Introduction
A significant portion of a company’s working capital is often tied up in Accounts Receivable (AR), creating potential liquidity and cash flow risks. This course is designed to strengthen participants’ knowledge and practical expertise in AR management, enabling them to improve cash collection efficiency while maintaining healthy credit sales and strong customer relationships.
Objectives
By the end of the course, participants will be able to:
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Develop effective credit policies that meet a company’s objectives
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Use billing best practices techniques
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Employ effective collection policies
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Partner with the sales force for the benefit of the company
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Evaluate the accounts receivable process and implement best practices
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Apply tools and techniques to effectively monitor AR performance
Target Audience
- Accounts receivable department managers
- Credit managers
- Accounts receivable (AR) staff
- AR and revenue accountants
- Credit officers
- Billing and collection clerks
- Accounts receivable specialists
- Accounting professionals
- Finance professionals
- Operations professionals interacting with AR and credit functions
- Sales professionals dealing with credit and customer accounts
Outline
Day 1: Credit Policy Management & Credit Evaluation
- Credit department responsibility
- Credit department mission and objectives
- Roles and responsibilities
- Procedures and performance measurement
- Factors affecting credit policies
- The five Cs of credit
- Non-financial factors affecting credit decisions
- Outline of a credit policy
- Review of new accounts
- Re-evaluation of existing accounts
Day 2: Credit Analysis & Credit Limit Setting
- Financial statements: what to look for
- Analysis of selected financial ratios
- Setting the credit limit
- Establishing a profitable customer relationship
- Meeting customer needs while managing credit risk
- Relationship between sales and credit
- Role of sales in credit issuance and collections
Day 3: Billing Process & Credit Sales Efficiency
- The billing process and its importance
- Impact of errors in billing
- Importance of an efficient billing system for faster collections
- Use of technology in billing
- Impact of up-front operations on billing accuracy
- Best practices in billing
- Linking billing efficiency with cash collection
Day 4: Collections Management & Cash Recovery
- Importance of collection policies
- Collection strategies and approaches
- Tips and techniques for faster collections
- Dispute management strategies
- Best practices in collections
- “You made the sale, now collect your money” mindset
- Cash collection importance and discipline
Day 5: AR Performance, Risk & Portfolio Management
- Accounts receivable factoring, pledging, and assignment
- AR process analysis and improvement
- Aging of receivables and bad debt reserves
- Methods for calculating bad debts
- Reducing bad debt write-offs
- AR turnover, DSO, BPDSO, and CEI calculations
- Operating and cash cycle analysis
- AR portfolio segmentation and strategy
- Internal controls in AR processes
- Monthly closing and AR outsourcing considerations
