Credit Today is the fastest growing publication in the credit field, favored by more and more top credit executives. We cover the world of business, or trade credit, with concise, yet in-depth, reporting. We also publish the most in-depth salary survey in the industry, covering all major credit positions.Credit Today is the fastest growing publication in the credit field, favored by more and more top credit executives. We cover the world of business, or trade credit, with concise, yet in-depth, reporting. We also publish the most in-depth salary survey in the industry, covering all major credit positions.   
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Home | Best Practices Search 
CreditPoint Software

Credit Today's Best Practices For Credit, Collections, and Accounts Receivable Management

Here you'll find Credit Today's exclusive Best Practices for procedures throughout the entire order-to-cash process, including credit, collections and A/R!

The Best Practice Series: Installment XV: Notifying Customers of a New Lockbox Address Is Not Something To Be Taken Lightly
By David Schmidt
Consolidating customer payments is often done through a lockbox or lockbox network and is critical to a company's cash flow. Sometimes, there is a need to change a lockbox address or other payment address, which can, in turn, affect cash flow if customers do not up-date this address in their AP file. Besides increasing mail float and otherwise delaying the receipt of payment, it becomes an administrative hassle following up with customers trying to get them to change your payment address in their system. This Best Practice Installment covers:
  • the principles surrounding this best practice
  • the benefits of following our recommended best-practices
  • Nine specific Credit Today recommendations for changing your lockbox
  • What performance measures you'll want to use to measure your progess and ensure you're on the right track
. . .
keep reading
Best Practices in Credit Revisited
By Frank Lowe
It is no great surprise that the pace of change, even in the credit vocation, continues to accelerate and what seemed new and novel just a little while ago is now convention. What has not changed is the pressing need for credit professionals to stay up-to-date in order to leverage the latest and greatest technology, processes and people just to keep pace. . . . keep reading
The Best Practices Series: Installment XV, Handling and Filing Bankruptcy Claims
By David Schmidt
Bankruptcies serve a necessary function in the free enterprise system. They provide a legal means to, as equitably as possible, either reorganize or redistribute the assets of failed enterprises. From a creditor perspective, however, the bankruptcy process provides a last opportunity to recover what you can from your terminally ill customers. Doing so requires an understanding of the bankruptcy laws and processes and, most importantly, a methodology for insuring that the necessary steps are taken to protect your company's interests. In this Best Practice installment, you'll learn:
  1. The three primary benefits of implementing best practices for bankruptcy claims
  2. Our eleven recommendations for procedures to implement when filing bankruptcy claims
  3. Six metrics to track to monitor how well you're measuring up
In addition, we've included a case study with some great ideas. . . .
keep reading
Best Practices Today, Part XIII: Establish Comprehensive Credit Controls to Minimize Vulnerabilities
By David Schmidt
Most discussions of credit controls focus on credit limits and all the related factors that affect credit risk and therefore the assignment of credit lines. That is all well and good, but if you only look at credit limits you can still fail to address process issues directly related to the remediation of customer risk. Internal system weaknesses and staff performance shortcomings pose risks that ultimately affect your recovery rates. Credit controls help you avoid those situations. . . . keep reading
Best Practices Today, Part XII: Deductions, a Burden or An Opportunity to Save Millions?
By David Schmidt
Deductions and disputes represent a tremendous challenge to most credit functions. If nothing else, resolving short payment issues and other disputes takes up an inordinate amount of credit department time. with very little to show in return, unless you tackle them systematically. Resolving deductio . . . keep reading
The Urgency of Invoice Accuracy and How to Ensure It
By Dave Schmidt
One of the best things you can do in credit is to ensure your invoices are accurate. This month's Best Practices Feature focuses on best practices in invoicing: why that's so important, what the best practices are; how, specifically you can get there; what to measure to ensure you stay there. Gen . . . keep reading
Best Practices, Installment IX - Use Automated Systems to Electronically Receive and Post Customer Payments
By David Schmidt
Manual remittance processing is slow and labor intensive. The larger your invoice volume and the subsequent number of customer payments, the greater your remittance processing burden. As a consequence, many companies find it difficult to stay current in terms of cash posting, which slows down collec . . . keep reading
Best Practices Series: Installment VIII - Implement Systems to Accommodate All Types of Payment Formats
Making it easier for customers to remit what they owe has benefits that extend well beyond the accounts receivable function. Vendors recognized by their customers as being easy to do business with should, as a result, realize increased sales. If it is difficult to do business with your firm, the ten . . . keep reading
The Best Practice Series: Installment VII--Prioritize Collections
Prioritize Collections Time is wasted when collectors must review their calendar or tickler file, an aged trial balance, and the latest lockbox details to determine who they should contact next. As is only natural, collectors also tend to avoid initiating tough calls and instead work on . . . keep reading
The Best Practice Series: Installment 6: Treatment Plans Should Address All of the Collection And Dispute Scenarios in Your Receivables Portfolio
Because no two customers are the same, it stands to reason that you need to treat them differently when collection efforts are required. Likewise, large and small balances due should be approached differently to ensure optimal collection efficiency and effectiveness. Collection strategies enable you to tailor your treatment of the different customer groups in your receivables portfolio. Collection strategies consist of a sequence of action steps (tactics) designed to address a specific collection scenario. They provide collectors with a proven roadmap to follow based on customer type and amount outstanding. . . . keep reading
The Best Practice Series: Installment 5 -Optimizing the Risk/Reward Equation and Increasing Efficiency with Credit Scoring
Credit scores are integral to consumer credit and collections but not with trade receivables management. This is less a functional concern than one involving adaptation to change and new technology. As companies automate receivables, the use of credit scores becomes much more of a practical reality. . . . keep reading
The Best Practice Series: Installment 4 - Monitoring Customer Account Activity
Because risk is never static, every portfolio of accounts receivable is a dynamic entity. Risk changes with each payment and purchase not just on an account level but also on a portfolio level, as you evaluate each customer's characteristics in comparison to those of their peers. Risk also changes . . . keep reading
The Best Practice Series: Installment 3: Base New Customer Credit Application Processing on Distribution Channels and Anticipated Exposure
No two customers are alike, and the differences are even more pronounced if your customers come from different industries. Even the creditor serving a single industry needs to establish separate protocols for dealing with the differences in their customer base - large vs. small, solid vs. risky, hig . . . keep reading
The Best Practice Series, Part 2: Provide Customers with Easy Access to your Credit Department and Information About Their Accounts
Customers who make the effort to contact the credit department are customers who will probably pay. Good intentions are implicit in their actions. But if they are calling to ask about problems or to get information, they will delay paying if they: Cannot reach the person who handles their . . . keep reading
The Best Practice Series for Accounts Receivable, Credit And Collections
By Dave Schmidt
While the objectives of receivables, credit and collections management may be similar from industry to industry and company to company, there remains a great deal of diversity in carrying them out. That's why best practice guidelines should provide a framework that identifies key principles and succ . . . keep reading
Deduction and Dispute Best Practices: Thirteen Best Practice Steps To Implement
Deduction and dispute handling is a critical receivables management function. Not managed properly, deductions can sap credit department productivity and severely dampen performance. The problem stems is that deduction and dispute resolution consumes considerable resources with only minimal returns . . . keep reading
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ICTF Global Symposium
 This Month's Survey

Cash Application Processing

This month we dig in on...
  • How are payments are being received today? - What percentages are being accepted at lock boxes, payment portals, remote data capture (RDC), vs. electronic data interchange (EDI)
  • In what form are payments being received? - What percentage from checks, ACH, wire, credit card, etc.
  • What percent of credit departments are using auto-cash software
  • What automatic "hit rates" are for applying checks
  • How long it takes to apply payments
Plus much more... If you're as interested in these results as we are, then please click here to participate!

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