Introduction
A sizable share of a company's working capital is tied up in Accounts Receivable (AR) and this poses a high liquidity risk. In this course, we expand your knowledge and expertise in AR. This will enable you and your organization to manage your accounts receivable effectively without compromising your credit sales.
Course Methodology of Accounts Receivable and Credit Policies Management
This course demonstrates theoretical and practical core topics in addition to introducing Excel in managing accounts receivable. The course also features role-playing and presentations by participants.
Course Objectives of Accounts Receivable and Credit Policies Management
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
Target Audience of Accounts Receivable and Credit Policies Management
Accounts receivable 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 the accounts receivable and credit department.
Course Outline of Accounts Receivable and Credit Policies Management
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Credit policies management
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Credit department responsibility
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Factors affecting credit policies
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The five Cs of credit
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Non-financial factors affecting credit decision
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Outline of a credit policy
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Credit department mission
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Credit department objectives
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Roles and responsibilities
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Procedures
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Measuring results
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Review new accounts
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Re-evaluate existing accounts
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Financial statements: what to look for
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Analyzing selected financial ratios
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Setting the credit limit
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Establishing a profitable relationship with the customer
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Meeting the needs of the customer
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The billing process
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An efficient billing process means a faster collection
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Preventing the fatal mistake: sending the bill with errors
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The use of technology
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Impact of up-front operations on the billing
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Best practices in billing
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You made the sale, now collect your money
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Cash: it is worth your efforts
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Tips, techniques, and guidelines for faster collection
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Importance of setting a collection policy
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Using different collection approaches
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Strategies in dispute management
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Best practices in the collection
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Accounts receivable factoring, pledging, and assignment
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The relationship between sales and credit
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Breaking the ice
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Maintaining credit sales relationship
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Role of sales in issuing credit and in collection
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Accounts receivable process analysis
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Improving the quality of accounts receivable
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Aging of accounts receivable and bad-debts reserves
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Alternatives in computing bad-debt
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Reducing bad-debt write-offs
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Calculating accounts receivable turnover
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Calculating Days Sales Outstanding (DSO)
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Calculating Best Possible Days Sales Outstanding (BPDSO)
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Collection Effectiveness Index (CEI)
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Analyzing the operating and cash cycles
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Managing AR through portfolio strategy
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Analyzing the size, composition, and complexity of the AR portfolio
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Segmenting the portfolio
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Formulating an approach for specific segments
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Staying in control
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Internal controls in AR processes
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AR and the monthly closing of accounts
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Outsourcing of accounts receivable functions
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