bad debt management

Finance Training Team Introduction to Debt Management Contents Page Introduction to Debt Management Debt Management Month End Aging 7 Buckets Report Running Unapplied Receipt Register Reviewing Receipts Payment Received Unapplied to Invoice Reversing a remitted and cleared receipt Other types of receipts Reapplying a receipt to a different invoice Finding and Viewing details of a customers account (incl disputes) Recovery timetable Printing Customer statements Printing and recording dunning letters Calling customer and recording details Printing collectors follow up report Keeping and viewing records of recovery attempts Still non payment …what next Appendix A: Customer Statement Appendix B: Dunning letter 1 Appendix C: Dunning letter 2 Quiz 3 5 6 10 11 12 15 17 19 21 23 24 25 27 30 31 33 34 35 36 37 -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 2 1. Introduction to Debt Management Credit control is a vital process that establishes controls both pre and post sales to ensure a timely recovery of income owed to the University. Many factors need to be taken into consideration before entering into a contract for the supply of goods or services to external customers. For detailed information on credit control pre sales please refer to the Financial Procedures Manual Chapter 8. Post sales, collecting customer debt is the responsibility of the department raising the invoice in the first instance; The Accounts Receivable and Cash Management team in the Finance Division can be contacted for detailed advice and assistance on specific debts. The University’s Financial Regulations state: ‘With the exception of Research Grant claims, departments are responsible for all aspects of credit control and for debt collection in respect of invoices issued to third parties. Heads of Department must ensure that proper procedures are in place to monitor all debts and follow up overdue accounts and must establish a provision for any debts considered irrecoverable. A debt is created whenever a credit sale is made, or any other obligation to pay money to the University arises’ Principles of Credit Control and Debt Management • • • • • To identify over due transactions Review customer account details Monitor activity Resolve overdue and disputed transaction Amend the customers account The Accounts Receivable module of UFS enables departments to manage and monitor debts efficiently and effectively. Additionally it provides a clear audit trail of all actions. It has the facilities to: • review the status of your customers’ accounts • produce reports listing outstanding debts for all your customers (whether overdue or not); • produce statements and letters; • record details of any recovery attempts made; • produce reports that detail what actions are required. In addition to this manual guiding you through procedures to follow on UFS, detailed information can be found in the Chapter 8 of the Financial Procedures Manual -External Trading and Credit Control. Alternatively, contact the Accounts Receivable Credit Control Helpdesk: Email: UFS_AR@admin.cam.ac.uk Telephone: (3) 32205 -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 3 Debt Management Process Overview MONTHLY identify all overdue transactions by running the AGING 7 BUCKET REPORT Determine which customers need to be followed up Double check that the payment hasn’t already been received Review Customer Accounts Pursue the debt using the recovery timetable and a suitable method NON PAYMENT Record Actions taken PART OR FULL PAYMENT Consider making a Bad Debt Provision If part payment action to be taken for the outstanding amount Receipt on system and update customer Consider cease trading with customer – Contact AR Write-off the debt Contact AR Credit Control for advice on the following: External debt recovery Court Action -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 4 2. Debt Management Month End It is a department’s responsibility for credit control and the debt management of their customers. To assist departments, below is an overview of the month end procedures that should be followed to ensure accounts are current and up to date. Further month end procedures can be found in the Income Collection Manual. Complete AR invoices, credit notes and batch receipts for the month (this is ongoing). Print and send AR invoices and customer statements. Run the ‘Incomplete Invoices’ report to identify any incomplete sales transactions and complete/cancel transactions as necessary. Run the ‘Unapplied Receipts Register’ to identify any receipts unapplied to specific invoices and match these receipts to the invoices report. Run the ‘Aging 7 Buckets by Accounts’ report to show invoices with no remittance, review – use for debt management. Pursue the debt, using the recovery timetable and a suitable method Record any actions taken Review and if necessary write-off bad debts (with the Head of Department approval). Banking Complete all receipt batches for cash and cheques received on or before the last day of the month. Run the ‘Receipt Register’ report for cash receipt batches. Arrange for the banking of all monies received up to the last day of the month (including vending machines, photocopier sales, pay phones, key deposits). Claim any BACS receipts/bank transfers from the weekly Finance Division spreadsheet. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 5 3. Running the Aging 7 Buckets Report As debts become overdue the risk of non-settlement becomes significantly greater. In order to ensure best practise once credit has been extended for goods and services provided and the customer has been billed we recommend that you run this report on a monthly basis. This report shows all your Sales Invoices for which payment has not been received. It lists the invoices and groups the amounts by the period of time that they have been overdue. These time periods are known as “buckets” and the seven time periods analysed in this report are: Current 1-30 days past due 31-60 days past due 61- 90 days past due 91 – 180 days past due 181- 360 days past due 361 + days past due It will give you a total figure of the amount outstanding per customer and an overall total for all your departments’ external debtors. The report should be run each month once the AR module has been closed as part of your Department’s Month End Procedures UFS Responsibility: AR User / Supervisor Navigate: Requests >Run o Once you have navigated via the above path click on ‘OK’ to a single request o This will take you through to the Submit Request screen o In the Name field, click on the list of values and select ‘Aging -7 Buckets-By Account Report’ o The following parameters should be entered: -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 6 Complete the parameters as shown. As of date will be the date your running the report o Once you have selected your parameters click on OK and this will take you to the next screen o It maybe worth viewing the report on the screen first, before you print it in case it is lengthy. To do this click on Option and then amend copies to 0 o Click on Submit. o A screen similar to below will display -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 7 o The screen will not automatically confirm that the report has completed, so click on Refresh Data every so often to update the status of the report. o Once the report has completed click on View Output and your print will be displayed on screen. o To print the report, close your report view and return to the above screen. o In the toolbar click on Tools then select Reprint. Ensure you have the correct printer set up and click on Ok. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 8 Aging 7 Buckets Report Action points Determine which customers/specific invoices need action or further follow up. Maybe beneficial to look at the oldest debt in relation to the amount first All outstanding over due transactions should be investigated and followed up with either o o o Statements Phone Calls Dunning Letters From this report it may become apparent that Customer has already paid their outstanding debt: o Receipt has been applied to the customer but not the invoice, leaving the value unapplied Receipt has been entered on CUFS as a miscellaneous receipt directly to an accounting code and not to the invoice Receipt has been applied to the wrong customer or to the wrong invoice Carry out a review by running the Unapplied Receipt Report and review the receipt on the system Customer may have paid by BACS so review the unallocated BACS spreadsheet sent out from Central Finance each week and claim payment o o o o -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 9 4. Running the Unapplied Receipt Register Report After reviewing the Aging 7 Buckets report you may be aware a payment has been received and processed on CUFS but not applied to the invoice. To establish these payments you need to run this report. It will list receipts showing against a customer’s account, but have not yet been applied to a specific transaction (Sales Invoice). Receipt Batch status will be OPEN when investigated but should be CLOSED wherever possible. The Batch will close once all of the Receipts have been applied within the batch. Responsibility: Navigate: AR User/ Supervisor Requests > Run o Click Ok to single request and in the name field click on the list of values and select Unapplied Receipt Register Report The following parameters should be selected then click on OK. o o Again, you may wish to view this report on-line before you print it. Once you have reviewed the report take the appropriate action (refer to Payment Received unapplied to invoice, Reversing a receipt and Other types of receipts). -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 10 5. Reviewing Receipts You can view your departments customer receipts on the system. Responsibility: Navigate to: AR User / Supervisor Receipts Receipt Batches o o A new receipt batch screen will display To search for a receipt click on the torch icon so that a find screen is displayed In the Batch Number field type in the batch number that you wish to view and then click on find. A Receipt Batch screen will display. o o o To review click on Receipts and then click on open -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 11 6. Payment Received - Unapplied to the Invoice There may be occasions when a receipt has been loaded on the system that was not applied to the invoice: • • • • Receipt has been applied to the customer but not the invoice Receipt has been entered on CUFS as a miscellaneous receipt in error (follow guidance notes on how to reverse a receipt and then follow guidance on entering a receipt) Receipt has been applied to the wrong customer or to wrong invoice (follow guidance notes on how to reverse a receipt and then follow guidance on entering a receipt) Payment received by BACS and not yet claimed (follow guidance notes on Other Types of Receipts) It is important to tie the receipt to the original invoice so that you can confirm that the customer has paid their invoice. Receipt applied to Customer but not the Invoice o Once you have found your receipt (refer to guidance ‘Reviewing Receipts’) a screen similar to below will be displayed. o The screen will show that your control and actual totals match but on the right hand side the amount of the receipt is showing as Unapplied. Click on Receipts and this will take you through to the receipt screen. Make sure the receipt you wish to look at is highlighted then click on Open. 12 o o -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 o In the example above you will see that receipt has not been matched to the invoice as the Trans Number field is blank. To apply the receipt either simply type the invoice number into the Trans Number field, or click on the list of values in Trans Number field and select your customers invoice Once the invoice number is in the Trans Number field click on Applications and the following screen will display. o o Click the Apply box and the Invoice number will default in the Apply To and the amount of the receipt will default in the Amount Applied field. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 13 o Save your work and close out of this screen so you are back to the Receipt Batch screen o The amount of your receipt should be now showing in the Applied field as above and the status will be closed -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 14 7. Reversing a “Remitted” and “Cleared” Receipt If you have applied a receipt to the wrong invoice, the wrong customer or the wrong amount you will need to reverse it and then re-enter it. Only reverse receipts when the status field reads ‘Remitted’ UFS Responsibility: AR User / Supervisor Navigate: Receipts Batches Reversing a Remitted Receipt Step 1: Retrieve the Receipt to Be Reversed From the Receipt summary window, run a query to locate the particular receipt to be reversed. For example: • View Query by Example Enter OR View Find. Step 2: Reverse the Receipt a) b) c) Category: select the ‘Reverse Payment’ option from the list of values Reason: select Payment Reversal from the list of values Comment: This is a free text field to outline any specific reasons for the reversal. Click on the Reverse button. d) -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 15 Reversing a ‘Cleared’ Receipt A receipt can be reversed if the STATUS box is marked ‘remitted’ by following the normal process. However, if the receipt is marked ‘cleared’ it must not be reversed without further action from Accounts Receivable first. The reason being, that the receipt has already been reconciled to an entry on the bank statement. Status Field -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 16 8. Other Types of Receipts BACS Receipts Once a week Central Finance will send to all Key Contacts, via e-mail, a spreadsheet listing all the BACS receipts received into the Sterling Bank Account, USD Bank Account and the Euro Bank Account, that have not been reconciled (matched) to a receipt on UFS. The information listed includes: • • • The Date the monies were received onto the bank statement The Amount of the receipt Any other information provided by the Customer when paying via BACS If you find any receipts on the spreadsheet that relate to your department, then please enter a Receipt onto the system. NB: It is the responsibility of the DEPARTMENT, to enter BACS receipts onto UFS. 1. Enter a Receipt Batch in the normal way, using the same naming conventions outlined in the previous section. Change Batch Source 2. However change the Batch Source to “BACS/ Standing Orders” -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 17 3. When you have entered your BACS receipt(s) onto the system, please send an e-mail to UFS_CM@ADMIN.CAM.AC.UK indicating the following details: a) b) c) d) Bank Statement Date (As per the spreadsheet) Amount (As per the spreadsheet) Your Batch Number and Receipt Number The line number from the spreadsheet This information then allows the Accounts Receivable Team to reconcile your receipt with the payment on the bank statement. If you have any queries or problems then please e-mail the above address. Multiple departments receipts All receipts (invoice and non-invoice related) that are relevant to more than one department should be entered as normal onto the system. However; only claim the proportion of the payment that is for your own department (as per the remittance advice with the cheque); and then forward the remittance advice and cheque onto the AR Helpdesk via the UMS, who will then arrange for the remainder to be claimed. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 18 9. Reapplying a Receipt to a Different Invoice If you realise that you have applied a receipt to the wrong invoice you can reapply it. However, you cannot reapply a receipt that you have already reversed. In this case you would have to enter a brand new receipt for it. UFS Responsibility: AR User / Supervisor Navigate: Receipts Batches Step 1 - Querying the Receipt to be Reapplied Navigate to the Applications window. Retrieve the receipt to be reapplied by going into the View menu, and selecting Find. a) Enter criteria to restrict the search and click Find b) The system will display all receipts that meet the query criteria and their applied, unapplied, and on-account amounts. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 19 Step 2 - Unapplying the Previous Applications Unapply previous applications in the Applications window by clicking on the small Apply box on the left-hand side of the row. Step 3 -Reapplying the Receipt Click onto the next spare row, tick the Apply box on this row and select from the list of values the Transaction Number (invoice) that you want to reapply this receipt to and save. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 20 10. Finding & Viewing Details of a Customer’s Account Review details of the status of a customer’s account, including transactions and account balances. If a customer is in dispute with an invoice this must be inputted within Account Details UFS Responsibility: AR User / Supervisor Navigate: • Collections Account Details The following screen will display, enter the criteria to query your customer accounts you wish to view and click on find • The following screen will be displayed. You can access a large amount of information on your customer against each transaction. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 21 • To log a dispute click in the relevant invoice Number field and scroll to the right. There are two fields to complete ‘Disputed Amount’ and the date. Once you have inputted this information save your work then close back to the screen above and click on disputes to display the record. By logging the dispute here it will then pull the information through to the original invoice. If you recalled the original invoice and clicked on the More tab you will see the amount of the dispute and the date. Please refer to page 27 for further notes on logging disputes following a phone call Dunning History: Will display details of any dunning letter sent to the customer Dispute History: will show any disputes Call: You can log details of a call and outcome relating to the customer you searched on Adjust: do not use Transaction Overview: provides an overview Balances: shows details of original transaction, credits, receipts, adjustments, discounts and balance, tax, freight charges Details: Displays the original invoice Activities: shows related receipts • • • • • • • • If you have logged a dispute then ensure you run of the Disputed Invoice Report on a regular basis For further detailed information on a customers account please refer to page 31, Keeping and Viewing records of recovery attempts . -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 22 11. Recovery Timetable Below is an extract from Chapter 8 of the Financial Procedures Manual. It shows the actions on invoices which are in debt, from Current to 61+ days past due. Debt recovery should be carried out in sequence as per the timetable. Whenever you carry out one of the actions you must ensure detailed records are kept. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 23 12. Printing Customer Statement – Stage 1 of the Recovery Timetable In order for debt recovery to be successful it must be proactive, persistent, polite and professional. Sending a statement alone is not an adequate form of debt recovery. Departments should be sending out monthly statements to customer. (Appendix A) UFS Responsibility: AR User/Supervisor Navigate to: Print Statements 1. Once navigated via above the following screen will appear. 2. Complete the following fields: • • • • • • Option: select Print a Draft Statement for a Customer Bucket: click on the list of values and statement will default Customer Name: select from the list of values Customer Number: will default in one name as been selected. You can type in customer number and name will default in Cycle: click on list of values and Standard will default in As of Date: select the date you want the statement to cover up to 3. Click on Options to check the correct printer and copies, before you click on Submit. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 24 13. Printing and Recording Dunning Letters Stages 2 and 5 of the Recovery Timetable Dunning letters are payment reminder letters to external customers and there are two letters available on CUFS • • Dunning Letter 1: A basic reminder if the invoice is between 1-13 days overdue. (Appendix B) Dunning Letter 2: A more formally worded reminder if the invoice is between 30-60days over due (Appendix C) A department may devise its own dunning letter to assist in making the debt recovery process more personalised. If bespoke dunning letters are sent to the customer manual notes such as date, type of letter sent must be made on CUFS. CARE! Dunning Letters will only be printed if the customer was set up correctly UFS Responsibility: AR User / Supervisor Navigate: • • Click on OK to the single request In the name field click on the list of values and select Dunning Letter Generate Print Dunning Letters • Complete the following fields: • • Order by: Customer Dunning as of date: Information defaults in 25 -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 • • • • • • • • Letter Set Low: External Standard Letter Set High: External Standard Customer Low: Select customer Customer High: Will default in with the same customer name as in the low field Collector Low: Select your department code Collector High: Will default in with your department code Dunning Method: Defaults in as Days Overdue Single Staged Letter: Defaults in as No • • • • • You can choose to print letters for all customers within your department by leaving the customer low and high fields blank. Once relevant field complete click on OK. Check your printer options, submit in the normal way and send to customer. Once the letter has been printed it will produce a record within Customers, Customer Accounts. Refer to notes on Keeping Records of Written Recovery Attempts. The system will automatically pick up which dunning letter needs to be sent eg Dunning Letter 1 already sent, if you followed the process above again it will automatically print out Dunning Letter 2. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 26 14. Calling the Customer and Recording the Details (including disputes) Stages 3 and 4 of the Recovery Timetable Where possible chasing the customer by phone is easily the most effective collection method as it offers the opportunity to clarify the situation, resolves any disputes promptly and build a relationship with the debtor. Remember successful debt recovery is being polite and professional. Follow these procedures for logging a dispute following a call and also refer to page 21 for information on disputes. When contacting the customer you must keep a full record of the actions and record them in CUFS: • • • • Date and time of call Contacts full name and whether they can authorise the payment Reason for non payment Outcome of the conversation UFS Responsibility: AR User / Supervisor Navigate: 1. Collections Customer Calls Once you have navigated via the above the following screen will display 2. Default collector may automatically appear. If not click on the LOV and select Default Collector. Your department may have set up Collectors if so select the correct one from the LOV. For further information on Collectors refer to the following link http://ufs.admin.cam.ac.uk/reference/upgrade/#debt where you will find a reference guide on setting up and using collectors 3. In the Trans Num field select the invoice the call relates to and in the Customer section select your customer name and the number location and address will default in -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 27 4. In the contact Tab complete the name, and contact details of the person you spoke with as per example below. • Click in the Response tab and the following screen will display: • • • Response: Select from the list of values Outcome: Select from the list of values Notes: Could include details of when cheque was sent, cheque number and any other relevant information. This information will appear on the Collectors Follow Up Report -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 28 • • • • • • Follow Up Action: Select from the list of values. A report can be produced to show all customers that require a follow up (refer to section on ‘Collectors Follow Up Report’) Date: Input a date when you would like to carry out the follow up Complete: Select this once the cheque has been received so that it no longer appears on your Collectors Follow Up Report’ You have the option on the screen to complete the ‘Promise’ section Save your work and a Call ID number will appear in the top left hand box Click on Topics. On the Main screen ensure the Invoice number has pulled through otherwise select it from the List of Values. Complete the remaining fields then click on the Notes and input notes regarding the call and response. All the information you input here as well will pull through onto the Collectors Follow Up Report. Save your work You can view any correspondence made by following the procedures on ‘Keeping and viewing record of Written Recovery Attempts’ • • If you have logged a dispute then ensure you run of the Disputed Invoice Report on a regular basis -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 29 15. Printing the Collectors Follow Up Report Once you have logged a call and follow up is required we recommend you run this report on a weekly basis to assist with the recovery of debt. UFS Responsibility: AR User / Supervisor Navigate: Requests Run 1. 2. 3. Click OK to a single request In the name field select ‘Collectors Follow Up Report’ In the parameters fields input ‘Default Collector’ unless your department has set up Collectors in which case select the relevant collector using the list of values in Collector Name low and high. For the Follow Up Date fields select the date parameters. 4. 5. Click on OK Check your printer options are set up correctly. You may wish to run zero copies incase there are a few pages and then print it. The report will show you the last time you called the customer, relevant notes, and what the customer response was last time you called and what follow up is required For guidance on what a Collector is, how to set one up and also how to use them please refer to the following link http://ufs.admin.cam.ac.uk/reference/upgrade/#debt -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 30 16. Keeping & Viewing Records of Recovery Attempts If a bespoke dunning letter is sent then a comment must be added to the notes screen of the relevant transaction. When you produce a standard Dunning letter, Statement or log a call on CUFS a record of this correspondence will be produced automatically in Collections, Customer Accounts. You can also access this via Collections, Account Details UFS Responsibility: AR User / Supervisor Navigate: Collections Customer Accounts • • Find your customer by either searching for the Customer name or inputting the Customer number and then click on find as per screen below An example of the screen displayed is below • From this screen you can view the following: o o o o o o Customer: takes you into the customer database Account Overview: displays customer transactions Call: to view detailed call information Aging: Shows invoices due and age of debt Account details: More detailed individual transaction information (log a dispute here) Correspondence: the following screen will display -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 31 o The calls screen shows information relating to the call but for detailed information click on the Call button. Then use the up and down arrows to view all the calls logged. You can also view details by clicking on Topics Review when statements or dunning letters have been sent by either clicking on Statements or Dunning Letters tabs Account Details will take you through to the screen that displays all the transactions loaded for that customer. o o -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 32 17. Still Non payment …. What next? If after all possible recovery approaches have been completed, the debt is still outstanding then there are various options available to departments. Interest: If an invoice becomes 60 days old you may advise the customer that interest will be charged if payment not received within x number of days eg 14. Care many factors need to be taken into consideration. Payment Plans: This should not be agreed by departments at the time of billing. Any proposals from the customer must be made in writing and should not be agreed or disagreed with until further investigation and consultation with the Accounts Receivable team in the Finance Division Legal Recovery: Before departments go down this route it is vital that every effort has been made with the customer to collect the debt eg calls, letters, all financial procedures and regulations have been adhered to and evidence can be provided of recovery attempts. You must contact the AR team to receive further information on the costs, feasibility, process and documentation required. The department must bear the costs of any legal action they take. If is it suitable for pursuing in the Courts then all required documentation must be authorised by the Head of Department and sent to Legal Services. Formal consent must then be obtained from the Registrary in accordance with financial regulations Bad Debt Provision: All invoices that are 60+ days overdue will have a bad debt provision posted against them to account for the risk of non settlement. The information is transferred into the General Ledger module at the end of the month once AR module has closed. The value of the bad debt is determined by the age and the balance due. • • • 60-182 days overdue: 25% of the balance due 183-364 days overdue: 50% of the balance due 365+ days overdue: 100% of the balance due Account Analysis Report can be run within GL responsibility using transaction code FJNA (Bad Debt Provision code) Writing off Debts: If after all reasonable recovery attempts have been taken and the debt is still overdue then the invoice can be written off. Information such as invoice number, balance due and reason for the write off must be sent to the AR team and in return a form will be sent to the department which must be signed by the Head of Department. The form then needs to be returned back to the AR team for the adjustments to be made on CUFS. Cease Trading: Care, refer to AR team for guidance. For more detailed guidance on any of the above please refer to sections 5.7-5.10, Chapter 8 of the Financial Procedures Manual or the Accounts Receivable team. -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 33 Appendix A: Example of a Customer Statement -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 34 Appendix B: Dunning Letter 1 University of Cambridge Finance Division The Old Schools, Trinity Lane Cambridge Cambridgeshire CB2 lTS United Kingdom ADDENBROOKES HOSPITAL NHS TRUST Finance Department ADDENBROOKE'S Box 130 United Kingdom Date: 18-FEB-2007 Dear Sir/Madam, I write with regard to the invoice(s) detailed below, which, according to our records, appear to be outstanding. Invoice Number --------8XXX5 8XXX0 Invoice Date -------14-JAN-07 31-JAN-07 Days Late ----5 -12 Invoice Amount Balance Due (GBP) (GBP) ---------------------101.99 101.99 25.85 25.85 Total 127.84 Due Date -------13-FEB-07 02-MAR-07 Please arrange for payment to be made within the next 7 days. If payment has been made within the last 5 days, please disregard this reminder. Should you have any unresolved problems concerning your account or require any further details, please do not hesitate to contact me immediately. I look forward to hearing from you. Yours faithfully Department of XX -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 35 Appendix C: Dunning Letter 2 University of Cambridge Finance Division The Old Schools, Trinity Lane Cambridge Cambridgeshire CB2 lTS United Kingdom ADDENBROOKES HOSPITAL NHS TRUST Finance Department ADDENBROOKE'S Box 130 United Kingdom Date: 25-FEB-2007 Dear Sir/Madam, It would appear from our records that despite previous correspondence, the account detailed below still remains unpaid. Payment should be sent immediately to the above address. Invoice Invoice Number Date ---------------8XXX5 14-JAN-07 8XXX0 31-JAN-07 Due Date -------13-FEB-07 02-MAR-07 Days Late ----- --5 -12 Invoice Amount (GBP) ---------101.99 25.85 Balance Due (GBP) -----------101.99 25.85 127.84 Total Should there be any issues relating to this account that are causing delay in payment, I would appreciate your call to this office urgently, so that I can help to resolve the problem. Failure to reply immediately with either your query or remittance will lead to your account being forwarded to our debt management section [and may result in interest being charged if payment continues to be outstanding.] Yours faithfully Department of XX -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 36 Debt Management Quiz 1. What report should you run at the end of every month once the Accounts Receivable module has closed? 2. What does this report show and how will you use it? 3. What are the 7 buckets of time? 4. Name as many of the different recovery methods and when you would use them. 5. Which tool is available on CUFS that is not an adequate form of debt recovery? 6. Where would you go to log a customers call and response? 7. What report would you run that detailed actions required after a call has been made? -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 37 8. If after all possible methods of debt recovery have been exhausted what options are available for you? List as many as possible. 9. How old must a debt be before we may start charging them interest? 10. Who does Legal need to get formal consent from should they pursue the debt in the Courts? -------------------------------------------------------------------------------------------------------------------------Finance Training Version 1.8 38