Cash Flow is the life-blood of any business and mounting Receivables will virtually sound the death knell for struggling organizations. Many organizations land in trouble by concentrating on increasing their sales will paying less attention to the ballooning receivables. Uncollected Receivables are direct losses and can cause severe cash flow emergencies. Poor Accounting Policies, lack of Credit Control measures, relaxed payment terms/modes, weak collection methods and follow-up, lack of communication skills are some of the common reasons which impact collections and cause high Receivable balances.

This two-day program will help you to understand the significance of collecting AR on time, the techniques and strategies required to revamp the entire collection approaches and to protect yourself from the risks of uncollected debts

What Will Students Learn?

  • Importance of collecting receivables on time
  • Know what impedes collections
  • Understand the risks associated with delayed collections
  • Strategies and techniques to improve collections
  • How to contribute to better working capital management
  • Importance of sound financial policies
  • How to follow up collections from the Customers
  • Control operating costs and risks of bad debts

What Topics are Covered?

  • Understanding Accounts Receivables
  • Credit Control Policies and Procedures
  • Terms of Trade/Payments
  • Accounting practices
  • Collection Methods and problems faced
  • Customer Relations and Communications
  • Using 3rd Party Collection Agencies
  • Re-skilling and training of Employees

Course Objectives

By the end of the course, participants will be able to:

  • Develop effective credit policies that meet a company’s objectives
  • Use billing best practices techniques
  • Employ effective collection policies
  • Partner with the sales force for the benefit of the company
  • Evaluate the accounts receivable process and implement best practices
  • Apply tools and techniques to effectively monitor AR performance

Course Outline

Credit policies management

  • Credit department responsibility
  • Factors affecting credit policies
  • The five Cs of credit
  • Non-financial factors affecting credit decision
  • Outline of a credit policy
      • Credit department mission
      • Credit department objectives
      • Roles and responsibilities
      • Procedures
      • Measuring results
  • Review new accounts
  • Re-evaluate existing accounts
  • Financial statements: what to look for
  • Analyzing selected financial ratios
  • Setting the credit limit
  • Establishing a profitable relationship with the customer
  • Meeting the needs of the customer

The billing process

  • An efficient billing process means faster collection
  • Preventing the fatal mistake: sending the bill with errors
  • The use of technology
  • Impact of up-front operations on billing
  • Best practices in billing

You made the sale, now collect your money

  • Cash: it is worth your efforts
  • Tips, techniques and guidelines for faster collection
  • Importance of setting a collection policy
  • Using different collection approaches
  • Strategies in dispute management
  • Best practices in collection
  • Accounts receivable factoring, pledging and assignment

The relationship between sales and credit

  • Breaking the ice
  • Maintaining credit sales relationship
  • Role of sales in issuing credit and in collection

Accounts receivable process analysis

  • Improving the quality of accounts receivable
  • Aging of accounts receivable and bad-debts reserves
  • Alternatives in computing bad-debt
  • Reducing bad-debt write-offs
  • Calculating accounts receivable turnover
  • Calculating Days Sales Outstanding (DSO)
  • Calculating Best Possible Days Sales Outstanding (BPDSO)
  • Collection Effectiveness Index (CEI)
  • Analyzing the operating and cash cycles
  • Managing AR through portfolio strategy
  • Analyzing the size, composition and complexity of the AR portfolio
  • Segmenting the portfolio
  • Formulating an approach for specific segments

Staying in control

  • Internal controls in AR processes
  • AR and the monthly closing of accounts
  • Outsourcing of accounts receivable functions