THURSDAY: 16 December 2021. Time Allowed: 3 hours.
Answer ALL questions. Marks allocated to each question are shown at the end of the question.
QUESTION ONE
1. Describe four parties to documentary collection. (4 marks)
Enumerate six advantages of documentary collection. (6 marks)
2. Explain the following terms as used in Alternative Dispute Resolution (ADR):
Arbitration. (2 marks)
Mediation. (2 marks)
Adjudication. (2 marks)
3. Outline four benefits of outsourcing collection services. (4 marks)
(Total: 20 marks)
QUESTION TWO
1. Discuss five areas covered by the Consumer Credit Act. (10 marks)
2. Explain three personal skills that are essential for successful debt collection. (6 marks)
3. List four advantages of emails in communicating to debtors. (4 marks)
(Total: 20 marks)
QUESTION THREE
1. Debt collection can be quite frustrating and boring if too many customers fail to make payments on time.
With reference to the above statement, explain four challenges faced during debt collection. (8 marks)
2. Describe three benefits of automated invoicing software. (6 marks)
3. An effective credit function is vital to sustaining the growth and survival of a business.
With reference to the above statement, analyse three actionable steps that a credit controller can take to implement a more effective credit function. (6 marks)
(Total: 20 marks)
QUESTION FOUR
1. A collection call is an active negotiation that requires full attention in order to do the best job for both your company and the customer.
With reference to the above statement, enumerate four negotiation techniques that could help a collections officer gather the information needed to move towards a commitment to pay. (8 marks)
2. Explain three contents of an ideal collection policy. (6 marks)
3. List three advantages and three disadvantages of bank reconciliation to a credit analyst. (6 marks)
(Total: 20 marks)
QUESTION FIVE
1. Outline four disadvantages of using standardised reminder letters in debt collection. (4 marks)
2. The collection manager needs a procedure for dealing with customers in a standardised manner to resolve payment issues.
With reference to the above statement, explain five steps in the collections procedure. (10 marks)
3. A skilled collections officer should be able to reduce company losses by encouraging customers to pay their overdue bills.
With reference to the above statement, list six responsibilities of a collections officer. (6 marks)
(Total: 20 marks)
