Collection Report
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ScribdTranslationsCollection Report
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ScribdTranslationsBolivarian Republic of Venezuela
University Technology Institute
Antonio José de Sucre
Headquarters–Caracas
Report
The collection
STUDENT:
DURAN CANDIDA
24,278,925
COD. 71
INTRODUCTION
All credit granted becomes debt for the customer and the debt generates
interest, and costs for the financing that is offered to the client by the
what a purchase. In turn, the customer is aware that a purchase is not the same
in cash that one on credit accepting in the latter the assignment of a
interest that must be paid for this according to the time that is
agreements for payment cancellation this chapter will take into account the regime
of interest as well as the financing costs in the granting of
credit.
The collection procedure is usually stipulated by the one who offers the
product or service. The one who must pay, in this way already knows what they are.
the conditions in question. The criteria for a
effective collection, starting by defining what collection management is
an activity whose objective is the reactivation of the commercial relationship with the
client, seeking to keep their credits up to date and be able to take advantage of the
advantages of the products. Debt management is one of the most important topics.
relevant within companies, as it must be coordinated with what is
Marketing and there must be a good cash flow for the organization.
The collection
The process by which collection is made effective is referred to as collection.
theperceptionfrom a payment for a purchase, for the provision of a
service, of the cancellation of a debt etc. This can be undertaken by the
same company that should receive the payment from a dedicated area
especially for this task, or it can be entrusted to another institution. In the
first case, after having clear what the amounts to be received are,
a person known as a collector shows up at homes
identified for the payment of the stipulated amount.
.
In order to prevent acts of corruption and understanding between clients and the
persons intended to collect money from the company, it is advisable that
these last ones should be rotated. Indeed, some vices in this regard can
lead to an undesirable consequence for the organization. That is why
it is also necessary for the people dedicated to suchtaskthey have displayed
of qualities related to thehonestyand integrity. In addition, the collector
it must have a customer arrival that allows it tosecurityto carry out
the collection in the fastest way possible.
As for the collections department, it is an area that must work on
in coordinated form with other related departments, such as accounting,
of finance and sales. Thus, for example, you will receive a report from
accounts department regarding overdue accounts receivable
or about to expire in order to fulfill the collection in those
Times. On the other hand, the collections sector must send reports to
financial sector to have an idea of the entries ofcashwhat is
they have seen materialized. Finally, the sales department is the one that will give
approximate account of thevolumetotal to take into account for completing the work
to make collections.
Sometimes, the procedure for carrying out a collection.
This is especially true in cases of difficult collections from clients.
of dubious behavior. In these cases, another entity is usually hired.
with procedures specifically designed to persuade people
waiving payment to reconsider their situation and comply with theirobligations.
Collection is a key element in theoperationof a company in the
to the extent that it ensures that it can continue to operate normally.
nothing would serve all the investment and work done if the accounts are not
they settle in a timely manner
Uncollectible account
They are the accounts that have resulted from credit operations, and that
considered uncollectible represent losses for the company. No
however, and as a result of the experience, the company estimates a provision
to cover the uncollectible accounts of a fiscal year.
An account can be uncollectible when a year has passed since
the relevant charges began, no favorable results are obtained or
income from those credits. The account recovery procedure
uncollectible is widely accepted by companies and is applied through the
fixed percentage method on global accounts receivable, the method of
fixed percentage on open sales and the method of estimating accounts
bad debts on credit sales.
For the calculation of the provision or reserve for doubtful accounts, the following are used
basically, three methods which are:
Direct Cancellation: it consists of settling the balance of doubtful collection
totally. This method has limited use because it does not oppose the
costs to the income of the period to which the accounts correspond.
In general, it applies when the amounts of the delinquent accounts are
little materiality.
Calculation: it is based on the classification of accounts according to their age.
and the analysis of the oldest accounts to determine a percentage
estimate of uncollectibles. This method also does not oppose the loss by
uncollectible to the income that produced it and on the other hand does not determine a
fair percentage for each year according to the income.
Estimation: through this method, the provision can be estimated based on
the base of a certain percentage of accounts receivable
valid, a procedure that also does not conform to the concept of
opposition of expenses and income; or based on a percentage of the amount
from credit sales. This last estimation procedure is
it is considered the most efficient because it allows determining the
amount to be charged in the current year.
Recommendations
In case of not being able to collect certain amounts as it may
it can be very complicated because the person who has to pay tries to evade the
payment of the money owed, one can resort to hiring companies that provide
collection services.
Do not take actions that are prohibited at the time of carrying out the
collection, such as the following, harassing those who owe money, providing information
false credit, take possession of your property, tell you that they will arrest you or you
They will embargo if they don't pay the amount they owe, pretending to be
lawyers to instill fear..