Credit Controls and Accounts    Receivable Management“Any fool can lend , but it takes a lot of skill to get it back”
IntroductionPlease give:• Your name• Your job & Company name• Your commercial experience• What specific expectations do yo...
Learning Objectives• The objectives of credit and accounts receivable  management• How credit and account receivable manag...
Learning Objectives Cont…• The commonly used terms of sale, including credit terms• How companies make customer credit dec...
Learning Objectives Cont…•   Learn how to calculate the following:•   Annualized cost of trade credit•    Days’ sales outs...
Receivables Cycle What   are receivables?•Receivables are sales made on credit basis.Why do we need receivables?        ...
The Customer to Cash ProcessCustomer  Credit Risk      Collections   Credit Debit Management       Management     Adjustme...
Credit Policy and CollectionsOrder    Order           Sale                            CashPlaced   Received               ...
Credit Terms or Payment Terms• It is the length of time a buyer has to repay the amount  of debt owed on an obligation. Th...
Collection Methods• Centralized / Decentralized collection system• Post – dated check• Pay Orders / Bank drafts• Bills of ...
Audit Program for Receivables and Revenue                    Substantive Procedures      Substantive Tests                ...
Flowchart of the Confirmation Process                                                    A      Develop Audit Objectives  ...
Thank You For Coming Today!            Facilitator: Antoine TabbakhTel: +961 1 385 825 / website: www.bsf-lb.com          ...
Upcoming SlideShare
Loading in...5
×

Effective Accounts Receivable Management and Credits Controls

5,416

Published on

Published in: Business, Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
5,416
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
206
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Effective Accounts Receivable Management and Credits Controls

  1. 1. Credit Controls and Accounts Receivable Management“Any fool can lend , but it takes a lot of skill to get it back”
  2. 2. IntroductionPlease give:• Your name• Your job & Company name• Your commercial experience• What specific expectations do you have?
  3. 3. Learning Objectives• The objectives of credit and accounts receivable management• How credit and account receivable management fit into corporate finance and treasury operations• How companies develop credit policies• How companies calculate the costs and benefits of credit policies• The forms of credit extension
  4. 4. Learning Objectives Cont…• The commonly used terms of sale, including credit terms• How companies make customer credit decisions• How companies measure and monitor accounts receivable• How companies finance accounts receivable• How the cash application process works• Auditing the Receivables Cycle.
  5. 5. Learning Objectives Cont…• Learn how to calculate the following:• Annualized cost of trade credit• Days’ sales outstanding (DSO)• An aging schedule
  6. 6. Receivables Cycle What are receivables?•Receivables are sales made on credit basis.Why do we need receivables? Cash Receivables OperatingUnderstanding Receivables Cycle•As a part of the operating cycle•Time lag b/w sales and Inventoryreceivables creates need for working capital
  7. 7. The Customer to Cash ProcessCustomer Credit Risk Collections Credit Debit Management Management AdjustmentsPO to Shipment Payment Forecasting & to invoice Processing Reporting Reconciliation Deductions & Cash Billing & Dispute Invoicing Management
  8. 8. Credit Policy and CollectionsOrder Order Sale CashPlaced Received Received Accounts Collection < Inventory > < Receivable > < Float > Time ==> Accounts Disbursement < Payable > < Float > Invoice Payment Cash Received Sent Paid
  9. 9. Credit Terms or Payment Terms• It is the length of time a buyer has to repay the amount of debt owed on an obligation. This includes: 1- The maximum time allowed for repayment. 2- Discount for cash or early payment 3- And the amount or rate of late payment penalty
  10. 10. Collection Methods• Centralized / Decentralized collection system• Post – dated check• Pay Orders / Bank drafts• Bills of Exchange• Lock – box System• Drop – box System• Factoring• Collection staff/ agents• Debt collector• Del Credere agent• Concentration banking
  11. 11. Audit Program for Receivables and Revenue Substantive Procedures Substantive Tests Audit ObjectivesObtain aged listing of receivables Clerical accuracyand reconcile to G/LObtain analyses of N/R andrelated interestInspect notes on hand and Existence, occurrence, and rightsconfirm those not on handConfirm receivables with debtors Existence, occurrence, and rights Valuation
  12. 12. Flowchart of the Confirmation Process A Develop Audit Objectives Prepare and Mail the RequestsChoose Appropriate Confirmation Form Send 2nd requests for positive confirmations Determine the timing and extent Perform alternative procedures For non-respondents Identify the information to be confirmed Resolve exceptions Document the procedures andSelect the accounts for confirmation results A
  13. 13. Thank You For Coming Today! Facilitator: Antoine TabbakhTel: +961 1 385 825 / website: www.bsf-lb.com Email: info@bsf-lb.com/BestSolutionFinance Company/bsf #bsfbeirut
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×