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Credit Control & Debt Recovery Procedures

DEFINITIONS

1.1 Debt Collection is the execution of functions necessary to collect unpaid income for the company, owed by customers who   are debtors.

1.2 Credit Control is the limiting of further services and sale of products to debtors in arrears and the negotiation for payment in exchange for normalizing further product supply and service delivery.

1.3 Due date means the date indicated on an account statement by which time payment of the amount on the statement is required.

THE PURPOSE OF THE GUIDE

In order to sustain the Company’s excellent product and continued service delivery, the collection of Sales revenues on account statements submitted to debtors (current accounts) must be realized within a turnover rate not exceeding 30 days unless other wise stated. Payment of arrears must also be addressed sufficiently for the main categories of debtors in order to minimize arrear debtors.

This guide serves to clearly document the key elements of Credit Control and Debt recovery to be implemented within your company and interventions to be implemented for non-compliance with the guide

BACKGROUND

To increase the sales, the company may grant credit facilities to its customers. These customers become debtors, as they owe money to the company. As long as there are debtors, a need arises to control their accounts as some debtors may, by nature, have an unwilling tendency to pay their debts and other debtors may become insolvent or bankrupt, etc

The Credit Control function is divided into Payment Demands, Cut-offs and possible Legal functions. The “Cut-offs” functions include services and product supply restrictions and follow-up on non-responses.

The Debt Collection function includes the issuing of reminder letters, payment arrangements, telephone collections, field visits and inactive accounts with the related arrears written off. The Legal functions deal with Attorneys and inactive accounts

Conclusion and customization

 Highly versatile, very sophisticated financial template and friendly user

If you have any inquiry, modification or to customize the model for your business please reach us through: support@ecorporatefinance.com

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