AAT Level 4 – Credit and Debt Management (CRDM)
This is an optional unit for the Level 4 Diploma in Professional Accounting.
Most organisations offer credit terms to its customers. And on this unit, you will learn about the risks involved, the techniques you can use assess credit risks, and explore the techniques that can be used to collect overdue debts.
£29.90
- Description
Description
This unit delves into comprehending and applying effective credit control principles, encompassing suitable debt management frameworks. Businesses commonly extend credit terms to customers, which can pose financial challenges if payments are delayed or not made. So, it’s crucial to ascertain the ability of potential credit customers to fulfil agreed-upon terms.
The module explores techniques for assessing credit risks by policies, relevant laws, and ethical standards. Moreover, once credit decisions are approved, it becomes imperative to ensure timely payment of debts by customers. Students will also explore strategies for collecting overdue debts, aligning with organisational policies, legal protocols, and debt collection methods.
Understanding and employing performance metrics related to liquidity, profitability, and gearing are core components of this module. Additionally, students will enhance their comprehension of liquidity management, bankruptcies, and insolvencies, alongside exploring mechanisms such as invoice discounting, factoring, and credit insurance.
Learning outcomes
- Understand relevant legislation and contract law that impacts the credit control environment
- Understand how information is used to assess credit risk and grant credit in compliance with organisational policies and procedures
- Understand the organisation’s credit control processes for managing and collecting debts
- Understand different techniques available to collect debts
