Accounts Receivable Best Practices for Small to Medium Sized Commercial Entities (Course Id 557)

This course reviews best practices in the accounts receivable function of small to medium commercial entities as it relates to invoicing and pricing. It also focuses on credit best practices including credit evaluation, use of Z Score and other ratios and methods to secure customer payment when open ended credit is deemed too risky. Collection best practices are explored including those related to account reconciliation. Payment application, internal controls and available banking technology are also reviewed.

This course is appropriate for any CPA who has a beginning to moderate degree of familiarity with the accounts receivable function.

NASBA QAS - Text - NASBA Registry - 557

Course Learning Objectives

• Associate the importance of the billing, pricing and credit memo process to accounts receivable best practices
  
• Differentiate customer credit evaluation techniques
  
• Define and use the Altman Z score and other ratios in evaluating customers
  
• Recognize non-traditional methods to secure customer payment
  
• Recognize best practices of the collection function
  
• Associate the importance of internal controls with the payment application function

Chapter 1 - Accounts Receivable Best Practices for Small to Medium Sized Commercial Entities

Course Learning Objectives

Introduction

Written Policies and Procedures

Accounts Receivable Process Overview

Sales and the Accounts Receivable Management Process

Best Practices – Sales Processes

Credit

Best Practices – Customer Credit Evaluation

Tier 1 Customer Credit Analysis

What Business Credit Reports are Available?

Sample Tier 1 Credit Matrix

Tier 2 Customer Credit Analysis

Working with Internally Prepared Financial Statements

Financial Ratio Analysis

Altman Z Score

Sample Tier 2 Credit Matrix

Review Questions

Credit Approval

Credit Monitoring

Best Practices – Customer Monitoring

Methods to Secure the Sale

Methods to Secure the Sale Best Practices

Obtain credit insurance where it is available and makes commercial sense to do so.

Factoring

Personal Guarantees

UCC-1’s

Collections

Collections Best Practices

Account Reconciliation

Accounts Receivable Administration

Portfolio Review

Internal Controls

Payment Application

Bank Remittance Processing Options

Review Questions

Glossary