Course Methodology

This course demonstrates theoretical and practical core topics and introduces Excel for managing Accounts Receivable. The course also features role-playing and presentations by participants.

Course Objectives

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 monitor AR performance effectively

Target Audience

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.

Target Competencies

• Managing Accounts Receivable 
• Understanding the implications of credit decisions and policy
• Accounts Receivable analysis
• Collection techniques
• Adopting efficient billing techniques
• Preparing accounts receivable aging report
• Monetizing accounts receivable
• Utilizing Excel functions

Credit Policies Management

• Credit department responsibility
• Factors affecting credit policies
• The five Cs of credit
• Non-financial factors affecting credit decisions
• Outline of a credit policy
• Credit department mission
• Credit department objectives
• Roles and responsibilities
• Procedures
• Measuring results
• Reviewing new accounts
• Re-evaluating existing accounts
• Financial statements: What to look for
• Analyzing selected financial ratios
• Setting the credit limit
• Establishing a profitable relationship with the customer
• Meeting the needs of the customer

The Billing Process

• An efficient billing process means faster collection
• Preventing the fatal mistake: Sending the bill with errors
• The use of technology
• Impact of up-front operations on billing
• Best practices in billing

You Made the Sale; Now Collect Your Money

• Cash: It is worth your efforts
• Tips, techniques, and guidelines for faster collection
• Importance of setting a collection policy
• Using different collection approaches
• Strategies in dispute management
• Best practices in collection
• Accounts Receivable factoring, pledging, and assignment

The Relationship Between Sales and Credit

• Breaking the ice
• Maintaining credit sales relationships
• Improving relationships with sales
• Customers not meeting credit standards
• Role of sales in issuing credit and in collection

Accounts Receivable Process Analysis

• Improving the quality of Accounts Receivable
• Aging of Accounts Receivable and bad-debt reserves
• Alternatives to computing bad-debt
• Reducing bad-debt write-offs
• Calculating Accounts Receivable turnover
• Calculating Days Sales Outstanding (DSO)
• Calculating Best Possible Days Sales Outstanding (BPDSO)
• Collection Effectiveness Index (CEI)
• Analyzing the operating and cash cycles
• Managing AR through portfolio strategy
• Analyzing the size, composition, and complexity of the AR portfolio
• Segmenting the portfolio
• Formulating an approach for specific segments

Staying in Control

• Internal controls in AR processes
• AR and the monthly closing of accounts
• Outsourcing of Accounts Receivable functions
• AR and working capital management
• Factoring of accounts receivable