Controlling Customer Debt and Managing the Ledger
Small business owners:
"Don't Let Your Customers Run Your Business" is not just about debt collection. It is about proactively managing a debtor's ledger, controlling customer debt and getting customers to pay by due date. There is no point in making a sale if it is not paid.
My Experience to Deliver this Course
I am a business manager, qualified trainer and small business owner. My background has been in office administration and then business management for over years in 20 different industries. Cash flow control and cost management in addition to accounting, budgeting and debt collection has been by strengths. After initially delivering debt collection courses I designed this course to encompass accounts receivable, assessing a new customer for creditworthiness, debt collection, policies and procedures, training employees, customer negotiation skills, meetings for monitoring customer debt and evaluating office procedures.
What You Will Learn
Managing a Debtor's Ledger and Debt Collection Skills
Cost of Running a Ledger
Evaluating Office Procedures
Can your Business Afford to Give Credit
Setting up Policies and Procedures
Strategy to Reduce the Current Debt
Strategy to Manage the Ongoing Ledger
Step by step to advice to:
For Small Business Owners in Particular:
For Current and Future Bookkeeping and Accounts Receivable employees
I am sure you are like most people who go into business; you are doing it to make money, and you feel you need to give credit to make sales. Debt collecting cost you money. so let's give you a new strategy of running your business, so you can reduce that cost considerably and keep a good relationship your customer.
Introduction to what managing customer debt is about, and what is ahead in the course such as assessing the customer for creditworthiness, customer negotiation skills, and the difference between the current debt collection courses run by debt collection agencies and this course
This lecture discusses the benefits the student will get from the course in the knowledge of being able to save a business money, instigating a better procedures system and being control of the ledger. There is a list methods describing how these goals will be achieved.
In this lecture, reasons are listed why customers do not pay and discusses background information like the definitions of credit control and cash flow, why these criteria are important to a business and there is a case study to illustrate the consequences of cash flow mismanagement.
The cost in interest to the business are demonstrated with a spreadsheet showing step by step how the cost is calculated.
This lecture is a continuation of the previous lecture as it explains in detail how the interest in the previous lectures spreadsheet is calculated and why a business would find it a useful tool in their business as a way to project the incoming customer payments to assist in a cash flow forecast.
Various activities need to be done in order to manage the ledger such as assessing and setting up the customer, hold meetings and debt collection activities. These are discussed in detail. The cost of labor in collection activities is also explained.
The costs of writing off a sale and the consequences of that write off are discussed and also the amount of sales that are needed to be generated to break even. Spreadsheets are used to demonstrate these costs. The hidden costs are revealed. The lecture concludes with the consequences of customer debt in the general management of the business.
A list of office procedure inefficiencies and what students can do to asses and fix the problems. Lecture includes reference to and how to use the Debtor's Ledger Health Check Questionnaire so students can assess their own office procedures and policies Also a case study to illustrate the importance of everyone in the business being mindful of the policies of the business the consequences when things go wrong.
Introduction to the subject of how different business types give credit to their customers and how they will negotiate their terms of trade with their customers differently
Explanation of how various types of businesses such as service, trade, supply and repair negotiate terms of trade with their customer. Different issues are explained of what businesses need to be wary of in their quest to get sales over the risk of increasing customer debt.
Description of various types of credit methods re discussed such as cash, cash on delivery, payment on completion, monthly account and so on and issues affecting what credit a business will give a customer and what issues need to be considered.
Issues a business owner needs to consider regarding dealing with big corporations, sole operators and one off sales. Discussion and list of other issues that can determine a business's ability to carry customer debt
Introduction to Policies and Procedures, what they are, what they do for a business, why they are important and why a business needs them. A list of policies a business operation needs to successfully manage the debtor's ledger.
A explanation of what the Terms of Trade Policy is, what it does, why it is important to a business and what sort of statements should be included in it. A strategy of how to negotiate the terms of trade with a customer is included in this lecture to increase the confidence of business owners.
A explanation of what the Customer Credit Policy is, what it does, why it is important to a business and what sort of statements should be included in it. A case study illustrating how not to give credit and the consequences
A explanation of what the Complaints Policy is, what it does, why it is important to a business and what sort of statements should be included in it. Discussion abut the consumer laws which require business owners to have a complaints policy and how customers will react if a complaints is not resolved.
Explanation of what the Debtor's Ledger Management Policy is and what sort of statements should be included. A case study illustrating the importance of everyone in the business following the policies of the business. The importance of weekly meetings to monitor the customer debt.
Strategy to reduce the current customer debt. Step by step detailed instructions to bring the current customer ledger up to date and reduce the debt and advice on procedures
Lists all the activities needed to prepare the strategy to manage the ongoing ledger with step by step instructions and procedures
Explains all the steps required to assess a customer for creditworthiness. Details what forms are needed from the resources section of the course and also other activities such as the requirements setting up the new customer accounts, meetings and who should manage the ledger.
This lecture describes the activities of payments, complaints and reports. When the payments should be entered into the accounts software. What happens if a complaint is not resolved in a systematic way; and the consequences if a complaint has not been resolved. The detailed ageing report is also discussed and an example is displayed showing the necessary items to be included in the report.
For the customers who do not pay by due date, there is the overdue invoice strategy. This strategy includes reference to the set of collection letters included in the course resources and the installment payment plan of which there is a form to use in the resources.
Customer excuses. This lecture lists various common excuses and how to deal with them. There is also a list of other excuses in the resources of the course.
Meetings to monitor the customer debt are an integral part of the management of the debtor's ledger and this lecture advises who should be at the meetings and what should be included on the agenda. The resources has an agenda template for you to use and alter to your specifications.
There are six basic questions in the phone script. This lecture goes through the preparation before the phone call to the customer.
Cash flow problems, how to recognize a customer has cash flow problems and what you can do about it. This lecture also discusses delinquent debtors.
Conclusion plus the top 10 ways to control debtors and a list of targets for improving business practices
Zanette Phillips is an entrepreneur, business manager, qualified trainer and small business owner. She currently the owner and manager of Biz Skills business training based in Cairns, Queensland, Australia.
Her background has been in office administration and then business management for over 30 years covering over 20 different industries. Cash flow control, cost management in addition to accounting, budgeting and debt collection has been her strengths.
After completing a training qualification in 2003 she designed and delivered training courses in debt collection born out of concern for many small business owners trying to manage their cash flow. Zanette believed there had to be a more active proactive way of approaching the problem of customers not paying their accounts by due date and founded Biz Skills in 2012 to develop a course that would deal with the whole system encompassing accounts receivable, policies and procedures and evaluating office procedures plus good advice so the small business owner could learn strategies to be proactive and take control.
Her qualifications include a diploma of accounting and certificates in small business management and quality assurance management. Zanette has recently written a book 'Don't Let Your Customers Run Your Business' which is available on Amazon.