DEBT COLLECTION POLICY AND PROCEDURE
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DEBT COLLECTION POLICY AND PROCEDURE
Student name: Andrea Kelly
Student number: 270207640
Debt Collection Policy and Procedure
PURPOSE AND SCOPE
The purpose of the policy and procedure is to collect outstanding debts from customers as they are due
Debt Collection is an important part of the accounting function and integral to the cashflow of the business as required by the Corporations Act 2001 and in compliance with legislative bodies and government.
This policy and procedure provide a framework for the application and management of debt collection.
Terminology
For the purposes of this policy and procedure, the following terms apply:
ATO: Australian Taxation Office
ASIC: Australian Securities and Investment Commission
Corporations Act 2001
ACCC: Australian Competition and Consumer Commission
Procedure
The steps provided are to be followed to recovering overdue payments from customers:
1) Review the terms of your contract (section to be completed by student)
2) Send a reminder (section to be completed by student)
3) Send a letter of demand (section to be completed by student)
4) Get help with dispute resolution (section to be completed by student)
5) Use a debt collection agency (section to be completed by student)
6) Take legal action (section to be completed by student)
7) Timeframes (section to be completed by student)
APPENDIX (section to be completed by student)
This appendix contains useful links to be used throughout the debt collection process, including:
-38100452755FNSACC413
Make decisions in a legal contextAssessment 2 of 3
Project
00FNSACC413
Make decisions in a legal context
Assessment 2 of 3
Project
5171440329184000
Assessment Instructions
Task overview
This is assessment two (2) of three (3) assessments for FNSACC413 Make decisions in a legal context.
This assessment requires you to complete four (4) tasks to test your knowledge, understanding and skills required of this unit.
To be assessed as competent, you must complete all tasks in the assessment document and template provided.
Additional resources and supporting documentsTo complete this assessment, you will need:
Access to your learning materials
Access to a computer and the internet
Access to Microsoft Word
Larrys Landscapes Invoice 6204.pdf
Larrys Landscapes Quote 6204.pdf
Assessment 2.docx
Larrys Landscapes Debt Collection Procedure Template.docx
865324146371Assessment Information
Submission
You are entitled to three (3) attempts to complete this assessment satisfactorily. Incomplete assessments will not be marked and will count as one of your three attempts.
All questions must be responded to correctly to be assessed as satisfactory for this assessment.
Answers must be typed into the space provided and submitted electronically via the LMS. Hand-written assessments will not be accepted unless previously arranged with your assessor.
Reasonable adjustment
Students may request a reasonable adjustment for assessment tasks.
Reasonable adjustment usually involves varying:
the processes for conducting the assessment (e.g. allowing additional time)
the evidence gathering techniques (e.g. oral rather than written questioning, use of a scribe, modifications to equipment)
However, the evidence collected must allow the student to demonstrate all requirements of the unit.
Refer to the Student Handbook or contact your Trainer for further information.
00Assessment Information
Submission
You are entitled to three (3) attempts to complete this assessment satisfactorily. Incomplete assessments will not be marked and will count as one of your three attempts.
All questions must be responded to correctly to be assessed as satisfactory for this assessment.
Answers must be typed into the space provided and submitted electronically via the LMS. Hand-written assessments will not be accepted unless previously arranged with your assessor.
Reasonable adjustment
Students may request a reasonable adjustment for assessment tasks.
Reasonable adjustment usually involves varying:
the processes for conducting the assessment (e.g. allowing additional time)
the evidence gathering techniques (e.g. oral rather than written questioning, use of a scribe, modifications to equipment)
However, the evidence collected must allow the student to demonstrate all requirements of the unit.
Refer to the Student Handbook or contact your Trainer for further information.
31690217977800
3676656850700
-860709344400
Please consider the environment before printing this assessment.
Submission requirements
To be eligible to be deemed competent in this assessment, you are required to complete and submit this assessment document. Word documents will not be accepted. Please save any Word documents as PDF files before submitting.
Most modern web browsers can open and display a PDF file. However, if you have an older operating system, you may need a PDF reader installed on your device, such as the Acrobat Reader, available from Adobe.
Windows: Word 2013 and newer
Choose File > Export > Create PDF/XPS.
Windows: Word 2010
1. Click the File tab
2. Click Save As. To see the Save As dialogue box in Word 2013 and Word 2016, you have to choose a location and folder
3. In the File Name box, enter a name for the file, if you haven't already
4. In the Save as type list, click PDF (*.pdf).
If you want the file to open in the selected format after saving, select the Open file after publishing check box.
If the document requires high print quality, click Standard (publishing online and printing).
If the file size is more important than print quality, click Minimum size (publishing online).
5. Click Options to set the page to be printed, to choose whether markup should be printed, and to select output options. Click OK when finished.
6. Click Save.
macOS: Office for Mac
To save your file as a PDF in Office for Mac, follow these easy steps:
1. Click the File
2. Click Save As
3. Click File Format towards the bottom of the window
4. Select PDF from the list of available file formats
5. Give your file a name if it doesn't already have one, then click Export
For more detailed instructions, refer to Microsoft Support.
Assessment 2
left508000The following assessment task uses two simulated businesses, Ace Finance and Larrys Landscapes Pty Ltd. To complete the assessment tasks, you will need to access information, templates, policies, and procedures associated with Larrys Landscapes Pty Ltd. These additional resources and supporting documents will be hyperlinked in each task as "File Attached" and will automatically download once clicked. You can also download them from the learning platform under the Modules Assessment 2 tab.
For this assessment, you will play the role of junior bookkeeper at Ace Finance, the newly appointed accounting firm for Larrys Landscapes Pty Ltd, which is a small pool construction and landscaping company that has been in operation for 15 years.
TASK 1: Research Task / Short Answer Questions
Email subject: Research for Larrys Landscapes Pty Ltd
Attachment: Larrys Landscapes Invoice 6204
Attachment: Larrys Landscapes Quote 6204
Attachment: Larrys Landscapes Debt Collection Procedure Template
Hi there,
A new client, Larrys Landscapes Pty Ltd, based in Victoria, has contacted us to seek advice and assistance on a debtor matter. Larrys Landscapes has completed work for a client, Mollys Motel Pty Ltd, who hasnt paid the final tax invoice. Larry is the owner of Larrys Landscapes and has never been in this position before, has no debtor policy or procedures in place and has exhausted all debt collection avenues that he is aware of. Larry is seeking our advice on what further action can be taken.
Larry has advised the following:
Larry sent Molly, the owner of Mollys Motel Pty Ltd a quote before starting the work, see quote Q6204 attached.
Tax invoice 6204 to Mollys Motel Pty Ltd is now 45 days overdue. A copy of the tax invoice is attached.
Larry sent Tax Invoice 6204 for payment of the final project balance to Mollys Motel Pty Ltd on the day the pool construction and landscaping was complete which detailed the 14-day credit terms.
Larry contacted Molly from Mollys Motel Pty Ltd by email with a copy of the Tax Invoice 12 days after this to remind her that payment was due in two (2) days.
Larry left a message by phone five (5) days after the invoice had fallen due and payable (19 days after completion of the project) and sent an email of the overdue invoice as well, as a payment reminder.
Larry tried to contact Molly from Mollys Motel Pty Ltd by telephone fourteen (14) days after the due date and left a message with the receptionist, but Molly did not return his call.
Larry sent Molly from Mollys Motel Pty Ltd a reminder email with a copy of the original signed quote and tax invoice twenty-eight (28) days after the invoice had fallen due and payable. Larry has not received a response to this email.
I would like you to do some research to familiarise yourself with Australian laws and regulations so we can provide Larry with the advice he is seeking.
Warm regards,Andrew | Managerandrew@ace.financeInstructions to students:
Refer to Larrys Landscapes Tax Invoice 6204 and Quote Q6204 and use the resources provided and conduct your own research to answer the following questions. All questions must be answered, and references must be provided.
Question 1
According to the www.business.vic.gov.au guide on Manage Overdue Payments and Debt Recovery, there are seven (7) steps for businesses to use as a guide to recover an overdue payment. These steps are in accordance with the Australian Consumer Law.
List and describe your interpretation of each step in your own words. (300-350 words in total)
You assessor will confirm your interpretation of these compliance requirements in your assessment submission feedback.
Step Description
Question 2
List five (5) debt collection practices that are banned under the Australian Consumer Law.
1. 2. 3. 4. 5. Question 3
Sometimes, a court decision may be persuasive for courts of other states and territories, even if they do not have binding authority.
Review the case Megalift v Terminals [2009] NSWSC324 where a decision was made by the Supreme Court of New South Wales. The decision made may have persuasive authority for courts of another jurisdiction, therefore it can be useful to look into the details.
In your own words, provide a summary of the case in point form and briefly explain how this case could be relevant to the case study provided (i.e. Larrys Landscaping vs Mollys Motel). Reference your source/s.
(350-400 words)
Your answer must include:
The background and facts of the case
Where the case was heard
The case findings/outcomes
Where was the case heard?
Background/facts of the case
Court findings / case outcomes
How could this case be relevant to the case study provided (i.e. Larrys Landscaping vs Mollys Motel)?
Question 4
Refer to quote number Q6204 provided by Larrys Landscapes Pty Ltd to Mollys Motel Pty Ltd and explain if this is a legally binding contract based on the principles of Australian contract law. Your response must include the principles of Australian contract law. You must reference your source/s. (100-200 words)
TASK 2: Client Letter
Email subject: Client letter
Hi there,
Thanks very much for the research you conducted. It has been most useful.
Could you please draft a letter to Larry from Larrys Landscapes Pty Ltd to advise whether they have followed the proper guidelines to collect the debt in compliance with Victorian guidelines and other relevant legislation?
Please include in your letter the steps they can take moving forward to collect the outstanding debt.
Warm regards,Andrew | Managerandrew@ace.financeInstructions to Students
In the space provided, compose a letter to Larrys Landscapes Pty Ltd to advise Larry if the debt collection procedures taken so far follow Victorian guidelines and compliance with ACCC and ASIC requirements and what further action should be taken to recover the debt. Your letter is to provide a summary of the debt collection activities taken thus far and how each action does/doesnt comply. It must also provide Larry with the advice he needs on what action needs to be taken from this point onwards and sources that he may refer to and use for each step. Your letter must be professional and grammatically correct. (400- 500 words)
TASK 3: Email Client
Email subject: Client email
Hi there,
Thank you for providing such clear and sound advice to Larry. He has followed all the steps highlighted in your letter but unfortunately still has not recovered any of the $33,000 debt from Mollys Motel Pty Ltd.
Larry now wishes to take legal action based on the Victorian Court System. Please draft an email to Larry to advise what action Larrys Landscapes needs to take to commence proceedings with the Victorian Civil and Administrative Tribunal (VCAT). In your response make sure you reference relevant legislation, statues, regulations and legal precedents to support your advice. Before sending it off to Larry, I will check the email to ensure it is accurate.
Warm regards,Andrew | Managerandrew@ace.financeInstructions to Students
In the space provided, draft an email to Larrys Landscapes Pty Ltd to advise them how to commence proceedings with VCAT, referencing relevant legislation, statues, regulations and legal precedents to support your advice. (150-200 words)
TASK 4: Debt Collection Procedure
Email subject: Debt Collection Procedure
Hi there,
I have advised Larry from Larrys Landscapes Pty Ltd that the company should have a debt collection procedure in place and Larry has engaged our services to complete this task.
I would like you to draft a Debt Collection Procedure for Larrys Landscapes using the template provided, based on www.business.gov.aus What to do when you haven't been paid guidelines. Please make sure that you include a realistic timeframe for each step, to align with statutory deadlines, in accordance with the guidelines and relevant legislation. I have formatted the template and inserted Larry Landscapes Pty Ltds logo which Larry has authorised us to use for this project. I would also like you to draft letters, emails and telephone scripts using the templates found in the guidelines and attach them to the end of the policy, where indicated, including which stage of the debt collection procedure they relate to.
Please have this task completed for review by the end of next week.
Warm regards,Andrew | Managerandrew@ace.financeInstructions to Students
Research and complete the provided Debt Collection Procedure Template for Larrys Landscapes, based on www.business.gov.aus What to do when you haven't been paid guidelines and ACCCs Debt collection guideline for collectors and creditors.
You must complete the following sections of the Debt Collection Procedure Template:
Review the terms of your contractSend a reminderSend a letter of demandGet help with dispute resolutionUse a debt collection agencyTake legal actionTimeframes (including initial payment, first, second and final reminders)
Appendix
Save the Debt Collection Procedure Template with the following naming convention: FNSACC413_Project_Debt Collection Procedure_yourname_yymmdd.
Assessment checklist
Students must have completed all activities within this assessment before submitting. This includes:
Task 1
Respond to four (4) short answer questions
Task 2
Letter to Larrys Landscapes
Task 3
Email to Larrys Landscapes
Task 4
Complete and submit the Debt Collection Procedure Template
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Congratulations you have reached the end of Assessment 2!
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