Improving Credit Management and Debt Collection

Understanding Credit Management and Cash Collection Techniques

Aims and Importance of Effective Credit Management

• The cost of credit

• Impact of bad debts

• Stimulating cash flow

• Effect of overdue debt on profit

• Main objectives

Influencing Customers to Pay You Sooner

• Factors affecting payment

• Strategies for success

• Planning

• Knowing your customers

• Recognizing diverse customer types

Assertiveness

• Non-assertive behavior

• Aggressive behavior

• Assertive behavior

• Benefits of assertive behavior

Using the Telephone as a Powerful Tool for Collection of Money

• Assessing your telephone collection skills

• Rules for successful collection calls

• Taking control of the call tactfully

• Overcoming reasons for non-payment

• Utilizing influencing factors

• Closing the collections call effectively

Effective Communication and Negotiation

• Different communication and negotiation styles

• Improving payments from large, powerful customers

• Face-to-face negotiation techniques

• Adapting to preferred negotiation styles

Maximizing Profitability Through Targets, Performance, and Cash Planning

• Measuring and enhancing performance

• Setting targets for success

• Effective cash planning

• Strategies for improving profitability

Practical exercises: Measuring performance and cash planning

Query Management

• Impact of queries on payment delays

• Improving front-end communication for efficient customer order processing

• Handling purchase orders effectively

• Addressing complications that may arise

• Developing a robust query management system

Group discussions: Exploring and discussing query management challenges

Policy and Procedures

• Policy content and terms

• Understanding main policy objective

• Implementing procedures effectively

• Credit health checklist

Emails and Letters

• Rules for effective communication

• Keeping emails and letters simple and modern

• Influencing the reader positively

Practical exercise: Drafting an email to a customer with an overdue account

Sales and Credit Working as a Team

• Building rapport with the sales team

• Educating customers on your credit terms

• Keeping each other informed

• Efficiently managing customer relationships

Managing Commercial Credit Risk, Accounts Analysis, and Credit Scoring

Gathering the Right Information for Informed Credit Decisions

• Identifying your customer and their legal status

• Essential information for credit decisions

• Effective methods for gathering necessary information

• Understanding and interpreting collected data

Interactive exercise: Discussing required customer information and collection methods

Understanding Financial Statements

• Interpreting balance sheets

• Analyzing profit and loss accounts

Practical exercise: Analyzing a balance sheet to assess a company’s financial status

Working with Balance Sheets and Profit & Loss Accounts

• Applying credit management principles without becoming an accountant

• Key financial ratios and their significance

• Scoring key ratios for credit decisions

• Setting credit limits and ratings

Practical exercise: Applying knowledge to assess a customer’s creditworthiness

Ongoing Risk Assessment

• Assessing risk in different industries

• Grading customers based on risk levels

• Differentiating between low, medium, and high-risk customers

In-Depth Accounts Analysis and Credit Scoring

• Main Concepts of Accounts

• Understanding accounting terminology

• Performance and financial status measures

• Working capital utilization

• Days cash cycle analysis

• Scoring key ratios

Getting Behind the Figures – Items Not Found on Financial Statements

• Analyzing cash flow statements

• Recognizing strengths and weaknesses

• Factors impacting accounts analysis

• Developing scorecards for credit decisions

• Assessing higher commercial risks

Interactive exercise: Working with financial statements and reporting findings

Understanding Why and How Businesses Fail

• Identifying warning signs

• Recognizing warning signs in everyday dealings

• Identifying warning signs from financial statements and customer visits

Interactive exercise: Group discussion on reasons for business failures and preventive

measures.