Debtors’ Management Package
Debtors Management is an enormous problem for the majority of small/medium enterprise operators who have given credit to their customers.
The Small Business and Family Business Ombudsman recently indicated that the Australian debtors’ days outstanding is one of the highest in the western world at 56.8 days.
The ESS BASIP Debtors’ Management System assists accountants to advise SME clients on an appropriate debtors’ management system which should contribute to the lowering of debtors’ days outstanding, thus creating to an improved cashflow position for the business.
The material within the Debtors’ Management System comprises a Debtors’ Management Procedure Control Form to guide you through the process of evaluating the debtors’ system and making recommendations for improvements, including:
- Quotation and Proposal
- Preamble (after receiving client’s acceptance for proposal)
- Systems’ Review (Questionnaire)
- Briefing Material (commentary mainly for accountant’s use – you could incorporate some items in your recommendations and report)
- Systems Evaluation (templates that you might recommend to your client)
- Debtors Monitoring (templates to assist in the monitoring of debtors)
- Protection Against Liquidators – Preferential Payment Claim
- Debtors’ Reporting (templates to assist the accountant in the report preparation)
1. QUOTATION AND PROPOSAL
Paper on Debtors’ Management.
Work Programme, Budget, Quotation Form for the Debtors’ Management Evaluation Assignment.
Proposal for a Debtors’ Management Evaluation Template which you can use or prepare your own.
(After receiving client’s acceptance of proposal).
Assignment Control Form to assist in the allocation of work to the various team members.
3. SYSTEMS’ REVIEW (QUESTIONNAIRE)
Debtors Review Questionnaire – to enable an in-depth review of the client’s debtors system to assist in the identification of any weaknesses.
4. BRIEFING MATERIAL (commentary mainly for accountant’s use – you could incorporate some items in your recommendations and report)
- Debtors’ System Forms and Documents
- A number of forms that could be utilised in the process
- Director’s Personal Guarantee and Indemnity Form – a sample of a guarantee form
- Debtor’s Statement Policy Form to assist in advising the client on debtors’ procedures
- Debtors’ Monitoring – commentary on:
- System to ensure payment
- Account Queries
- Overview Accounts
- Strategies to assist being paid on time
- Debtors’ Management – a commentary on:
- Proactive management of debtors
- Procedures for effective debtors’ management
- Lookout for warnings
- Successful debt management
- Key to effective debtors’ management
- Communication is very important
- Hints on debtor collection
- Introduction to Online Collection Software to assist with the management of debtors – IODM has a special offer for ESS BIZTOOLS clients
- Debtors discounting and factoring
- Articles which you can send to clients
- Debtors Insurance – material on debtors’ insurance that is available including export insurance
5. SYSTEMS EVALUATION (templates that you might recommend to your clients)
- Debtors Management System Introduction Checklist – a checklist to review all aspects of the client’s debtors system.
- Application to Open an Account (a template which you could use or edit to suit your client’s requirements)
- Customer Application Due Diligence Checklist (a template which you could use or edit to suit your client’s requirements)
- Approving Prospective Customer Form (enables a full record to be prepared of the due diligence review of a prospective credit customer)
- New Customer Control Sheet (a record of the decision made relative to granting credit)
- Welcome to New Customer Letter (a template of a letter that can be prepared for the new customer recording credit limit, terms of trade, any requirements from the customer relative to information to be included on the tax invoice, lodgement dates for tax invoices for prompt payment by the customer etc.)
- Customer Purchase Procedures (a form to assist in advising the client on debtors’ procedures)
6. DEBTORS MONITORING (templates to assist in the monitoring of debtors)
- Debt Recovery Letter Template
- Online Debt Management System – IODM (Digital Debt Management)
- Debtors’ days outstanding Calculation Sheet – (can assist to introduce a system for your client to calculate their debtors’ days outstanding each month)
- Debtors Reduction Checklist (can assist the client to implement a procedure to develop monthly targets for the reduction of amounts owing by debtors)
7. PROTECTION AGAINST LIQUIDATOR’S PREFERENTIAL PAYMENT CLAIMS
- Conditions of an Unfair Preference Claim (summarises the problems for businesses and highlights why businesses should register customers on the Personal Property Securities Register)
- Personal Property Securities Register – Debtors’ notes
- Steps to be taken by a business to protect itself against “unfair preference claims” by a liquidator
8. DEBTORS’ REPORTING (templates to assist the accountant in the report preparation)
- Debtors Management Action Plan
- Debtors Management Report