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Trade Debtors RMIT University

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					Financial Roadshow 2007

    Credit Management
          (August)
     By: John Cotterell
                  The Team
•     John Cotterell – Manager
•     Amarjit Kaur – ARG Liason/TPC’s
•     Chintha Ranwala – Student Accounts
•     Paul Hamilton – Trade Debtors
•     Lee Murphy – Trade Liason/Support
•     Varun Khanna – Student Accounts
•     TBC – DCA Accounts

RMIT University       Slide 2
                  Areas of Responsibility
•     Student Debtors (2)
•     Trade Debtors (1)
•     TPC & ARG Support (1)
•     DCA Accounts (1)
•     Investigations & Reports (1)




RMIT University             Slide 3
                   Student Debtors
• Contacts – Surname (A-L) – 51771
             Surname (M-Z) – 52231

                  Email- Studentaccounts@rmit.edu.au




RMIT University               Slide 4
                  Trade Debtors
• Contacts – Collections/Disputes – 51734
             Credit Checks/Reports – 52778

                  Email – Tradeaccounts@rmit.edu.au




RMIT University           Slide 5
                  ARG Liason/TPC’s
• Contacts – All Enquiries – 53649

         Email – Creditmanagement@rmit.edu.au




RMIT University                  Slide 6
                  DCA Accounts
• Contacts – All Enquiries – 52231

                  Email – DCAaccount@rmit.edu.au



External Agents – Dun & Bradstreet
                  Citibureau ( NCML)

* DCA – Debt Collection Agencies


RMIT University           Slide 7
    Functions of Credit Department
•     Assessment of Credit Risk – Good Credit processes will strive to accept all business, but they must continuously
      assess and monitor in place to control high risk customers.

•     Establishment of Credit Terms & Limits – Terms (Days) and Limits should take into account the risk. The Limits
      can not simply be the value of the invoice, post sales.

      Monitoring & Control of Debt – This includes ensuring;

       * Agreed Terms & Credit Limits are being adhered to       and appropriate – ( Annual Reviews to be put in place).

      * All High Risk Debtors are kept under tight control.
      * Major customers must also be watched carefully as they account for a high proportion of the ledger and therefore
      cashflow.

•     Collection of Payment – Collections to be made solely by the credit management department, in a manner that
      creates optimum cashflow whilst ensuring continuity of good business.




RMIT University                                        Slide 8
                                     Creating Invoices
•     To save time and possibly avoid frustrations , it always pays to check FD33 Display Credit
      Management before starting to create an invoice.




RMIT University                                 Slide 9
                  Credit Used




RMIT University     Slide 10
                  Credit Limit Confirmation




RMIT University            Slide 11
                  Account Blocked ( See Tick)




RMIT University             Slide 12
                  Check Notes (Double Click on Texts)




RMIT University                 Slide 13
                  How we can help?
This process of checking account status briefly prior to invoice raising will
   hopefully prevent invoices being half raised before matters surrounding
   credit limits come to light at your level. Then by bringing specific issues to
   our attention will assist Credit Management in assessing the credit limit and
   amending as appropriate as soon as possible.




RMIT University                      Slide 14
                            Credit Limits
•     Credit Limits across all segments are under review. In the policy currently
      under review it is our intent to set high fixed value credit limits for our non
      commercial customers. (I.E. Accounts starting 5*** & 6****).

•     This will hopefully allow freer and smoother invoicing within confirmed
      contractual arrangements.

•     A suggestion would be to give all 5** accounts a set credit limit of $50,000 (
      unless sighted contracts advise otherwise), and all 6**** accounts a set
      credit limit of $1,000,000 (unless sighted contracts advise otherwise).

•     Of course Credit Management will still , through a detailed and confirmed
      dunning process, monitor days overdue and act accordingly within revised
      policy


RMIT University                          Slide 15
                  Calculating a Credit Limit
Whilst checks still need to be made to confirm the correct credit limit for an
  account, a simple calculation to assist the Credit Department is to request
  twice the monthly invoice value.

This allows an invoice to be raised in the second month, whilst the one from the
   previous month still sits within terms or has recently fallen outside terms.

Of course if this went on into the 3rd month, the dunning process may well have
   blocked this account until payments or any issues have been resolved.

This more accurate guide will again make invoice raising quicker and smoother
   whilst the limit is accurate and customer remains within agreed terms.




RMIT University                     Slide 16
                  Disputing Invoices
• Moving forward departmental contacts are likely to be removed from
  invoices, to assist in prompter payment receipts and logging of
  disputes.

• The logic is that once an invoice is sent out , the first department
  that need to be aware of any payment/dispute is accounts
  receivable and the invoice will be redesigned to reflect that.
• Once this has been approved in design, a copy will be sent out for
  viewing.

• Prompt payment receipt and processing , and timely logging of
  disputes, will update accounts and block invoices so that the most
  up to date and accurate presentation of an account is made.


RMIT University                 Slide 17
• Once a dispute has been logged and invoice blocked, the dispute
  will immediately be passed out to school/portfolio for investigation.

• Any payment disputes will initially be investigated by the Credit
  Management department.




RMIT University                  Slide 18
                        Payments
• As mentioned with disputes, the design of the invoice is under
  review to advise of more accurate and timely payments.
• This will hopefully be achieved , by making the invoice clear in
  remittance details ( customer no.) , and also payment methods and
  addresses.

• The sending of cheques to other areas of the university needs to be
  discouraged, and the use of cash books is to be significantly
  decreased over the coming months. The removal of this and
  directing to automated areas, will allow credit card details to be
  processed and checked immediately.




RMIT University                Slide 19
                       Collections
• Whilst there may be frustration in payment delays, please do not
  contact customers directly over outstanding accounts. It may appear
  helpful, yet debt collection is now a legal minefield and by acting
  outside legislation and guidelines you may put yourself under severe
  risk of financial penalty.

• All staff are currently undergoing formal training re the ASIC Debtor
  Guidelines and National Privacy Act, and along with our established
  external agents, all proper steps will be made to recover outstanding
  debt.

• Feel free to contact me directly, if you have any concerns re the
  above.


RMIT University                 Slide 20

				
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