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.
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
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:
communicating with staff and customers
relevant sources of information on trading terms and credit levels for customers
legal and legislative requirements affecting debt recovery.
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
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
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.
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
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:
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
Payment procedures may include:
Relevant legislation may include:
application of GST
Australian Competition and Consumer Commission provisions
Trade Practices and Fair Trading Acts
industry codes of practice
licence, patent or copyright arrangements
Techniques used to communicate may include:
speaking and listening
reading and writing
electronic media, such as email
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
contracted help from debt recovery agencies
alteration to trading terms
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.