Payment Discipline

Payment Discipline

 

the precise observance by socialist enterprises and organizations of the deadlines and procedures for meeting monetary obligations. Payment discipline helps strengthen the khozraschet (profit-and-loss accounting) system. In the USSR there is a definite sequence for payments (seeNONCASH PAYMENTS). A system of liability has been established for cases in which economic organizations and legal (juridical) persons have violated the accepted rules for settling accounts in the national economy. Thus, as stipulated in the Decree of the Council of Ministers of the USSR of Aug. 22, 1973, a penalty is paid by enterprises to the bank for submission of fictitious payment documents that cover shortfalls, for various types of tampering, or for overstatement of the volume and value of construction and erection work; it equals 7 percent of the total amount by which a sum has been overstated or otherwise distorted. In cases of violation of the conditions for the deposit of freight in safe custody, the bank collects a penalty from the enterprise of 8 percent of the value of the used commodity. For the delayed or incorrect transferring of the amount due to the enterprise, the bank, in turn, pays a penalty of 0.5 percent to the holder of the account. Where a violation of payment discipline is due to factors that do not depend upon the work of the economic organizations, a superior organization may provide additional financial aid to an enterprise.

If an enterprise is at fault in a violation of payment discipline, various types of credit restrictions and sanctions are applied in addition to penalties. When an enterprise’s payments on its bank loans have become overdue, the enterprise pays increased interest, usually 10 percent of a loan per annum. An analogous system of liability exists in the other socialist countries. For example, in the Polish People’s Republic, an enterprise pays 12 percent annually for overdue loans, in Hungary 11 to 16 percent, and in Bulgaria 10 percent. In the German Democratic Republic, enterprises pay up to 15 percent per annum for a loan for violating the conditions under which the loan was made.

O. I. LAVRUSHIN

Mentioned in ?
References in periodicals archive ?
3 million Euros will be dedicated to municipal capital investment projects and to supporting ways to enhance citizen oversight of service delivery, and improve revenue generation and payment discipline.
They recommend that the aid for domestic companies expand, that payment discipline in both the state and the private sectors be ensured, and that professionalism in inspection services be stepped up.
A streamlined foreclosure framework is urgently needed to promote payment discipline, where capacity exists, and facilitate restructuring, where ability to pay is constrained by the downturn.
It includes also the approval by the Government of the separate resolution to improve payment discipline at enterprises of all forms of ownership, increase control over the timely payment of wages, as well as identify and eliminate the causes of late payment of wages.
The international lenders want speedy action to improve mortgage payment discipline, increase drug budget savings, bolster efforts to tackle unemployment and implement a long-delayed overhaul of the legal profession.
In general, Russian banks manage their risks well even when consumers' payment discipline drops.
Official corruption, insecure property rights, stifling regulatory restraints, weak payment discipline, poor logistics and distribution, widespread counterfeiting, and vulnerability to other forms of intellectual-property theft: All of these obstacles increase transaction costs and make it difficult for entrepreneurs to thrive in domestic markets.
Net margins in the sector are already low (1-6%), and Resolution au877 will make it hard for the companies to obtain loans, which they need in order to cover cash gaps arising from low payment discipline (accounts receivable in electricity distribution stood at $5.
The register was created with the aim of protecting companies from chronic debtors and to motivate people to improve their payment discipline.
Says Makeev, "We believe the proposed measures[will] significantly strengthen the payment discipline of gas consumers.
eCommLink is uniquely positioned for growth in this category, with capabilities in multiple payment disciplines within and beyond the card processing industry.
Growth Strategy: eCommLink is uniquely positioned for growth in this category, with capabilities in multiple payment disciplines within and beyond the card processing industry.