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- 献给做Credit and Collection相关工作的同学们
In most companies, outflows of cash are often relatively well controlled, but cash inflows such as collection of AR tend to be more difficult to control.
Credit Policy
Credit policy can be used positively, as a strategic tool. There are three steps to be taken in formulating a credit policy.
1) Objective of company: in areas of sales, profits, marketing strategy, and product development must be determined and integrated with the objectives of the credit function.
2) Assess the internal and external influences. Some of the influencing factors would be industry conditions, competitive influences, and the company's capital and financial condition.
3) Tactics, which involves deciding what course of action will result in the achievement of the goals within the constraints of the industry conditions and general economic factors.
In most companies, the responsibilities for establishing the parameters of a credit and collection policy rest with the CFO. The responsiblity
for administering the policy will rest with the Credit Manager.
Extending Credit
The extension of credit will be guided by several factors, including amount an frequency of orders, industry conditions and external factors in such areas as marketing strategies.
The credit information to be collected, in addtional to the credit application, may include company sales personnel, interviews with customers by telephone or in person, banks and other financial institutions, trade references, public records, and credit agencies, such as Dun & Bradstreet.
The analysis followed the credit investigation will generally include these areas:
- organization of business
- length of time in business
- history of business
- operation of business
- financial information
- payment history
- banking sources and relationship
- industry and economic conditions
Credit Information
a) Bank references: checking bank references is common practice in Canada. The two means of obtaining banking references information are to use company's own bank or to deal directly with the perspective customer's bank. When banking sources are checked, the information requested should consist of all or part of the following:
- how long the bank has had the account
- borrowing or non-borrowing account
- security on loans
- fluctuations in loans
- fluctuations in cash balances
b) Credit agencies: reports from credit agencies can be useful source of information. In Canada, reports are available from D&B Canada (www.dnb.ca),
Equifax Canada Inc. (www.eduifax.com/EFX_Canada) and Canadian Credit Reporting Ltd. (www.canadiancredit.com). All agencies provide payment history for
various suppliers, in addition to financial information, and other useful information such as claims, banking information and existing credit granted.
The credit agencies also provide a proprietary credit score to rate creditworthiness of the account.
c) Public record and corporate information: the credit investigation should also include the means to check sources of corporate information. A great
deal of information is in the public records. Writs, judgements, real estate transactions, registered debt, financing statements and mortgages are all available.
Collection Practices
The collection effort starts when the account is opened. With large new accounts, a call should be made five to ten days before the account is due
to "welcome" the customer and ensure that the customer received the invoice.
Properly training the collection staff to make effective calls and recognize danger signals. Most experienced collectors can sense when a customer is
not going to pay. Collection staff can create script for a telephone call requires planning an objective and prepared response for whatever the customer/debtor answers.
Now, list of the common reasons why the bill hasn't been paid: no money, no cheques, can't collect own receivables, computer is broken, sales are
down, and I'm expecting a big cheque next week. The professional credit department will have researched all of the common excuses and have prepared
rebuttals. It is necessary to test the intentions of the customer and be alert to danger signals. The professional collector will, at the end of the call, either have a promise of payment, a payment plan or the collector
should proceed to the next step in the policy, whether it is collection or a lawsuit.
Collection Agencies
The use of collection agencies is common in Canada. Agencies range in size from small local firms to large national/international agencies who can
collect amounts around the world. All agencies operate on the same basis, charging a fee on amount collected.
Court Action
Winning a lawsuit does not automatically result in payment of the debt. If the customer/ debtor has little to no means to satisfy the obligation, it may be years before the claims can be settled. So, do some homework
before bringing a suit. Does the debtor have assets or means to pay? Is the business a proprietorship or partnership, so that the personal assets can be attached?
Small Claims Courts
Small Claims Courts are a useful avenue to collect smaller amount. In most jurisdiction, the courts are "user friendly" and the use of lawyers is discouraged.
Maximum amounts collectable in small claims courts in Canada
Alberta $4,000
BC $10,000
Ontario $6,000
Quebec $3,000更多精彩文章及讨论，请光临枫下论坛 rolia.net
- 献给做Credit and Collection相关工作的同学们
In most companies, outflows of cash are often relatively well controlled, but cash inflows such as collection of AR tend to be more difficult to control.
Credit Policy
Credit policy can be used positively, as a strategic tool. There are three steps to be taken in formulating a credit policy.
1) Objective of company: in areas of sales, profits, marketing strategy, and product development must be determined and integrated with the objectives of the credit function.
2) Assess the internal and external influences. Some of the influencing factors would be industry conditions, competitive influences, and the company's capital and financial condition.
3) Tactics, which involves deciding what course of action will result in the achievement of the goals within the constraints of the industry conditions and general economic factors.
In most companies, the responsibilities for establishing the parameters of a credit and collection policy rest with the CFO. The responsiblity
for administering the policy will rest with the Credit Manager.
Extending Credit
The extension of credit will be guided by several factors, including amount an frequency of orders, industry conditions and external factors in such areas as marketing strategies.
The credit information to be collected, in addtional to the credit application, may include company sales personnel, interviews with customers by telephone or in person, banks and other financial institutions, trade references, public records, and credit agencies, such as Dun & Bradstreet.
The analysis followed the credit investigation will generally include these areas:
- organization of business
- length of time in business
- history of business
- operation of business
- financial information
- payment history
- banking sources and relationship
- industry and economic conditions
Credit Information
a) Bank references: checking bank references is common practice in Canada. The two means of obtaining banking references information are to use company's own bank or to deal directly with the perspective customer's bank. When banking sources are checked, the information requested should consist of all or part of the following:
- how long the bank has had the account
- borrowing or non-borrowing account
- security on loans
- fluctuations in loans
- fluctuations in cash balances
b) Credit agencies: reports from credit agencies can be useful source of information. In Canada, reports are available from D&B Canada (www.dnb.ca),
Equifax Canada Inc. (www.eduifax.com/EFX_Canada) and Canadian Credit Reporting Ltd. (www.canadiancredit.com). All agencies provide payment history for
various suppliers, in addition to financial information, and other useful information such as claims, banking information and existing credit granted.
The credit agencies also provide a proprietary credit score to rate creditworthiness of the account.
c) Public record and corporate information: the credit investigation should also include the means to check sources of corporate information. A great
deal of information is in the public records. Writs, judgements, real estate transactions, registered debt, financing statements and mortgages are all available.
Collection Practices
The collection effort starts when the account is opened. With large new accounts, a call should be made five to ten days before the account is due
to "welcome" the customer and ensure that the customer received the invoice.
Properly training the collection staff to make effective calls and recognize danger signals. Most experienced collectors can sense when a customer is
not going to pay. Collection staff can create script for a telephone call requires planning an objective and prepared response for whatever the customer/debtor answers.
Now, list of the common reasons why the bill hasn't been paid: no money, no cheques, can't collect own receivables, computer is broken, sales are
down, and I'm expecting a big cheque next week. The professional credit department will have researched all of the common excuses and have prepared
rebuttals. It is necessary to test the intentions of the customer and be alert to danger signals. The professional collector will, at the end of the call, either have a promise of payment, a payment plan or the collector
should proceed to the next step in the policy, whether it is collection or a lawsuit.
Collection Agencies
The use of collection agencies is common in Canada. Agencies range in size from small local firms to large national/international agencies who can
collect amounts around the world. All agencies operate on the same basis, charging a fee on amount collected.
Court Action
Winning a lawsuit does not automatically result in payment of the debt. If the customer/ debtor has little to no means to satisfy the obligation, it may be years before the claims can be settled. So, do some homework
before bringing a suit. Does the debtor have assets or means to pay? Is the business a proprietorship or partnership, so that the personal assets can be attached?
Small Claims Courts
Small Claims Courts are a useful avenue to collect smaller amount. In most jurisdiction, the courts are "user friendly" and the use of lawyers is discouraged.
Maximum amounts collectable in small claims courts in Canada
Alberta $4,000
BC $10,000
Ontario $6,000
Quebec $3,000更多精彩文章及讨论，请光临枫下论坛 rolia.net