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Collections and Repayments

1. Collection is the process of recovering cash owed by customers through invoices. There are various forces involved in the collection process including salespeople, house collectors, attorneys, collection agencies, and the government. 2. When evaluating collectors, attributes like integrity, diligence, initiative, perseverance, grooming, knowledge, and time management are important. For attorneys, their education, experience, personality, character and client references should be considered. 3. Delinquent accounts can disrupt business operations, reduce profits, slow growth, and potentially cause failure. There are various types of debtors including those who pay on time, occasional late payers, habitual late payers, and those with changed circumstances.

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90 views12 pages

Collections and Repayments

1. Collection is the process of recovering cash owed by customers through invoices. There are various forces involved in the collection process including salespeople, house collectors, attorneys, collection agencies, and the government. 2. When evaluating collectors, attributes like integrity, diligence, initiative, perseverance, grooming, knowledge, and time management are important. For attorneys, their education, experience, personality, character and client references should be considered. 3. Delinquent accounts can disrupt business operations, reduce profits, slow growth, and potentially cause failure. There are various types of debtors including those who pay on time, occasional late payers, habitual late payers, and those with changed circumstances.

Uploaded by

coleen
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CHAPTER 4

COLLECTIONS AND
REPAYMENTS
COLLECTION

• is a function of accounts receivable. It is


the recovery of cash from a business or
individual with which you have issued
an invoice.
FORCES OF COLLECTION

1. The Salesmen

 An individual who sells goods and services to other


entities.
2. House Collector

Matters to consider:
• Training, experience, personality
• Collection area knowledge and familiarity
• Population or number of customers
• Transport facilities
ATTRIBUTES TO LOOK FOR IN COLLECTORS:

1. Integrity,industriousness,resourceulness,initiative,tenacity
and perseverance
2. Good grooming, neatneess
3. Working knowledge
4. Time consciousness and management
3. Attorneys

Things to look for in an attorney:


1. Education,training,experience
2. Personality,positive character,attributes
3. References-clientele,adversaries in practices
4. Collection Agency

Things to look for:


1. Length of service
2. People behind the company
3. Finances
4. Manpower complements
5. Clientele, references
6. Areas of operation

5. Government
Elements of a delinquent
account:

1. Cause
2. Cure
3. Collect
Effects of Delinquency In
Receivables

• It disrupts and complicates business operation


• It reduces profit targets
• It slows down growth
• It causes personal and business failure
GENERAL TYPES OF DEBTOR

1. The Up-to-Date – “A dog type debtor”


2. Occasional Delinquent – “A monkey type of
debtor”
3. Habitual Delinquent – “Lizard type of debtor”
4. The changed circumstance – “A chameleon
type of debtor”
5. The premeditated delinquent – “A crocodile
type”
General Categories of Debtor’s
Defenses
• Aggressive – generally used by one who is a premeditated
delinquent debtor

• Denying – motivated by the debtor’s inability to pay with good


reason or to avoid payment without good reason

• Defiant – generally used by a debtor who is either


unscrupulous or a habitual bad debtor

• Plea for sympathy – is either a victim of an accident or


misfortune
Kinds of Delinquent Debtor

1. The Negligent
2. The Honest but confused
3. The Can’t be bothered
4. Seasonal Delinquent
5. Honest late payer
6. Chronically slow
7. Wittingly late
8. The stretcher
9. Habitual discounter
10. The Tightrope walker
11. The Braggart
12. The “Vanishing” debtossr

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