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Debt Management: Course Manual
Debt Management: Course Manual
Course Manual
Finance Training
Contents
1. Introduction to Debt Management................................................................2 2. Debt Management Month End .....................................................................4 3. Running the Aging 7 Buckets Report ...........................................................5 4. Running the Unapplied Receipt Register Report .........................................9 5. Reviewing Receipts ...................................................................................10 6. Payment Received - Unapplied to the Invoice ...........................................11 7. Reversing a Remitted and Cleared Receipt ..........................................14 8. Other Types of Receipts ............................................................................16 9. Reapplying a Receipt to a Different Invoice ...............................................18 10. Finding & Viewing Details of a Customers Account ................................20 11. Recovery Timetable .................................................................................22 12. Printing Customer Statement Stage 1 of the Recovery Timetable ........23 13. Printing and Recording Dunning Letters Stages 2 and 5 of the Recovery Timetable .......................................................................................................24 14. Calling the Customer and Recording the Details (including disputes) Stages 3 and 4 of the Recovery Timetable ....................................................26 15. Printing the Collectors Follow Up Report .................................................29 16. Keeping & Viewing Records of Recovery Attempts .................................30 17. Still Non payment . What next? ............................................................32 Appendix A: Example of a Customer Statement ............................................33 Appendix B: Dunning Letter 1 ........................................................................34 Appendix C: Dunning Letter 2 ........................................................................35 Debt Management Quiz .................................................................................36
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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
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Pursue the debt using the recovery timetable and a suitable method
NON PAYMENT
Court Action
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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.
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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
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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
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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.
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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
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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.
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).
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5. Reviewing Receipts
You can view your departments customer receipts on the system.
o 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.
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It is important to apply the receipt to the original invoice so that you can confirm that the customer has paid their invoice.
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.
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Make sure the receipt you wish to look at is highlighted then click on Open.
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 Apply and the following screen will display.
Click the Apply box and the Invoice number will default in the Apply To field and the amount of the receipt will default in the Amount Applied field.
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Save your work and close out of this screen so you are back to the Receipt Batch screen.
The amount of your receipt should be now showing in the Applied field as above and the status will be closed.
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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)
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Reversing a Cleared Receipt A receipt can be reversed if the STATUS field 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.
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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.
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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.
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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 search criteria and their respective applied, unapplied, or on-account amounts.
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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.
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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.
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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 entered 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 26 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 along with the outcome relating to the customer. 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 30, Keeping and Viewing records of recovery attempts.
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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.
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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
Dunning Letters
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Order by: Customer Dunning as of date: Information defaults in 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.
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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
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
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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. 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
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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. 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.
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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
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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 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
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o o
Account details: More detailed individual transaction information (log a dispute here) Correspondence: the following screen will display.
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.
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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 5.75.10, Chapter 8 of the Financial Procedures Manual or the Accounts Receivable team.
Finance Training DM Course Manual v1.9 Page 32 of 38
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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 Due (GBP) --------8XXX5 8XXX0 Invoice Number -------14-JAN-07 31-JAN-07 Days Invoice Amount Balance Due Date Late (GBP) ----5 -12 -----------101.99 25.85 Total ----------101.99 25.85 127.84
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
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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.
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.]
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2. What does this report show and how will you use it?
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?
7. What report would you run that detailed actions required after a call has been made?
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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?
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