The collection of receivables is one of the most crucial things to do in any business simply because it is still cash that the business earned but have not yet gotten in their hands. Since it is still money, the business has to do all they can in order to collect it otherwise it will never reach their hands. Of course in order to make sure that all collections are made, there has to be a team that has received accounts receivable training who would be able to take on the task.
Now the one who would handle the training program would usually be a manager from the collections department. The manager would usually teach the students first how to classify receivables or credit sales. He will also teach the students how to read financial statements so that they will know how to trace the collectibles.
Now when it comes to the reading of financial statements, the main thing that the students will really have to know how to read would be the balance sheet because it is this that would contain the credit sales. Through the scanning of the balance sheet, one will be able to see an account title named accounts receivable. In there would be the total number of receivables.
Now the balance sheet will only show the account title and the amount but not the details. The details are usually found in a separate list created by the collections department that would be based on the journal entries that the accountants would make. Of course the student will be learning how to read the list and check who owes how much to the company.
After learning how to classify and read receivables, the next thing that one will learn would be how to run after debts. Now this would include making phone calls and sending emails regarding the payment of the debt. Now one will also be learning whether the debtor will be given a credit extension or not.
Now with regard to credit extension, there are actually ways to know whether a company can afford to give one or not. The first thing to assess would be the financial state of the company whether it can afford the extension or not. The next thing to do would be to assess the credit rating of a debtor. If he has a bad one, it is not advisable to give an extension because he might not pay even after the extension.
Of course one also must learn the process of documenting the collections that were made. Once a collection was made, he has to record it in his notebook so that there is proof. Of course he has to make sure that he backs it up with the necessary documents like invoices and such.
The next thing that he has to do would be to reconcile the collections in the records of the company. In other words, he has to make sure that a debt that has already been settled will show up in the records. That way, he can properly keep track of debts that have been paid and debts that have not.
Now the one who would handle the training program would usually be a manager from the collections department. The manager would usually teach the students first how to classify receivables or credit sales. He will also teach the students how to read financial statements so that they will know how to trace the collectibles.
Now when it comes to the reading of financial statements, the main thing that the students will really have to know how to read would be the balance sheet because it is this that would contain the credit sales. Through the scanning of the balance sheet, one will be able to see an account title named accounts receivable. In there would be the total number of receivables.
Now the balance sheet will only show the account title and the amount but not the details. The details are usually found in a separate list created by the collections department that would be based on the journal entries that the accountants would make. Of course the student will be learning how to read the list and check who owes how much to the company.
After learning how to classify and read receivables, the next thing that one will learn would be how to run after debts. Now this would include making phone calls and sending emails regarding the payment of the debt. Now one will also be learning whether the debtor will be given a credit extension or not.
Now with regard to credit extension, there are actually ways to know whether a company can afford to give one or not. The first thing to assess would be the financial state of the company whether it can afford the extension or not. The next thing to do would be to assess the credit rating of a debtor. If he has a bad one, it is not advisable to give an extension because he might not pay even after the extension.
Of course one also must learn the process of documenting the collections that were made. Once a collection was made, he has to record it in his notebook so that there is proof. Of course he has to make sure that he backs it up with the necessary documents like invoices and such.
The next thing that he has to do would be to reconcile the collections in the records of the company. In other words, he has to make sure that a debt that has already been settled will show up in the records. That way, he can properly keep track of debts that have been paid and debts that have not.
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