COURSE OVERVIEW

The aim of this course is to provide participants with practical sessions and tools to manage their accounts receivable and improve their cash and working capital.

What are the Credit Management Tools and Techniques? Credit Management is a wide-ranging general term, which covers the entire processes, systems, methods and actions that you use in your business in order to manage the Credit you provide to your clients/customers.

Without effective and operational credit management tools and processes in place, the chances are your business will run out of cash, and ultimately fail.

What is credit management process? Your Credit Management processes should involve at every stage of dealing with your clients/customers from the moment they are a prospective client/customer, by assessing the risk to your business, through to negotiating the terms & conditions, invoicing effectively, and ultimately Credit Control, and Debt Collection.

Each of these essential functions of your business will be dealt with and discussed in more detail, on separate fact sheets. What is the debt collection process? Debt collection is the process and practice of pursuing payments of debts owed by individuals or businesses.

This Zoe course will cover the fundamentals around Credit Management and Debt Collection, assess and ensure that you understand your risks, and that you effectively manage the credit you provide, which ultimately will keep your business running with a healthier cash flow.

Course Objectives

The objectives of this Credit Management and Debt Collection course are:

• Understand debtors and know how to communicate with them effectively
• Manage your company’s risks and minimize bad debts
• Use Credit evaluation and credit limit review
• Understanding and applying the credit assessment policy and its control mechanism
• Get Optimal resource utilization, increased cash conversion
• Reduced credit risk and excellent return on investment
• Practical and engaging collection and negotiation scenarios

TRAINING METHODOLOGY

This collaborative Credit Management and Debt Collection Course will comprise the following training methods:

• Lectures
• Seminars & Presentations
• Group Discussions
• Assignments
• Case Studies & Functional Exercises

ZOE Talent Solutions follows the approach of ‘Do-Review-Learn-Apply’.

Organisational Benefits

With professionals participating in this Credit Management and Debt Collection course, organisations will benefit in the following ways:

• Use some of the best methods and techniques when communicating with debtors
• Appreciate the relevance and importance of credit policy in defining the objectives, function and responsibilities of the credit department to get maximum profitability
• Understand the need of credit assessment due to selective risk-taking in the interests of increasing overall profitability
• Establish a Collection Policy that ensures recovery of debts and also provides follow up procedures in monitoring and collection of debts

Personal Benefits

Professionals undertaking this Credit Management and Debt Collection course will derive the following Personal Benefits:

• Recognise the importance of credit management and debt collection
• Help you know what processes should be in place to ensure it is a success
• How to make sure that your debt collection activities result in payment of the outstanding amounts, without damaging your client/customer relations
• Prepare and maintain reports and statistics
• Plan an effective debt collection program
• Increase your debt collection rate

WHO SHOULD ATTEND?

• Debt and Credit Controllers
• Debt Collection Managers
• Financial Agents
• Credit Assistants, Supervisors, Executives & Managers
• Finance, Accounts & Admin. Executives and Managers
• Executives to Senior Managers

COURSE OUTLINE

This Credit Management and Debt Collection Training course includes the following modules:

Module 1: Introduction to Credit Management

• What is Credit Management?
• Importance of Credit Management
• Credit Department’s Responsibility
• The 6 Cs of Credit

Module 2: Credit Risk Assessment

• Financial Factors Affecting Credit Decision (Financial Statements: What to Look for) Probability of Default, Exposure at Default, Loss given Default, Expected Loss
• Borrowing Need and Capacity Assessment
• Leverage and Coverage Ratios
• Liquidity, Profitability and Activity Ratios
• Cash Flow Analysis and Projections
• The Z Score
• Credit VaR

Module 3: Non-Financial Factors Affecting Credit Decision 

• Business Environment and Industry Status
• Company Vulnerability
• Management Integrity, Skill & Execution
• Exercises and Cases

Module 4: Mitigating Risk Assessment

• Setting the Credit Limit
• Review New Accounts
• Re-Evaluate Existing Account

Module 5: Loan Structuring

• Credit Enhancements and LTV limits
• Loan Covenants
• Loan Pricing and Negotiating
• Problem Loans and Restructuring
• Credit Derivatives (Credit Default Swap, Total Return Swap, Credit Spreads etc.)
• Exercises and Cases

Module 6: Collection Performance and Efficiency

• Aging of Accounts Receivable and Bad Debt Reserves Analysis
• Accounts Receivable Turnover and Days Sales Outstanding
• Collection Effectiveness Index
• Analysing Operating and Cash Cycles
• Improving Working Capital Health
• Bad Debt Collection
• Factoring
• Overdue Ratio Calculation
• Discount & Prepayments

Module 7: What-If Analysis and Decision Strategies for Credit Efficiency

• Scenario Manager
• Goal Seek
• Data Table (Sensitivity Analysis)
• Solver Technique
• Exercises and Cases