Accounts Receivable and Credit Policies Management

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