Effective Prevention Strategies and Debt Collection

• Understand the meaning and reasons for Credit Management

• Appreciate the important of credit policy in defining the objectives, function and responsibilities of credit department to achieve maximum profitability from trading.

• Realise the need of credit assessment due to selective risk-taking in the interests of increasing overall profitability.

• Establish a Collection Policy that not only ensure recovery of debts, but also provide follow up procedures in monitoring and collection of debts

Introduction

• The origin of credit, its role and impact on the future

The Effects of Credit

• The financial effects of credit on cost, profits, liquidity, and the effect of bad debts on profits

Credit Management

• What is credit management?
• Its objectives
• Its relationship with Sales

Credit Policy

• Define guidelines governing the operation of credit department and is divided into two parts:
  • Polices
  • Procedures

Credit Assessment

• Evaluation of credit risk of customers through analyzing sources of information and interpretation of financial statements
•   Covers in two parts:
  • Establishing Creditworthiness
    • Basic information sources
    • In-depth information sources
    • Credit limits & terms

• Credit Limit Review
  • Ad hoc and on-going review of customers

Cash Collection

• Three parts to effective collection
  • Collection Policy
    • 6 Collection Procedures

• Debt Collection Agencies

• Legal Action
  • Planning stage, Process & remedies

During his years in the field of credit, he writes up a holistic credit policy that matches the companies’ specific requirements which outline the ground rules governing the operation of the credit department, and effective implementation and execution of the policy that not only managing the AR very well (98% collection of monthly sales by 120-150 days), but also controlling the debtors ageing of ‘150 days and above’ category to less than 5% of the total debtors ageing.  He had also conducted many in-house training for sales personnel, sales coordinators, and collection staff on credit procedures and debts collection.

Soo is passionate about teaching as he reckons it is his social responsibility to ‘transfer the knowledge and skills’, he had learned and acquired over the years, back to society.  He feels that there is nothing more satisfying than being able to pass down his knowledge and experiences to the next generation. He is therefore energetic and highly-charged when conducting training sessions. He believes ‘people can alter their lives by altering their attitudes’. Hence, for continuous learning, right attitude is very important.

He subscribes to the philosophy of “my attitude is my choice’. “Although I cannot change my world but I can change my attitude about it, and lives a healthier and happier life”. He is also an associate member of Malaysian Institute of Management, a committee member of Association of Credit Management Malaysia and an affiliate member of Institute of Credit Management (UK).