.00) entered in the books of Balthier Advertising Agency
Corporation.

1.2 Construction:

Except to the extent that the context requires otherwise, any reference in this Assignment to:-

(a) an “agreement” includes a concession, contract, deed, franchise, license or

undertaking (in each case, whether oral or in writing);

(b) “consent” also includes an approval, authorization, resolution, notarization, order,

permission;

(c) “indebtedness” includes present obligation for the payment or repayment of money;

15
 (d) an “obligation” of any person under this Assignment or any other agreement or
document shall be construed as an obligation expressed to be assumed by or imposed
on it under this Assignment;

(e) the “parties” shall mean the parties to this Assignment; and

(f) a “person” includes any individual, company, corporation, firm, partnership, joint
venture, association (incorporated or otherwise), organization, other entity having
legal personality;

2. PAYMENT AGREEMENT

(a) The assignor shall notify the P&G regarding this contract of assignment of accounts
receivable;

(b) Collection of accounts receivable including interest is under the responsibility of the
bank. Proceeds from collection will be applied as payment to the loan; and

(c) The parties shall perform, observe and be bound by the terms and conditions set out
in this agreement and to comply all the terms of the contracts.

3. ASSIGNMENT

For the consideration aforesaid, the Assignor as beneficial owner:

Assignment

HEREBY ASSIGNS and agrees to assign to the Bank the accounts receivable of P & G
amounting Php 50,000,000.00 in a consideration of Php 30,000,000.00, less service
charge of Php 10,000.00 under notification arrangement. The Assignor signed a
promissory note payable in six (6) months starting on February 28, 2017 with an
interest of 1% per month on the unpaid loan:

(i) the Contracts, including all Contract Proceeds and all interests or rights which
may accrue in respect thereof;

(ii) the proceeds of any payments or other moneys in connection with the
Contracts,

4. REPRESENTATIONS AND WARRANTIES

1.1 The Assignor hereby represents and warrants to and for the benefit of the Bank as follows:-

(a) the Assignor is a corporation duly incorporated and validly existing under the laws of
Philippines, and has the power and authority to own its assets and to conduct
advertising business;

(b) the Assignor has the power to enter into and perform and comply with its obligations
under this Assignment;

(c) the Assignor is the sole legal and beneficial owner of the Assigned Receivable;
16
 (d) other than this Assignment, there is no Security Interest in respect of any of the
Assignor’s rights, benefits, title and interest in the Assigned receivable or any part
thereof;

(e) all particulars, information and documents furnished to or to be furnished to the Bank
from time to time in connection with the contracts are to the best of the knowledge,
information or belief of the Assignor, correct and accurate;

(f) all actions, conditions and things required to be taken, fulfilled and done (including
the obtaining of any necessary consents) in order:

(i) to enable the Assignor to lawfully enter into, exercise its rights (if any) and
perform and comply with its obligations under this Assignment; and

(ii) to make this Assignment admissible in evidence in the courts of Philippines;

and

(g) no litigation, arbitration, regulatory or administrative proceeding is current or

pending or, so far to the best of the knowledge, information or belief of the Assignor,
threatened to restrain the entry to exercise the contract of assignment.

2.2 Each of the above representations and warranties set out in this Clause is deemed to be made
by the Assignor by reference to the facts and circumstances then existing on the date of this
Assignment.

5. COVENANTS

5.1 The Assignor and the Bank:

(a) the Assignor shall perform and comply with all its obligations on its part under the
Contracts, and take all necessary or advisable steps to remedy any breach and to secure
the due performance by the Contracting Parties;

(b) the Assignor shall forthwith upon the execution of this Assignment in relation to the
Contract that is now in effect and shall:

(i) deliver to the P & G a duly executed notice of Assignment hereto and procure
the signature of P & G authorized representative; and

(ii) deliver to the Bank the acknowledged notice together with all documents and
information relating to the Contracts;

(c) the Bank will immediately notify the Assignor in writing after becoming aware: and

(i) of any default or breach by the Contract Party of their obligations under any
Contract and of any arbitration, litigation or other proceedings commenced or
threatened, in respect thereof;

(ii) of any information concerning the credit worthiness of the Contract Party;

17
 (d) the Bank shall not threaten, purport or agree to, assign, charge, pledge, transfer or
otherwise dispose or create or encumber or have outstanding, any Security Interest
over any of its rights, benefits, title and interest in the Assigned receivable and any
attempt to do so shall be void.

6. COST AND EXPENSES

The Assignor shall pay:

all expenses including stamp duty, legal, administrative, registration, execution fees and any
other costs or charges (including abortive costs) incurred or expended by the Bank in connection with
this Assignment and the registration and perfection of this Assignment and any other document
required by the Bank in relation to the banking facilities;

IN WITNESS WHEREOF, both parties have hereunto set their hands this 30th day of January 2017 at
Quezon City, Philippines.

BALTHIER ADVERTISING AGENCY CORPORATION UNITED BANK

By: By:

Signed: DEMIA BALTHIER Signed: VERONICA LOPEZ

SIGNED IN THE PRESENCE OF:

Signed: ARNEL PANGILINAN Signed: JOHN ARANETA

18
 NOTICE OF ASSIGNMENT OF RECEIVABLES (“NOTICE”)
AND ACKNOWLEDGEMENT OF NOTICE

Date: January 31, 2017

FOR: PRACTOR AND GUMBLE Via Registered Mail

East Ave., Q.C.

1. We hereby give you notice that by an Assignment of Receivables made between ourselves and
United Bank (“Bank”), we have assigned absolutely to the Bank all our rights, titles, interests
and benefits to all moneys payable by you to us under the Contract.

2. We hereby irrevocably authorize and instruct you to:

(a) pay directly to the Bank all moneys due (plus interest as determine by the Bank) under
the Contract into the above mentioned Bank within 6 months; and

(b) disclose to the Bank without any reference to or further authority from us such
information relating to the Contract as the Bank may request at any time and from
time to time;

3. This authority and instruction is irrevocable and shall not be cancelled or varied without the
prior written consent of the Bank.

4. Please acknowledge receipt of this Notice and confirm that:-

(a) you accept the authorizations and instructions contained in this Notice;
(b) you will pay to the United Bank all moneys payable under the Contract in accordance
with this Notice; and
(c) you have not received any notice of any other assignment of the Contract,
by signing and returning the duplicate of this Notice.

Conformee:

Signed : MARLOU SOBEL

P & G President
19
Balthier Advertising Agency Corporation Credit Policy

Objective:

To ensure that all payments collected by collection personnel from customers are remitted to the
company within the prescribed payment terms, standard discounts/payment schemes are followed,
past due or uncollected accounts are avoided through monitoring and updating of customers daily
account balances.

General Policies:

1. Company will bill client monthly unless otherwise provided on the advertising purchase
contract.

2. Invoices shall contain client name/product, date, time, ad specifications and cost.

3. Payment arrangement is 50% down payment after Cost Estimate is approved and another
50% full payment after project is done unless credit has been established. Once credit is established,
payment by client is due within 30 days after acceptance of invoice and delivery receipt.

4. For prompt payments, company will provide 2% discount on the total project cost. If
payment is not received within the specified time, client agrees to pay all reasonable collection
costs, costs of suit and reasonable attorneys' fees incurred in enforcing the agreement. If payment is
not received within the specified time, the company also reserves the right to:

a. Cancel existing projects

b. Refuse new projects

c. Pursue any rights and remedies it may have under applicable laws

d. Interest charges may applied:

Terms Interest Rates

(after delivery date )
1 – 30 days 2 % surcharge

31 – 60 days 2.5% surcharge

61-90 days 3% surcharge

5. When any part of an account for advertising becomes delinquent, then the entire amount
owed shall become due and payable and company may refuse to produce further advertising
materials.
20
6. There will be a Php 2,000.00 charge for any check not honored by the bank. Returned checks
must be replaced with certified/cashier/wire transfer funds within 48 hours of notification. Company
reserves the right to withhold further advertising pending receipt of replacement funds.

7. In the event an account is referred to a third party for collection, clients agrees to pay
collection and/or attorney fees, as well as court costs incurred to effect collection.

8. In case the company failed to collect past due accounts, bad debts will be declared after one
year.

9. Terms, conditions, rates or agreements not set forth herein or in then-current rate schedules
are not binding on company. Sales representatives and account executives are not authorized to
modify these terms and conditions.

21