How to Review Debtors Accounts

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{company_phone}}

Email: {{company_email}}

Website: {{company_website}}

Date of Review

Date: {{review_date}}

Review Period

This review covers the period from {{start_date}} to {{end_date}}.

Purpose of Review

The purpose of this review is to:

1. Identify overdue accounts and assess their ageing.

2. Determine the reasons for non-payment.

3. Implement appropriate collection strategies.

4. Project potential bad debt provisions.

5. Monitor the effectiveness of credit policies.

Debtors Ageing Analysis

A comprehensive debtors ageing report attached as Appendix A forms the basis of this review. The report categorizes outstanding invoices by their due dates: Current, 1-30 days overdue, 31-60 days overdue, 61-90 days overdue, and 90+ days overdue.

Key accounts with balances exceeding {{threshold_amount}} or outstanding for more than {{threshold_days}} days are to be highlighted for individual review.

Account Investigation and Follow-up Procedures

For each highlighted overdue account, the following actions must be taken:

1. **Verification:** Confirm the accuracy of invoices, delivery notes, and statements with the client. (Client: {{client_name}}, Invoice No: {{invoice_number}}, Amount: {{invoice_amount}})

2. **Communication Log Review:** Check records of previous communications with the debtor regarding outstanding payments. Note the date, method (e.g., phone, email), and outcome of each communication. (Last Communication Date: {{last_communication_date}}, Representative: {{communications_representative}})

3. **Debtor Contact:** Initiate contact with the debtor. Document all communication thoroughly, including promises of payment, reasons for delay, and any disputes. (Contact Person: {{debtor_contact_person}}, Contact Number: {{debtor_contact_number}}, Outcome: {{communication_outcome}})

4. **Payment Arrangements:** If full payment is not immediately possible, negotiate and agree upon a payment plan. Document the terms of the plan. (Agreed Payment Date: {{agreed_payment_date}}, Instalment Amount: {{instalment_amount}})

Risk Assessment and Provisioning

Based on the investigation, each overdue account will be assigned a risk rating (e.g., Low, Medium, High). Accounts deemed high risk, or where no satisfactory payment arrangement can be made, will be considered for bad debt provisioning.

Proposed Bad Debt Provision for this period: {{provision_amount}} for specific account {{account_id}}.

Recommendations and Action Plan

Based on this review, the following recommendations are proposed to improve debt collection and minimize future arrears:

1. {{recommendation_1}} (Target Date: {{recommendation_1_target_date}})

2. {{recommendation_2}} (Target Date: {{recommendation_2_target_date}})

3. {{recommendation_3}} (Target Date: {{recommendation_3_target_date}})

Reviewer Details and Approval

Reviewed By: {{reviewer_name}}

Position: {{reviewer_position}}

Date: {{review_completion_date}}

Approved By: {{approver_name}}

Position: {{approver_position}}

Date: {{approval_date}}