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Managing Your Account Receivables
Course Number: SBX 7469
Course Title: Managing Your Account Receivables
Course Hours: 6 hours
A good accounts receivable management strategy can turn hard earned uncollected sales dollars in to cash dollars for your company. Learn the key elements (credit, billing, collections) that will help you to maximize the conversion of your uncollected accounts receivable dollars in to actual cash. You will also learn about debt factoring and invoice discounting as a possible strategy to improve your cash flow.
Description:
A good accounts receivable management strategy can turn hard earned uncollected sales dollars in to cash dollars for your company. Learn the key elements (credit, billing, collections) that will help you to maximize the conversion of your uncollected accounts receivable dollars in to actual cash. You will also learn about debt factoring and invoice discounting as a possible strategy to improve your cash flow.
Objectives:
Upon successful completion of this course, the student will:
- Understand the factors for creating a sound credit policy.
- Understand the requirements for setting up a billing process.
- Learn some best practices for keeping the payments coming in.
- Identify some key indicators for measuring your accounts receivable performance.
- Understand the advantages and disadvantages of debt factoring and invoice discounting.
- Determine whether their business is a good candidate to benefit by using debt factoring or invoice discounting.
Content:
- Creating a sound credit policy
- Determine/ forecast your credit investment
- Set credit limits and review regularly
- Determine incentive measures
- Best practices to identify credit frauds
- Setting up a billing process
- Invoice requirements
- Invoice preparation – don’t let dates drive the process
- Tips for accelerating cash flow (i.e. Post Office Box, Lock Box)
- Setting up a bookkeeping system (i.e. QuickBooks)
- Recording sales and receipts
- Generate customer invoices and monthly statements
- Track customer’s current and past-due balances
- Keep the payments coming in
- Watch payment trends
- Selectively monitor credit reports
- Frequent communications with your customers
- Allow customers to pay by credit card
- On rare occasions, convert Accounts Receivable to Notes Receivables
- Convert questionable or delinquent customers to COD
- Measuring Accounts Receivable performance
- How to use reports to manage your performance
- Sample reports
- Accounts receivable turnover ratio
- Average payable period
- Accounts receivable aging schedule
- Bad debt comparison (i.e. compare year to date current year to year to date last year)
- Days Sales Outstanding
- Accounts receivable as a percentage of sales
- Bad debt expense as a percentage of Sales
- Debt Factoring
- Definition
- How it works
- Advantages
- Disadvantages
- Recourse/ non-recourse factoring
- Export factoring – features
- How to pick a vendor
- Invoice Discounting
- Definition
- How it works – how it differs from factoring
- Good candidates for debt factoring
- Suitable characteristics
- Unsuitable business characteristics for factoring
