The economic contracting is of vital importance in the fulfillment of the fundamental objectives of an organization because it influences directly from the legal point of view both in the guarantee of the purchase of the main supplies within the terms agreed in them as well as to when carrying out a sales act to the main productions that an organization can carry out to its respective clients and that these are not carried out with a high risk in all aspects.
The present work consists of carrying out an analysis of the main problems existing in the economic contracting process in the Cuenca Dairy Company of Las Tunas as well as the approach of the main causes and effects produced by it over time as well as capturing the main theoretical aspects that influence this process taking into account the existing regulations, where an analysis was made of the first semester of 2007. This research was developed in two chapters: Chapter 1 Theoretical Foundations, Chapter 2 Behavior of Accounts Receivable and Payable and effect received by economic contracting.In the development of this investigation, we become aware of a group of causes that have affected the bad behavior of accounts receivable and payable in the entity and the effect produced by poor economic contracting.
Introduction
The Cuenca Lechera Livestock Company, created by the merger of three companies, after the constitution of the 33 livestock UBPCs and three new type farms, was limited to 84.0 cabs. of land 14.0 of them with irrigation dedicated to various crops recently incorporated.
Being its corporate purpose the purchase of livestock from the UBPC, Farms and private sector for slaughter, milk production, the sale of livestock for slaughter and the relationships and attention provided by Resolution 658/97 of the Minister of Agriculture to UBPC, as well as the CPA and CCS that reside in the municipality, also at this time joins the production of food and vegetables and their marketing through two small plates and delivery to storage.
The main suppliers are:
1- Agricultural Supplies Company.
2- Various Seeds Company.
3- CUPET.
4- Mixed Wholesale Trade Company.
5- CAI Azucarero Colombia.
6- CAI Azucarero Peru.
7- CAI Majibacoa Sugar Bowl
8- Factory. I think Tunas.
9- DIVEP.
The main clients are:
1- CONCAR Tunas, Santiago de Cuba, Guantánamo and Habana.
2- ECIL
3- Collection.
4- Isla Azul and Caribe Hotel Chain.
5- 20 livestock UBPCs, 3 State Farms, 6 Livestock CPA, 19 Strengthened Livestock CCS.
The Company classifies as a producer since it currently guides the work of the UBPCs and GENT but it also has as its fundamental task the provision of services and marketing with the UBPCs, GENT, CPA and CCS to which it provides insemination, pathophysiology, preparation services. land and supplies in general etc.
The present work consists of carrying out an analysis of the main existing problems in the economic contracting process of the Cuenca Lechera Las Tunas Company, as well as the approach of the main causes and effects produced by it in the course of time as well as capturing the main aspects theorists who influence this process taking into account existing regulations.
Chapter I: Theoretical Framework
Economic Contracting
Economic contracting at the Cuenca Lechera Company is fundamentally regulated by the provisions of Decree Law No. 15 (Basic Norms for economic contracts).
Below we list a group of decrees and law decrees as well as resolutions which constitute the fundamental basis of economic contracting which are systematically implemented in the Cuenca Dairy Company:
- Decree Law 241 On Economic Procedure, that is, in this decree regulates everything related to the procedures that are already carried out within the framework of the economic chamber of the court. Decree 53. Regulation of the general conditions of the supply contract Decree 80 Regulation of the general conditions of the contract for the sale of agricultural products Decree 87 Regulation of the general conditions of cargo transportation Joint resolution 02-2006 of the Minister of Agriculture and Internal Trade where products are marketed and regulated agricultural.Other decrees and resolutions that may be applied eventually according to the needs of the circumstances require it.
It is very important to highlight that due to the legal and legal needs of the country, the economic contracting process has been systematically modified as a result of the violations that have existed over time and with the aim that these do not occur, the contracting requires a group of fundamental requirements, that is, this process requires a group of documents that endorse and guarantee that effective contracting occurs according to the needs of society and according to the corporate purpose for which companies have been created in our country and that guarantee that any commercial operation that is carried out has the common sense of legality that we list below:
- Corporate Purpose of the Entity. (Both parties) Resolution of constitution of the entity.Resolution of appointment of the director.Resolution of the Director delegating power to a leader to sign the economic contract.
The economic contract constitutes the effective means of management par excellence, taking into account that through it the productive economic objectives of the entity are guaranteed, since the planned production needs a guarantee support in the supply and sale when determining who get the products.
The current contracts comply with the formalities of the obligations of the parties but are restricted by containing as a cause of force majeure subject to the restrictions of the special period but to others it does not allow one to choose the supplier such as: the Agricultural Supply Company (intermediary between suppliers and companies) who do not guarantee delivery figures, that is, we do not have a management option.
In our opinion, the economic contract that is currently signed is more about guaranteeing the collection and payment relationships than the essence of both the purchase and sale.
The director controls the progress of the execution of the contracts together with the analysis of the development of the production or service plan and keeps track of the supply received or sales made.
It is important to highlight that the economic contracting process as we have proposed is a permanent assessment and evaluation process where in our case in the last quarter of each year the behavior of the same is analyzed and the appropriate measures are taken so that the contract or the annex that will be part of the contractual file is the most equitable for the parties and paying vital interest to those who decide the economic objectives of the entity.
Examples of this are:
- Contract for the sale of large livestock. Contract for the sale of agricultural products. Contract for the sale of fresh milk. Contract for the sale of meat, among others. Contract for the supply of the main inputs that guarantee the productive flow both in the state part and in the base. productive that constitute the UBP, CPA, GENT, CCS Fortalecidas.
Contracts most used in the Cuenca Lechera Las Tunas Company.
In the Cuenca Dairy Company of Las Tunas there are 4 types of contracts as the most used in a systematic way that present a group of peculiarities that differentiate them from each other, which we list below:
- Contract for the construction of housing. 5-year permanent base contract where every year a revision of the same is made, being able to totally terminate them, in part or by adding the necessary annexes or supplements. Eventual contracts that may be for a year, six months or for a single matter or transaction.Internal contracts that are generally for the supply, sale of supplies and merchandise which the company carries out with the 48 units to which state control is carried out, that is, the UBP, CPA, GENT, CCS Strengthened.
It is established that any economic relationship must mediate through an economic contract, therefore the company also makes economic agreements that function as a contract to legally regulate the existing economic relations. In this case, the company makes the following agreements:
- Service provision agreement. Land loan agreement to promote rice production (up to one cavalry).
These agreements were signed with the objective of making viable some specific commercial actions that, although they were within the framework of the internal contracts, a group of procedures were established to be followed, such as the case of land loans for the promotion of rice where aspects derived from these productions were regulated.
Below we list the accounts payable and receivable at the end of April 2007.
Chapter 2 Behavior of the Accounts Receivable and Payable and the effect received by the economic contract
Accounts receivable by age
|
National currency June 2006 |
|||||
|
Dependencies |
Total |
O 30 |
31 60 |
61 90 |
More than 90 |
| Company own body |
168237 |
51155 |
101586 |
523 |
14972 |
| State farms |
24360 |
22367 |
1994 |
||
| Total UBPC |
237829 |
53744 |
133810 |
1218 |
49057 |
| Total CPA |
22690 |
22353 |
337 |
||
| Total CCS |
34456 |
21357 |
3539 |
844 |
8716 |
| Total individual farmers |
34737 |
34737 |
|||
| Mineral companies (meat) |
10025 |
5375 |
1171 |
2361 |
1118 |
| Milk minil |
7524 |
7524 |
|||
| Other company. |
595716 |
276825 |
196714 |
113801 |
8376 |
| Grand Total |
1133573 |
460699 |
471888 |
118747 |
82239 |
|
In currency |
|||||
| Company own body |
15572 |
2240 |
878 |
806 |
11648 |
| State farms | |||||
| Total UBPC | |||||
| Total CPA | |||||
| Total CCS | |||||
| Total individual farmers | |||||
| Mineral companies (meat) | |||||
| Milk minil |
11061 |
11061 |
|||
| Other company. |
94199 |
18466 |
9744 |
22344 |
43645 |
| Grand Total |
120832 |
20706 |
10622 |
23150 |
66354 |
Accounts payable by age
|
National currency June 2006 |
|||||
|
Dependencies |
Total |
O 30 |
31 60 |
61 90 |
More than 90 |
| Company own body |
81063 |
74874 |
6187 |
two |
|
| State farms |
305596 |
305596 |
|||
| Total UBPC |
558309 |
228115 |
600 |
329594 |
|
| Total CPA |
18647 |
18647 |
|||
| Total CCS |
18396 |
18396 |
|||
| Total individual farmers |
18179 |
18179 |
|||
| Mineral companies (meat) |
6610 |
6610 |
|||
| Milk minil | |||||
| Other company. |
129669 |
40269 |
89400 |
||
| Grand Total |
1119515 |
693732 |
6787 |
329597 |
89400 |
|
In currency |
|||||
| Company own body |
4123 |
928 |
3194 |
||
| State farms | |||||
| Total UBPC | |||||
| Total CPA | |||||
| Total CCS | |||||
| Total individual farmers | |||||
| Mineral companies (meat) | |||||
| Milk minil | |||||
| Other company. | |||||
| Grand Total |
4123 |
928 |
3194 |
As can be seen in the previous tables, there are a group of sectors that present their accounts receivable and payable outside the terms established in the contracts, and it was striking to our attention that so far this year there has been no accusatory legal procedure for any of the companies exceeded in these terms and in the investigative process we realize that it is vitally important to exhaust all the existing avenues and means before filing a legal process against any entity, that is to say that you must do everything in terms of collection management, proceed to have sufficient documentary elements to support the accusatory act and in this case there is no documentation to confirm that these efforts have been made.
On the other hand, it is important to highlight and in our opinion it is of vital importance that there is a sense of belonging that is sometimes not observed in the cadres that ensure socialist legality and assume as their own the negative effect that a tendency to breach the law may cause. economic contracting if we intend to perfect the company in our society, the existing chain of defaults causes a series of damages to companies that sometimes produce irreparable damage and we must understand that this directly affects the case of this company mainly in the population, We believe that we must be faithful watchmen for part and part of the fulfillment of contracts, unless it is an objective matter derived from the needs of a material or technology that prevents us from complying,But we know that in many cases these irregularities arise from a subjective problem of accommodation and the habit of not making all the necessary efforts so that the work flows with the due measure required and in other cases due to the lack of knowledge of the steps to be followed in each incident, in the time required and within the ideal framework to resolve the situation.
Consequences caused by the breach of the economic contract.
As we have previously mentioned, the Cuenca Lechera de Las Tunas Company has a complex structure with a fairly extensive production base, which leads to rigorous, arduous work to cover the entire range of activities in which it ventures and reach all places with the same intensity and commitment.
In previous paragraphs we state that the legal part contracted in this company was given the task in the last quarter of redoing all the contracting of all these sectors including the company, preceded in previous years by a group of problems presented in previous contracts.
It is important to note that despite the fact that so far this year no lawsuits have been filed, neither for nor against, there are no problems and that these problems have produced negative effects on the production and management of the company and its base. productive which we mention below:
a) The relations with the productive base at present are sometimes closed due to a problem of payments of obligations and basic products such as oil, feed, food and other inputs that cannot be acquired by the CCS, UBP, CPA, which delays actions such as land clearing, feeding the animal mass, even feeding the workers, which generates a productive imbalance that causes the already critical situation of this productive base to be worse.
b) The company's cash flow plan requires a significant monthly money outlay, which in turn requires precise and systematic financial management to be able to meet all the expenses to be incurred, despite the fact that these disbursements have been met. that only in salary, contributions to the budget that are in the order of 250.0 MP, there have been delays on the part of clients such as Cárnico and Ecil, generating tension to fulfill these obligations.
c) Loss of products and not collecting them, mainly in the cases of agricultural and milk CCS and CPA, which are generated despite the fact that they are not significant figures that they do not reach the preconceived destination.
Conclusions
a) That economic contracting is a dialectical process that must be adjusted to the prevailing conditions according to the needs of the period that is contracted where the new conditions must be taken into account with the objective that the parties that intervene are legally protected.
b) That economic contracting is not just a process of collections and payments and that despite the fact that the legal department is an entity that is contracted by the company, it must at least persuade the board of directors and especially the economic department that You must adopt a position towards existing problems, such as the fact that 7% of accounts receivable in MN are in more than 90 days and 54.9% of accounts receivable in CUC have the same situation, alluding that there is no so far this year no lawsuit with this situation.
c) That the protection of the productive base, that is, the UBPC, CPA, CCS and GENT by the legal department, has been an aspect of vital importance to achieve the Company's objectives, since in economic contracting it was taken into account through a plenary all the aspects that in previous years were not taken into account were adopted in the contracts gaining in many aspects both quality, collection of the productions, quantities that previously lost milk and other agricultural products that today although there is nothing perfect and there may have been a few problems, it has been disciplined thanks to the action of contracting, creating an environment in this sector that is generally deprived of enough enthusiasm to increase production results.
d) That the fulfillment of the economic contracting depends fundamentally on the fulfillment of the production plans in quantity and quality of the main lines contracted and largely depends on collecting the money generated by the sale of these productions with systematic actions that allow their time with fulfilling the obligations to the mass workers and the state.
e) That more than 50% of the accounts receivable in CUC are out of term and so far this year there has been no demand in this regard.
recommendations
a) To continue with the process of revalidation of economic contracting permanently with the aim of perfecting this process and adapting to the conditions that prevail at the time.
b) Always take into account that economic contracting and its follow-up is not a process of collections and payments only, which must take into account a group of factors that allow raising the productive situation of the entity and its productive base that both needs to.
c) That the legal protection of the productive base allows adopting actions in the economic contracting that allows to increase the productive levels with the objective that there are no obstacles for situations of collections and payments between the company and the CCS, UBP, CPA and GENT adopting educational and constructive measures that provoke sufficient awareness to realize that the country cannot continue with this chain of defaults that ultimately affects the people themselves and in one way or another.
d) That the situation of the accounts receivable and payable and the progress of economic contracting is systematically discussed in the board of directors, and unless there is a representation of the forms of production of the productive base with the objective that the contracting Economic is a dynamic and vital powerful weapon that enables the fundamental economic objectives of the company to be achieved as efficiently as possible.
e) That it be acted in the case of accounts receivable outside the terms of the contracts and if necessary, make the pertinent demands in all cases as long as all possible claims have been exhausted by the economic department and for everything the board of directors assigning conciliatory responsibilities to those involved in each case in order to clean up the existing situation.
f) That the accounts receivable in CUC are systematically analyzed in the Boards of Directors and the pertinent measures are taken to resolve that 54% of these are in more than 90 days and 20% are from 61 to 90 days and whether it is necessary to make the relevant demands in each case.
Bibliography
1 Regulation of the General conditions of the Supply Contract. (Decree No. 53 of November 7, 1979.
2 Regulation of the general conditions of the contract of special sale of agricultural products, (Decree 60 of January 29, 1981.)
3 Regulation of the general conditions of the cargo transportation contract (Decree 88 dated May 21, 1981)
4 Regulation of the general conditions of the investment technical documentation contract, (Decree No. 94 dated June 10, 1991)
5 Regulation of the general conditions of the research contract for the projection or execution of the work, (Decree No. 95 dated June 18, 1981)
6 Regulation of the general conditions of the works execution contract, (Decree No. 96 of June 18, 1981)
7 Regulation of general conditions of the contract for technical control of works, (Decree 97 of June 19, 1991)
8 MEP Resolution 2253/2005, June 8, 2005
9 Instruction No. 182/06 of the Supreme People's Court regarding the procedure for processing the preliminary proceedings of the executive process.
10 Instruction No. 183/06 of the Supreme People's Court regarding the procedure for processing the preliminary proceedings of the executive process.
11 Decree Law No. 15 dated July 3, 1978, Basic Standards for economic contracts.
12 Decree Law 241 on the economic procedure, that is, this decree regulates everything related to the procedures that are already carried out within the framework of the economic chamber of the court.
13) Joint resolution of the Ministry of Agriculture and Internal Trade where the marketing of agricultural products is established and regulated.
