Julio Martínez Molina

CIENFUEGOS.— The situation regarding accounts payable and receivable, a topic which Granma has followed closely in the province since 2011, has shown a positive trend. Comparing the situation three years ago with the current, reveals a very distinct picture.

Financial indiscipline, lack of supervision and control, the mockery of contractual commitments, the failure to provide information to supervising bodies and other shortcomings resulted in overdue payments in the millions by the beginning of the decade.

Following a call from the country’s highest leadership, the province began working to reverse this negative outlook, and the transformation was so positive that it has become a point of reference today.

The Ministry of Finance and Prices is the governing body of this important sector. We questioned María del Carmen Serra Lliraldi, head of the Provincial Department.

—What is the current state of accounts payable and receivable in the province?

—The accounts payable and receivable continue to show encouraging trends with decreasing overdue balances, both payable and receivable. Compared with December 2013, the volume of overdue accounts has not increased.

"Cienfuegos is at the forefront in this area. In a recent meeting at the Ministry of Finance and Prices the issue was analyzed and this was one of the exemplary provinces due to the positive outcomes regarding balances and the progress demonstrated so far."

"The numbers attest to this fact. At the end of September, the amount of outstanding accounts receivable was 769,200 pesos, 0.3% relative to the total, and we can see a positive situation as they have decreased by 1,906,700 pesos compared to August."

"Meanwhile, in the area of outstanding accounts payable these amounted to 2,360,400 pesos, representing 0.9% of the total; and similarly, demonstrated a very healthy trend decreasing by 1,213,600 pesos compared with the previous month."

"To give the reader a clear idea of the issue, less than five years ago these numbers were in the tens or hundreds of millions in both cases".

—What has caused this positive turnabout?

— The complete monitoring and tracking by the authorities of the province, the level of responsibility taken by directors of companies involved in this task, and the attention paid to contracting, implementing Guideline 10 of the Sixth Party Congress."

"Planning has also played a crucial role, now contracts are agreed with the inclusion of payment terms: which are not just 30 or 60 or 90 days. The client makes a pact with the provider according to their ability to pay, which in turn decides the payment period. For example, if it is agreed that the balance will be paid within 45 days, once 30 days has passed, the account is not overdue."

"The level of conciliation by the municipal and provincial finance offices with clients and suppliers, exchanging information, has also influenced the outcomes. Firms with overdue balances inform us of their debtors; conciliation between the parties begins based on the specific situation, and the matter is monitored and followed closely, until we reach a solution."

"When payment commitments established based on the determination of demands and necessary resources have the logical financial support, there are no obstacles to payments being honored on time. This is what is happening".

— However, difficulties persist in the concentration of overdue debts between entities subordinate to or serviced by the same agency, such as in Agriculture. What has been done to solve the problem?

—"It is a historical difficulty, for years there was a very unfavorable outlook regarding various entities and their lack of liquidity, but the landscape has tended to change color steadily through the gradual capitalization of several of these companies."

"In the same way, other state enterprises such as the Maintenance and Construction Company and the Abreus Trade and Gastronomy Company were or are entitled to such benefits".

— What can be done, in general, to ensure further improvements in the area?

—Do a better job in contracting, because despite progress made, there are still flaws with contracts which haven’t been updated. Improve conciliation between what was agreed and the negotiation process between the client and the supplier. Also, in some cases, the timeliness of payments by relevant entities should be improved."