Question
A year has passed and after sending the letter of demand and turn over the debt to the collection agency in last June, Customers outstanding
A year has passed and after sending the letter of demand and turn over the debt to the collection agency in last June, Customers outstanding amount still unpaid. As per the companys credit policy, if the debt has been outstanding for more than 12 months, the debt needs to be written off.
1. Discuss whether organization recovery practices have been exhausted.
2. To ensure customers pay on time and a full amount, a business must have a credit policy or collection policy. List three clear written guidelines that should be written in the credit and collection policy of an organization
Company Credit Policy Snappy Pictures Ltd sell printing canvas. The company is owned and managed by the owner Andy Lim. Standard credit terms are 30 days. At the end of the month an aged receivables report is printed, and overdue accounts are reviewed. Monthly statement is issued at the end of the month. The following company debt recovery process and collection policy for Accounts Receivable: 0 - 30 days Invoice sent to customer with monthly statement (current) 31 - 60 days Sent overdue sticker to next statement (overdue account) 61 - 90 days Phone call to customer informing them that if payment is not made no (overdue account) further credit will be given and credit facility will be put on hold 91 + days (overdue If customer's debt is more than $50 a letter advising customer that their account) account will be handed to Collections Agency unless payment is received within 14 days Customer Delinquency A debt that is 90+ days overdue and less than $150 will be written off as a bad debt. A Debtor's account is deemed delinquent when it has been outstanding for longer than 12 months and all attempts to recoup the outstanding amount have been exhausted, the account will be written off as a bad debt as per the terms set in the organisational credit policy for Snappy Pictures Pty LtdStep by Step Solution
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