Checklist for Debtors Control

 Broad Objectives:
1. All amounts recorded as Debtors are bona-fide and recoverable.
2. There are no unrecorded debtors.
3. The debtors stated in the financial statements represent the amounts
recoverable after making adequate provisions for debts doubtful of
recovery.
4. Debtors have been disclosed in accordance with the recognised
accounting policies and practices and relevant statutory requirements.

 Control Environment:
1. Tata Code of Conduct: Refer details from the Tata manual.
2. Organisation Structure:
 Identification of the functions (sub-processes) within the process.
 Approval of the processes defined
 Accounting
 Monitoring/ follow-up of dues
 Write offs/ Doubtful debts (Identification of cases,
approval of write offs, tax deduction compliances)
 Collection of dues (responsibility and accounting)
 MIS Reporting:
Age Analysis
Overdue Analysis and reasons thereof
Liquidation plans and actuals
Ratio Analysis: O/s debtors Vs. Turnover
Budget Comparison of DSO
Payment Terms and Comparison of Actual dues.

3. Segregation of duties (reviewed through assignment of responsibilities)

 4. Staff Turnover.

 Operational Objectives:
1. Accounting of debtors:
 Accuracy in Accounting
 Debit/ Credit Notes
 Reconciliation and balance confirmations
 Financial Statements Disclosure (AS18, Sch VI)
 Regulatory identification of 301 parties, recording of
transactions in 301 register
 Timeliness of recording of debtors
 AS11 Compliance
 Advance payments adjustments
 Linking ob balances when a party is debtor as well as
creditor.
 FEMA compliance for dues beyond 180 days/ 1 year
 Accounting of receipts and linking it with the bills.
 Different payment terms for different parties
 Bill discounting facilities, process, usage and accounting.
 Timeliness in Accounting
 Accounting of receivables from JVs.
 One to one linking of collections to respective invoices
 Accounting for discounts/ exchange fluctuation effects
 Accounting for write offs.
2. Collection of dues:
 Timeliness in collection.
 Process of Collection.
 Cash Management System (CMS) banking/ ECS
 Cash Discounts
 High Value Clearing
 3. Factoring of Debtors:
 Debtors sold to an external agency.
 Study of reasons and profitability of the process thereof.

4. Monitoring of Collectibles:
 Timely collection of dues
 Sending reminders before due dates
 Follow-up of long outstanding dues
 Taking call on dues not receivable.

 Policies and Procedures:

 Schedule of Authority
 Corporate Provisioning
 Write offs
 Reporting
 Follow-up of debtors

 Monitoring and Information System:

 Monitoring of debts through system generated Debtors Age Report
 Comprehensiveness of Age Report.
 Reminders to debtors before due dates.
 Reporting to Management (MIS)