Debtors’ Management – Vital for Business Success
On the ESS Small Business’ website, we have a wide array of information (some free, some available for purchase) relating to debtors’ management.
The free material includes the debtors’ overview, looking at the various aspects of the management of debtors and suggestions on how to collect debts (Debtors’ Collection).
We also have a subscription service available, whereby you can subscribe for an SME Debtors’ Manual that you can review, edit as you require and then customise as yours so that you have a manual in your business to guide the persons who have the responsibility for debtors and covers items such as:
- opening an account
- approving an account
- PPSR function
- collection of debtors
- calculation of debtors’ days outstanding
- sending of statements to your customers
The manual also looks at some of the due diligence services combined with debtors’ management.
The SME Debtors’ Manual includes introduction on an effective debtors’ system, debtors’ management system and setting up for a debtor.
Setting up for a debtor is the initial application for a debtor to be able to open an account. At that stage, they’re not a debtor, they’re a prospective customer who has asked if they can purchase on a credit basis. How do you go about checking the bona fides of that would-be long-term customer?
Once the new customer has been approved, the next task is the drafting of the welcome letter to the new customer, which allows you to identify your terms of trade and the credit limit that the customer has been granted.
Evaluation of the PPSR issues is very important. Over $120M has been lost by Australian businesses in court cases since the PPSA commenced 4 years ago. The Debtors’ System Manual discusses the Terms of Trade and Retention of Title Agreements, both of which should be prepared by your commercial solicitor. There needs to be a discussion on whether you’re going to register a particular customer. Just bear in mind that you don’t need to register each invoice on the PPSR, you just need to register a customer. The registration lasts for a maximum of 7 years.
There are a lot of problems at present with liquidators issuing preferential payment claims. One way that you can avoid these types of claims is if you’ve registered that customer on the PPSR.
There are forms in the system to assist with the calculation of debtors’ days outstanding, comments on debtors collection systems, including digital debtors collection.
We’re linked to our business partner, IODM, which has an excellent system that utilises digital technology to assist in the management of debtors.
The SME Debtors’ Manual is available for you to personalise to suit your business so that your staff has a written system to guide them in this very important area of debtors’ management.
The SME Debtors’ Manual is available for $265 including GST.
As a preview of what’s included in the SME Debtors’ Manual, the following complimentary articles are available:
Find an Accountant/Adviser
If you would like to find an accountant who can offer the types of services mentioned in this edition, generally known as business advisory services, please utilise the Find an Accountant/Adviser directory within the ESS Small Business’ website. Please visit www.esssmallbusiness.com.au and click on “Find an Accountant/Adviser” menu tab. All you need to do is to type in your postcode and the system will then show you accountants in or near your postcode who offer a wider range of commercial services to small/medium enterprises.
ESS Small Business contains other free articles and articles for sale, prepared by approximately 20 other businesses, on a wide range of small/medium enterprise matters.
ESS Small Business also presents webinars, free of charge, covering a wide range of small business matters. These webinars are also recorded and are available for viewing.
We will be presenting a webinar, featuring “Improving Debtors’ Management”, which will be held on Thursday 21st April 2016 at 4pm AEST. Click here to register to attend, free of charge. To view our other upcoming and recorded webinars, click here.
Whilst you are on the ESS Small Business’ website, why not have a look at the offerings from a wide range of business people who are able to assist small/medium enterprises?
If you have any questions on the services that accountants can offer, please don’t hesitate to contact us.
Peter Towers
Managing Director