Accounts Receivable and Credit Policies
A significant portion of a company’s working capital is tied to Accounts Receivable (AR), creating potential liquidity risks.
- Course fee
- Contact us
- Duration
- 5 days
- Group rate
- Ask an advisor
Course overview
A significant portion of a company’s working capital is tied to Accounts Receivable (AR), creating potential liquidity risks. This course provides in-depth knowledge and practical skills to effectively manage AR processes, enabling organizations to optimize cash flow without compromising credit sales.
Training methodology
This program combines theoretical insights with hands-on practices, including role-playing exercises and participant presentations. Additionally, Microsoft Excel is introduced as a key tool for managing and analyzing accounts receivable.
Target competencies
- Efficient AR management
- Strategic credit policy development
- Advanced AR analysis techniques
- Optimizing collection strategies
- Streamlined billing processes
- Preparing AR aging reports
- Monetizing accounts receivable
- Using Excel for AR analysis
Course objectives
By the end of the course, participants will be able to:
- Develop and implement credit policies aligned with organizational goals.
- Apply best practices in billing to improve accuracy and efficiency.
- Establish effective collection strategies to minimize outstanding receivables.
- Collaborate with sales teams to balance credit risk and sales growth.
- Evaluate and optimize AR processes using industry best practices.
- Use advanced tools and techniques to monitor and enhance AR performance.
Course outline
- Responsibilities of the credit department
- Key factors influencing credit policies
- The five Cs of credit and non-financial considerations
- Components of an effective credit policy:
- Mission and objectives of the credit department
- Roles, responsibilities, and procedures
- Measuring performance and results
- Reviewing and re-evaluating accounts
- Financial statement analysis and ratio interpretation
- Establishing credit limits and fostering profitable customer relationships
- Streamlining billing for faster collections
- Preventing errors in billing processes
- Leveraging technology for efficiency
- The impact of operational accuracy on billing outcomes
- Best practices for effective billing
- The importance of cash collections
- Tips and techniques for faster collections
- Creating and implementing a collection policy
- Managing disputes and resolving conflicts
- Collection strategies and best practices
- Exploring AR factoring, pledging, and assignment
- Building strong relationships between sales and credit teams
- Maintaining credit sales while minimizing risk
- Sales team involvement in credit issuance and collection processes
- Enhancing the quality of AR
- AR aging and bad-debt reserves management
- Calculating:
- Bad-debt reserves
- Accounts receivable turnover
- Days Sales Outstanding (DSO)
- Best Possible Days Sales Outstanding (BPDSO)
- Collection Effectiveness Index (CEI)
- Operating and cash cycle analysis
- Managing AR using a portfolio strategy:
- Segmenting AR portfolios
- Developing targeted approaches for specific segments
- Implementing internal controls for AR processes
- AR’s role in monthly account closings
- Pros and cons of outsourcing AR functions
Morning and evening classes are available. CompuBase Training Center, Abu Dhabi.
