Managing and Organising Accounts Receivable

Introduction

In the drive for increased revenue and profit, good credit and collections management is an important process to maximize cash flow for operations. Granting credit carries a higher risk of bad debts, delays, uncertainty, and even possibilities of spoiling business relations. Companies are continuously in search of better solutions and better strategies to manage their credit, recognizing that whilst credit is an essential sales tool in today’s competitive environment. Due to the recent credit crisis sweeping the global economy, fluctuating interest rates, increasing competition, and growing uncertainty, managing credit and collections effectively is becoming more of a challenge. All industries are exposed to credit issues. As a consequence, granting credit effectively is becoming more of a challenge.

By attending this event, delegates will understand:

• The importance of credit to the company and the economy
• The “cost of credit” and its impact on company profitability
• Practical steps that reduce bad debt losses and “uncollectible” debtors
• How to deal with companies, sole traders, consumers
• How to use different tools and techniques to maximize cash collection effort
• The Legal Framework for collection activities
• Recognizing the increased professionalism to deal with the current and future topics
• Increased recognition by the organization of their learning and professional commitment
• Challenging themselves in an immersive learning environment

Competencies Emphasised

• Attendees will gain the following competencies as a result of the program:
• Using financial information for guiding decisions
• Clarifying KPIs across different functions
• Building strategic thinking and implementation orientation into their professional lives
• Challenging the status quo of finance/accounting, budgeting, and decision making
• Recognizing the value of external standards, governance requirements, and measurements of qualitative elements
• Identifying Value Creation principles as the driving force for decision making

Objectives

This truly complete course provides the delegate with an effective collections tool-kit and presents complex concepts in easily understood modules. This program is unique in two ways:

• The comprehensive approach to the subject matter 
• The instructor’s interactive and engaging approach to facilitate

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practices. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

This course provides a user-friendly environment to develop the knowledge and techniques related to accounts receivable and is valuable for:

• Finance Managers
• Accountants
• Credit Control
• Accounts Receivable staff
• and others who are working within an accounts receivable process or who wish to develop a practical toolkit to complement their existing professional or technical skills

Course Outline

Day 1: An Introduction to Accounts Receivable

• Working Capital and Cash Management
  • Managing working capital
• Cash management and the bank facility (line of credit)
• Understanding “the cost of credit”
  • Why credit management is important to the survival of businesses
  • The ‘order to cash’ process
  • Understanding “risk” in “credit”
• Accounts Receivable and effective customer service
  • Identifying underperforming areas to increase customer satisfaction                         

Day 2: Customers and trading terms

• Terms of trading
• Customer credit evaluation
• Tools and techniques of financial analysis: ratios; trends; common size analysis
  • The best performance measure – cash or profit?
  •  Financial distress and the Altman's Z score-type analyses
  •  Trend analysis
  •  Common size (or horizontal) trend analysis of financial statements
  •  Vertical trend analysis of financial statements
• Segmental analysis of financial statements
• Value-added analysis of the financial statement

Day 3: Developing Effective Strategies to Maximize Cash Collection

• Identifying effective “pre-delinquency” collection campaigns
• Defining “post-delinquency” activities
  • Customer-sensitive collection strategies
  • Collection techniques and letter cycles
  • Appropriate internal and external escalation steps
• Using workflow management to maximize collector performance

Day 4: Practical Collection Tools and Techniques

• Eliminating barriers to payment
  • Good practice in billing management
  • Managing customer queries
• Recognizing excuses and delaying tactics
• Providing solutions to non-payment
• Litigation and recoveries
  • Legal steps and enforcement
• Telephone Collection Techniques
• Preparing for the call
• Negotiation skills for successful collections
• Communicating and listening skills
• Building relationships with customers

Day 5: Managing the Receivables Ledger

• Developing effective internal relationships to maximize performance
• Setting targets and tracking performance
• Managing information that dazzles
• Defining meaningful KPI’s
• Latest Developments in Accounts receivable