This unit is about understanding and applying the principles of effective credit control in an organisation. Students will require an understanding of the principles of credit control in the context of relevant legislation, contract law, best practice, professional ethics and organisational policies. Students will also be able to describe remedies for breach of contract, as well as the terms and conditions of contracts with customers. Students will gain knowledge of sources of information and techniques used to assess credit risks in compliance with organisational policies, data protection legislation and professional ethics. Knowledge and application of performance measures relating to liquidity, profitability and gearing will be fundamental to this unit. Legal procedures and methods for collecting debts, as well as financial techniques used in granting and monitoring credit and debtors, will need to be understood and demonstrated. An understanding of different types of discounts will also be required.
Students will apply their skills to monitoring and evaluating credit control in compliance with organisational policies and, in particular, will learn the importance of liquidity management. Knowledge of bankruptcies and insolvencies will be required, as well as of the mechanisms of invoice discounting, factoring and credit insurance. Students will be expected to demonstrate their ability to present advice and recommendations in line with organisational policies in a professional manner, including for write-offs and provisions. The financial impact of decisions taken, and recommendations given will be essential skills required of the student.
- Analyse relevant legislation and contract law that has an impact on the credit control environment
- Critically analyse information from a variety of sources to assess credit risk and grant credit in compliance with organisational policies and procedures
- Evaluate a range of techniques to collect debts
- Critically evaluate credit control in line with organisational policies and procedures
- Present advice and recommendations to management on the credit control system