Manage debtor processes

This unit describes the performance outcomes, skills and knowledge required to manage debtor accounts and processing procedures to minimise loss and maximise debt recovery within a wholesale business.


This unit encompasses methods to control consumer debt from sale of products or services and protect a business from financial risk. It involves analysing customer information to confirm appropriate credit levels, trading terms and payment procedures for customers, acting to limit financial risk to both the business and its customers, and implementing debt recovery procedures according to company policy.



Elements and Performance Criteria




Control consumer debt from direct sale of products or services.


Source information on trading terms and credit levels for purchasers.


Confirm trading terms for individual purchaser of products or services according to organisationpolicy.


Analyse trading history of individual purchaser of products or services.


Confirm payment procedures for business, account and individual customers according to workplace policy and relevant legislation.


Communicate confirmed payment policy and procedures for business, account and individual customers to other team members.


Remove financial risk.


Determine financial risk to both business and customer.


Examine options available to remove financial risk in sales transactions.


Take action to remove financial risk.


Implement debt recovery strategy.


Apply procedures to determine if a customer account is in arrears within set workplace timeframes.


Ascertain capacity of customer to adhere to debt recovery strategy.


Reconfirm trading terms with customer.


Take action to avoid future debt relationships with the customer.

Required Skills

This section describes the essential skills and knowledge and their level, required for this unit.

The following skills must be assessed as part of this unit:

managing compliance with credit levels and trading terms

formalising credit and trading term request and enquiry processes

minimising liability and risk

managing debt to achieve strategic and budget outcomes

monitoring debit history for a customer, product or service

assessing financial risk

configuring business technology to report customer history, credit levels and trading terms

interpersonal communication skills to:

communicate with team members through clear and direct communication

ask questions to identify and confirm requirements

share information

give instructions

use language and concepts appropriate to cultural differences

use and interpret non-verbal communication

literacy skills in regard to:

planning, organising and analysing information

documenting policy and procedures

numeracy skills in regard to:

financial processes and planning

recording and reporting information

analysing financial risks.

The following knowledge must be assessed as part of this unit:

features of a debt recovery strategy

debtor reporting protocols

credit exposure and risk strategies

liabilities and factors indicating bad debt

profit and the impact of debt on cash flow

business policy and procedures relating to:

corrective actions

communicating with staff and customers

financial governance

relevant sources of information on trading terms and credit levels for customers

legal and legislative requirements affecting debt recovery.

Evidence Required

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, the range statement and the Assessment Guidelines for this Training Package.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the following is essential:

identifies and accesses relevant and accurate information to confirm trading terms and credit levels for customers

consistently applies business procedures to confirm trading terms and credit levels with customers

determines financial risk to avoid debt and recognise, remove and control the risk of bad debts

identifies, describes and avoids debt exposure

consistently applies formal debt recovery strategy according to business policy and legislative requirements.

Context of and specific resources for assessment

Assessment must ensure access to:

a real or simulated work environment

relevant business financial systems

relevant documentation, such as:

workplace or sample policy and procedure manuals

financial transaction dockets, slips and invoices

banking deposit forms

workplace or sample documentation in regard to credit approval processes

relevant legislation

Methods of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples are appropriate for this unit:

observation of performance in the workplace

a simulated role play

third-party reports from a supervisor

review of portfolio of evidence

customer feedback

written or verbal questioning to assess knowledge and understanding.

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended.

Assessing employability skills

Employability skills are integral to effective performance in the workplace and are broadly consistent across industry sectors. How these skills are applied varies between occupations and qualifications due to the different work functions and contexts.

Employability skills embedded in this unit should be assessed holistically in the context of the job role and with other relevant units that make up the skill set or qualification.

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording in the performance criteria is detailed below.

Information sources may include:

legislation and regulations

workplace policy and procedures

supplier or customer instructions

industry codes of practice

feedback from managers and supervisors

non-verbal communication

online or hard copy resources.

Purchaser may include:

new or repeat contacts

external and internal contacts

other businesses or end consumers serviced through business customers or directly

purchasers with routine or special requests

people from a range of social, cultural and ethnic backgrounds and with varying physical and mental abilities.

Organisationpolicy may relate to:

operational procedures

acquisition and sale of products and services

management structure and communication relationships

interaction with customers

debt recovery and financial governance.

Trading history may accessed via:

manual files and reports

electronic files and reports


external agents.

Payment procedures may include:

direct credit

credit card


standing offers


agreed means.

Relevant legislation may include:

application of GST

Australian Competition and Consumer Commission provisions

Trade Practices and Fair Trading Acts

privacy legislation


workplace relations

industry codes of practice

licence, patent or copyright arrangements

anti-discrimination law.

Techniques used to communicate may include:

speaking and listening

reading and writing

electronic media, such as email


body language

facial expression

using languages other than English including , local community languages, Indigenous languages

using forms of visual communication such as sign language

using assistive technology such as TTY.

Team members may include:

managers and supervisors

full-time, part-time, casual or contract staff

people from a range of social, cultural and ethnic backgrounds

people with varying levels of language and literacy

people with a range of responsibilities and job descriptions.

Financial risk may vary according to:

types of products and services provided

size, type and location of business

business merchandise range

strategic measurement and evaluation systems and processes

characteristics of the specific products or services

business service range.

Sales transactions may be completed:


on the telephone


by order form.

Debt recovery strategies may include:

electronic or manual forms of contact with the debtor

letters of intent

legal letters

contracted help from debt recovery agencies

alteration to trading terms

legal action

financial remedies.




Competency Field


Employability Skills

The required outcomes described in this unit contain applicable facets of employability skills. The Employability Skills Summary of the qualification in which this unit is packaged will assist in identifying employability skills requirements.

Licensing Information

Not applicable.