No money! No money!

Many Malaysians are complaining about the high costs of living and getting low salaries.

Instead of complaining, stop smoking, stop spending a lot on nasi lemak and the teh tarik. Take breakfast at home, pack your lunch and spend less on unnecessary things.

Tenaga Nasional Berhad (LLN)

In the first week of every month hundreds of thousands (if not millions) of Malaysians would get reminders in sealed envelopes that there are bills in arrears that need to be settled or get a cut in their electricity supplies.

To the non-accounting and common people on the streets there is nothing wrong with that but…

Posting reminders cost money. Probably around 50 sen each (envelope, paper, postage, handling, etc.)

Assuming there are about 2 millions customers = RM0.50 x 2,000,000 = RM1,000,000 per month

Per year = RM1,000,000 x 12 months = RM12,000,000

I was in the accounting/auditing profession for more than 35 years in Malaysia and in the UK. I was a Credit Controller once in a large Newspapers company in Malaysia. As such I’m fully aware of the importance of sending timely reminders at appropriate times.

Allow me to repeat the words “timely” and “at appropriate times”.

“Timely” means “Occurring at a suitable or opportune time; well-timed.” as defined at http://www.answers.com/topic/timely

“At appropriate times” simple means suitable timing. Like you don’t go visiting your married friends around 12 PM. Probably OK with your bachelor friends.

After a diversion back to LLN’s reminders.

Let me ask you a question: How many of you pay your bill before the end of the month? Some of you did? Good, probably because your employees (like the Government of Malaysia) pay your salaries early. Unfortunately the majority pay right on the dot – on the last day of the month.

The majority would get their salaries in the 1^st week of the month and would also settle their bills. Among the bills are those stated in the reminders to be in arrears by LLN.

If LLN were to delay those reminders, say about 7 days, many reminders wouldn’t have to be sent out because many of the bills are no longer in arrears. Assuming that 75 % will pay those bills in arrears in the 1^st week of the month, only about 500,000 reminders need to be sent .

The saving would be:

RM0.50 x 1,500,000 (2,000,000 less 500,000) = RM750,000 per month

Per year = RM750,000 x 12 months = ? (do the calculation youself)

Am I talking stupid?

P. S. Telkom Malaysia send their reminders in the 2^nd week of the month since they know their accounting well.