Planned Payments

Planned Payments 

payments by socialist enterprises used to settle accounts for commodities and materials and for services rendered; also used in paying for short-term bank credit.

In the USSR planned payments are used as a method of payment for goods and services only where there is systematic, relatively constant delivery of goods. Where accounts are settled by planned payments, the enterprises or associations conclude a contract that fixes the volume of planned delivery of goods for a certain period and the amount of the daily payment to be transferred by the purchasing enterprise to the supplier through the bank. Planned payments may be made once every three to five days and, in some cases, once every ten to 15 days. At least once a month the total of payments made is compared with the total goods actually delivered, and a determination is made of the difference, which must be returned to the purchaser or paid to the supplier.

Planned payments accelerate settlement of accounts in the national economy and reduce the time between shipment of goods and receipt of money from the sale of goods. They are used by trade organizations to settle accounts with their suppliers. They are also used between industrial enterprises that cooperate in production and between industrial enterprises and motor transport organizations where centralized freight delivery is used. Planned payments as a method of calling in credit are used where economic organizations are granted credit on special loan accounts. The State Bank of the USSR (Gosbank) monitors the completeness and timeliness of repayment for the credit received by the enterprise. In case of underpayment, the bank collects the appropriate amount of money from the enterprise’s current account. Planned payments are also used by enterprises in other socialist countries.

O. I. LAVRUSHIN