Accounts Receivable and Credit Policies Management

Course Overview

Learn the most effective ways to manage credit, accounts receivable and debt collection within any business or organization. This practical 4-day training course will show you how to improve your organization's processes to increase the efficiency of credit collection. You will understand the types of available customer data, why accounts become overdue, and how to detect early warning signs. We look at how to best deal with customer excuses and manage disputed accounts correctly, and how to successfully negotiate repayment arrangements. In this course, we’re going through all the basics. Using a ‘ground-up’ approach, we’ll be covering topics such as approving credit, the billing process, collecting money, customer service, handling deductions, legal considerations, bankruptcy, as well as many other important topics.

Course Objectives

Participants will gain the following outcomes

  • Apply and gain an in-depth knowledge on accounts receivable and credit policies management.
  • Develop effective credit policies that meet company’s objectives.
  • Use financial and non-financial analysis to assist in making the credit decision.
  • Define the function of Accounts Receivable (AR) and its role in organizations.
  • Maintain effective collection policy.
  • Evaluate the Accounts Receivable process and implement best practices.
  • Apply tools and techniques to effectively monitor AR performance.

Course Content

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
  • Analyzing Selected Financial Ratios

Setting the Credit Limit

  • Establishing a Profitable Relationship with the Customer
  • Meeting the Needs of the Customer

The Billing Process

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, It’s Time to Collect Your Money

  • Cash: It’s Worth your Efforts
  • Tips, Techniques and Guidelines for Faster Collection

Importance of Setting a Collection Policy

  • Using Different Approaches in Collection

Strategies in Dispute Management

Best Practices in Collection

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 AR Portfolio
  •  Segment the Portfolio

Formulating an Approach for Specific Segments

Keeping in Control

Internal Controls in AR Processes

AR and the Monthly Closing of Accounts

  • Outsourcing of Accounts Receivable Functions

Course Methodology

The training is going to be highly interactive combination of lectures, group discussions, questionnaires, individual reflections, role plays, simulations and videos.

Target Audience

This course is intended for all Accounts Receivable (AR) department managers, credit managers, AR staff, AR and revenue accountants, credit officers, billing and collection clerks, AR specialists, and professionals in accounting, finance, operations and sales who interact with Accounts Receivable and credit department.

Duration

4 Days (08:30–14:30) with appropriate breaks for tea/refreshments and lunch.

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