Debtor Policy

PURPOSE

To govern the action for the management of debt within the legal framework of Greenfield Fox Cranbourne Pty Ltd trading as Highview Accounting Services.

SUMMARY

The objectives of the debt management policy are to:

1. Increase the level of compliance in the payment of debt by limiting the total value of debt, the number of debtors and ageing of debt outstanding.
2. Maximise debt resolution by the pursuit of debt in a sensible, cost efficient, effective and timely manner.
3. Ensure all debt is managed, inclusive of debts is sourced by virtue of a service level agreement, is adequately monitored, reported and controlled.
4. Maintain high standards of client service.
5. The key principle of debt management is the early detection, reporting and pursuit of all debt.
6. The policy is to be applied consistently across all fees& charges, maintaining ethical, fair and sensible credit administration.
7. Staff must exercise discretion and apply the policy with commonsense to ensure that debtors in similar circumstances are treated equally. Staff will be responsible for identifying situations where the strict application of the policy would lead to an inappropriate result, for example where it would be inconsistent with this policy, unjust or unreasonable. In such cases, the matter is to be referred to the Partner(s) for further direction. Situations which may be considered for referral include, cases which may have substantially detrimental economic and financial impacts on the Business including effects on employment and capital investment. Action which may contradict the intention of the Business’ vision and / or its Mission and possible impact on its professional standing.
8. This policy is to be read in conjunction with related compliance legislation, other business policies and procedures.

POLICY

1. Debtors are to be chased up on a weekly basis whether it by via telephone or in writing, both for code clients and personals from all years. E.g. One week personals get letters and the codes get calls, then next week it is reversed.
2. Personal lists are to be maintained and monitored weekly for all outstanding years, including current financial year.
3. Clients are to get an initial letter of outstanding amount, then a call. There are four letters in total, the third being a Veda letter and the forth a debt collection letter. (letters will need to be adjusted to reflect this)
4. A 20% interest fee will be charged as per invoice on overdue invoices. In this instance the client will need to be contacted in writing before the interest is applied. This fee is to be applied after no response to 2nd letter.
5. If the client enters into a payment plan then, they will not be charged interest, unless the client defaults on their arrangement, then interest is applied immediately. (Need to update arrangement letter to include this clause). This payment plan must be in writing and must be monitored weekly or monthly as per agreement.
6. All clients whom are currently with the debt collector are to be added to Veda. Any further clients that you wish to send to Veda MUST be approved by the assigned partner.
7. Clients are only to be sent to the debt collector after there is no response from Veda letter, and MUST be approved by the assigned partner.
8. If you are away you must give a detailed list of payment arrangements and outstanding issues to administration staff, giving one of the job of making sure these payments are made.
9. Weekly meeting to be held with Silvio, with monthly debtor reports emailed to all partners and practice manager.
10. Need to keep an eye on appointments. If a client is coming in that has an outstanding debt amount, then a statements is to be put with the file and given to the accountant to chase up on the day. You are required to follow up on these cases after the appointment is held.

Running order of Debtors

1. Client get initial letter
2. 1st Reminder call
3. 2nd Letter with detail that 20% will be added to there account if not paid within 7 days
4. 2nd Call with 20% interest has been added
5. 3rd Letter – Veda
6. 3rd Call telling them that their details are going to be sent to Veda
7. 4th Letter – Debt Collector
8. 4th Call to advise that their details have been passed onto our debt collection agency