DIVINE WORD COLLEGE OF LEGAZPI

COLLEGE OF BUSINESS EDUCATION

Accountancy Department
Legazpi City

CERTIFICATION OF THE EDITOR

This is to certify that the thesis entitled, RECEIVABLE MANAGEMENT
PRACTICES OF SELECTED CABLE TV SERVICE PROVIDERS IN LEGAZPI CITY
prepared and submitted by KATHLEEN B. BATALLER and REINA D. LAYSON, for the
degree of Bachelor of Science in Accountancy has been edited by the undersigned, and
reviewed to conform to the institutional format of Divine Word College of Legazpi,
College of Business Education and elements of technical writing.
Issued this _____ day of __________, 2013 at Divine Word College of Legazpi,
Legazpi City.

TRESSA ADELFA M. MORTOLA, CPA, MPA

Editor

DIVINE WORD COLLEGE OF LEGAZPI

COLLEGE OF BUSINESS EDUCATION
Accountancy Department
Legazpi City
RECOMMENDATION FOR FINAL ORAL EXAMINATION
This

thesis

hereto

attached

entitled

RECEIVABLE

MANAGEMENT

PRACTICES OF SELECTED CABLE TV SERVICE PROVIDERS IN LEGAZPI CITY

prepared and submitted by Kathleen B. Bataller and Reina D. Layson, in partial
fulfillment of the requirement for the degree of Bachelor of Science in Accountancy is
hereby submitted to the Thesis Committee for consideration and approval.

TRESSA ADELFA M. MORTOLA, CPA, MPA

Thesis Adviser

THESIS COMMITTEE
In partial fulfillment of the requirements for the degree of Bachelor of Science in
Accountancy, this undergraduate thesis entitled, RECEIVABLE MANAGEMENT
PRACTICES OF SELECTED CABLE TV SERVICE PROVIDERS IN LEGAZPI CITY
prepared and submitted by Kathleen B. Bataller and Reina D. Layson, is hereby
recommended for Oral Examination.

MA. DARIA N. LABALAN, CPA, MBA

Chairperson

ENGRACIO M. LUCINADA, CPA, MBA

NICETAS F. MARILAG,

CPA, MBA
Member

Member

DIVINE WORD COLLEGE OF LEGAZPI

COLLEGE OF BUSINESS EDUCATION
Accountancy Department
Legazpi City

RESULT OF FINAL ORAL EXAMINATION

Candidates

: KATHLEEN B. BATALLER
REINA D. LAYSON

Title

: RECEIVABLE MANAGEMENT PRACTICES OF SELECTED CABLE

TV SERVICE PROVIDERS IN LEGAZPI CITY

Date

: APRIL 17, 2013

Time

: 1:30 2:30 PM

PANEL OF EXAMINERS

ACTION

MA. DARIA N. LABALAN, CPA, MBA

Chairperson

___________________

ENGRACIO M. LUCINADA, CPA, MBA

___________________
Member
NICETAS F. MARILAG, CPA, MBA
Member

___________________

TRESSA ADELFA M. MORTOLA, CPA, MPA

Thesis Adviser

DIVINE WORD COLLEGE OF LEGAZPI

COLLEGE OF BUSINESS EDUCATION
Accountancy Department
Legazpi City

APPROVAL SHEET

Upon the recommendation of the Final-Oral Defense Committee, this

undergraduate thesis entitled Receivable Management Practices of Selected Cable
TV Service Providers in Legazpi City prepared by:
Kathleen B. Bataller
Reina D. Layson
is hereby approved in partial fulfillment of the requirement for the degree of
Bachelor of Science in Accountancy.

ENGRACIO M. LUCINADA, CPA, MBA

Class Adviser

TERESITA Ll. NACION, Ed.D.

Dean of College of Business Education

ACKNOWLEDGEMENT

The researchers would like to extend their sincere and deep gratitude to the
following persons who assisted and supported them in making this thesis possible.
Rev. Fr. Crispin C. Cordero, SVD, President of Divine Word College of Legazpi,
for being an instrument for academic growth gained in the completion of the study in
DWCL.
Teresita Ll. Nacion, Ed.D., Dean of the College of Business Education, for her
continuous motivation and inspiration that greatly helped the researchers to develop the
study.
Tressa Adelfa M. Mortola, CPA, MPA, the thesis adviser, for providing them
guidance, ideas and suggestions for the further improvement of the study.
The thesis committee, Ma. Daria N. Labalan, CPA, MBA, Nicetas F. Marilag,
CPA, MBA, for their constructive suggestion and critique of the study.
Engracio M. Luciada, CPA, MBA, for his patience and encouragement which
enabled the researchers to pursue its completion.
The Respondents: DCTV Cable Network and ESTV Cable Television
Network, for their time, trust and utmost cooperation in answering the survey
questionnaire.
The Parents of the researchers, for the invaluable support, unconditional love
and understanding which served as inspiration to finish the study.

The Friends of the researchers, for always being there to give them
encouragement and support throughout the completion of this study.
And, to all not mentioned who in one way or another have contributed something
that made this study possible.
Above all, to Almighty God for giving the researchers His countless blessings,
gift of life, wisdom, knowledge, inspiration, strength and determination to go through the
study.
K.B.B & R.D.L

ABSTRACT
Kathleen B. Bataller
Reina D. Layson

RECEIVABLE MANAGEMENT
PRACTICES OF SELECTED
CABLE TV SERVICE
PROVIDERS IN

LEGAZPI CITY
(An Undergraduate Thesis
Presented to the College
of
Business Education, Divine
Word College of Legazpi,
Legazpi City, March 2013)
Cable TV service providing is one the businesses where receivables serve as the
main stream of transactions they are engaged other than the operations. This type of
business would show us how they handle the complexities in managing receivables.
The management of receivables of cable TV service providers is done by
continuous evaluation and improvement of the internal control integrated in the billing
and collections of the company. Receivable management is the formulation and
administration of plans and policies of an account and ensuring the maintenance of
receivables at a predetermined level and their collectability as planned.
This study determined the receivable management practices of selected cable
TV service providers in Legazpi City. Specifically, the study sought to answer the
following:
1. What is the profile of the selected cable TV service providers in terms:
a. Form of ownership
b. Years of operation
c. Number of subscribers
d. Annual gross revenue
e. Annual operating expense?

2. What are the receivable management practices of the selected Cable TV Service
Providers in Legazpi City in terms of:
a. Billing
b. Collection
3. What are the problems encountered by the Selected Cable TV Providers in
Legazpi City along the above-cited variables?
4. What are the measures adopted by the Selected Cable TV Providers in Legazpi
City to address the problems encountered?
The research theory of the study is the Reporting-driven Downward Spiral Theory
of John G. Salek. It is a dicusses the phenomenon that starts when receivables are
below expectations.
The respondents of the study are the DCTV Cable Network and ESTV Cable
Television Network. The study made use of a descriptive method of research. The
responses to the survey questionnaire were analyzed and interpreted using weighted
mean.
Findings
After a careful analysis of the data gathered, the following are the findings of the
study.
1.

With the gathered data about profile of the respondents, cable TV service
providers in Legazpi City are operated by corporation. One of the cable TV service
providers is operating their business in more than 17 years in the industry while the
other operates for 20 years. They cater service in the entire Albay province and other
neighboring provinces which gave 3,350 and 1,421 subscribers for the two
respondents.

Having annual gross revenue of Php 7,425,045 and Php 14,035,996.56 with
matching annual operating expense of Php 6,983,101 and Php 13,302,726.72
2.

respectively shows that cable TV providers are profitable.

In terms of billing, the respondents bill their customers monthly. Bills are then
reconciled with official list of subscribers. They notify their clients through personal
delivery. The cable TV providers sometimes allow their customers to have more than
one unpaid bills. Credit balances are also reviewed monthly. They sometimes allow
writing off of bad debts. In a month, they write off minimum of 1 to 3 accounts and a
maximum of 7 accounts.
The respondents use accounts receivable in transactions with the subscribers.
They collect payments through collectors or over-the-counter and usually receives
cash and checks as payments. Prepayments are sometimes practiced in the
company. When a notice of notification for disconnection is received, the customers
are always allowed 1 to 15 days. The delivery of bills to customers and the collection

3.

of payment are done by one person and issues official receipt upon payment.
Despite the practices implemented in managing receivables, problems are not
avoided. The cable TV service providers, in terms of billing sometimes encounter
misstatements of amounts and human errors/typographical errors. They sometimes
do not bill some customers because of mistakes. Lost documents and delay of
handling bills to customers are also encountered at times. Having not updated
records are never encountered by the management. This implies that errors are not
detected and corrected at times. This will further lead to problems encountered in
collections.
Late payments are always encountered by the cable TV service providers. This
implies that the respondents do not implement enough strictness in collecting from
their subscribers. Low collection due to fortuitous events is sometimes encountered.
Counterfeit payments are sometimes received by the respondents. They never

10

encounter lost payments, clients that do not have good credit standing and
inadequate collection procedures.
4.
Several measures are adopted by cable TV service providers in Legazpi City to
address the problems mentioned. In terms of billing, double checking the bills before
giving to customers is done. The employees also undergo training. Individual
receivable records are posted only from authorized source documents to certify the
genuineness of the records.
Customer database and usage records are accurately maintained. This is done
for them to easily access the records and detect any errors. Credit policy of the
company is also continuously evaluated and improved to minimize credit risk
Other measures in managing receivables in terms of collections include service
disconnection. Service disconnection is one of the options to collect the amounts due
as rapidly as possible. Policies and procedures are also clearly stated and
systematically communicated to customers. The cable TV service providers
implement strict collection policy to allow the company to recover receivable amounts
from customers. The cable TV service providers adopt neither offering promos that
encourage early payment nor charging interests and penalties on delinquent
accounts. They do not also ensure the genuineness of the payment received thru
bank deposit.

Conclusions
Based from the foregoing findings, the study revealed the following conclusions:
1.

The selected cable TV service providers in Legazpi City are operated by

corporation. The business proved that it can last for long period of operation. The

11

number of subscribers is not also the basis to gain more income but on the proper
way of collecting receivables to generate revenue and incurring expenses.
2.
The receivable management practices of cable TV service providers shows that
the relationship between the service providers to the customers are systematic for
they give consideration to the customers without sacrificing their financial affairs.
They allot time for the steps in preparing the bills to be definite in every record
and avoid mistakes as possible. The cable TV service providers give importance to
their customers by collecting the payments in which clients are convenient. Their
collection practices of the respondents favor the customers because additional costs
are not charge even if they have overdue accounts. Giving them enough or even
more time in paying their bills is one of the effective collection practices the
customers are offered.
3.
The respondents seldom encounter problems regarding billing although errors
are not sometimes detected. These are unintentionally done and cannot be
prevented because they are caused by circumstances that cannot be controlled.
The most common problem encountered by the cable TV service providers is the
late payments of the customers. It sometimes happens in the company because they
are not strict in the collection processes. They do not apply a more suitable and
effective policies to avoid and minimize their problems regarding collections. They
cannot easily detect those who are not honest payers.
4.

Given the problems encountered in managing receivables, the respondents

adopted measures to address these. The receivable records are treated properly
with the use of authorized source documents and customer database to ensure safe
keeping. The organization of bills is also given attention to easily monitor the billing
system of the cable TV service providers. The respondents also continuously
evaluate and improve the credit policy to minimize errors regarding billings.
The cable TV service providers only charge fixed amount for they do not offer
promos or discounts to encourage early payment or charge interests that
12

respectively increase and decrease the amount due. As a consequence to customers

for not paying, service disconnection is the measure being adopted by the cable TV
service providers to discontinue rendering service.
Recommendations
From the findings and conclusions made, the following are presented by the
researchers by way of recommendation.
1. The cable TV service providers should set an exact date of the delivery of
bills.
2. They should also set precise number of bills to limit the number of
outstanding balances that they may encounter.
3. They must keep back up records of their bills to have another copy in case
the documents are lost.
4. Misstatement or errors must also be minimized by having careful inspection
of the records.
5. Cable TV service providers should allow accepting payment through bank
deposits to make it more convenient for the customers to pay their bills.
6. The receipt of counterfeit payments may also be addressed by having their
collectors undergo seminars that could help them distinguish this type of
payment.
7. They may also implement one month deposit to the subscribers to avoid
future losses.

13

Table of Contents
Content

Page

Title Page

Editors Certification

ii

Result of Oral Examination

iii

Recommendation for Oral Examination

iv

Approval Sheet

Acknowledgement

vi

Abstract

viii
14

Table of Contents

xv

List of Tables

xviii

List of Figures

xix

CHAPTER
I

THE PROBLEM AND ITS SETTING

Introduction

Statement of the Problem

Scope and Delimitation

Significance of the Study

Notes
6

II

REVIEW OF THE RELATED LITERARTURE

Related Literature and Studies

Synthesis of the-State-of-the-Art

22

Gap Bridged by the Study

24

Theoretical Framework

25

Conceptual Framework

27

Definition of Terms

27

Notes

30

15

III

IV

RESEARCH METHODOLOGY
Research Method

32

Sources of Data

32

Respondent of the Study

33

Research Instrument

33

Data Gathering Process

34

Statistical Treatment

34

Notes

36

RECEIVABLE MANAGEMENT PRACTICES OF SELECTED CABLE TV

SERVICE PROVIDERS IN LEGAZPI CITY
Profile of the Respondents

37

Receivable Management Practices

Billing

38

Collections

40

Problems Encountered in Managing Receivables

42

Measures Adopted to Address Problems Encountered

45

SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

Summary

48

Findings

49

Conclusions

52

Recommendations

53

Areas for further Study

54

16

REFERENCES
Books
Unpublished Materials
Internet Sources

56
56
56

APPENDICES
Appendix A Survey Questionnaire to the Accounting Department

59

Appendix B Letter to Department of Trade and Industry

64

Appendix C Letter To The Respondents

66

CURRICULUM VITAE

List of Tables
Table
1
2
3
4
5
6

Title
Receivable Management Practices in terms of Billing
Receivable Management Practices in terms of Collections
Problems Encountered in terms of Billing
Problems Encountered in terms of Collections
Measures Adopted to Address the Problems Encountered in
Billing
Measures Adopted to Address the Problems Encountered in
Collections

17

Page
39
41
43
44
45
46

List of Figures
Figure

Title

Page

Theoretical Paradigm

26

Conceptual Paradigm

28

18