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A Complete Checklist on Acquired Receivables and Its Practices
Here's a checklist to use if you are responsible for a new account receivable acquisition. Follow this to keep your acquired receivables clean and effective.
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Harris Semegram · Formerly Director of Credit at Prestige Brands Holding
 

This is a great checklist to use if you are responsible for a newly acquired receivable portfolio. The sooner you can get this information, the more likely the receivables will be clean.

If you are the acquiring company, this will give you something to use when you sit down with your counterpart about the receivables you are bringing in-house.

Keep in mind, this is also a great checklist to use in your due diligence BEFORE purchasing a company and its receivables. You probably won't use all of these items prior to purchasing a company and its AR, but it will give you a good sense for what you SHOULD be asking in advance. The last thing you want is to find "skeletons in the closet" after you've already agreed on a price.

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A Complete Checklist on Acquired Receivables and Its Practices

Here's a checklist to use if you are responsible for a new account receivable acquisition. Follow this to keep your acquired receivables clean and effective.

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About this course

 

description
lessonOverview

This is a great checklist to use if you are responsible for a newly acquired receivable portfolio. The sooner you can get this information, the more likely the receivables will be clean.

If you are the acquiring company, this will give you something to use when you sit down with your counterpart about the receivables you are bringing in-house.

Keep in mind, this is also a great checklist to use in your due diligence BEFORE purchasing a company and its receivables. You probably won't use all of these items prior to purchasing a company and its AR, but it will give you a good sense for what you SHOULD be asking in advance. The last thing you want is to find "skeletons in the closet" after you've already agreed on a price.

This could also be potentially useful in gaining leverage in negotations with the company (and A/R) you are negotiating to buy.

Finally, a third consideration for this checklist is to that is a very good way to make sure your own receivables are in ship-shape order. If YOUR company were to be purchased, would you be able to know that your own receivables were in perfect shape to turn over to someone else? Use this to find out.

It is important to note that, as with all such templates and checklists, this may need to be adapted to your business. While there are many commonalities of all receivables, each business has its own unique characteristics. This will undoubtedly give you a thorough start, but be open to modifications for your situation.

Acquired Receivables Due Diligence Checklist
Please give first priority to items ranked highest (in "A" to "C" order).
Completed Not completed Item Being Worked On
EDI agreements related to order entry or payment receipts (A)
Accounts receivable aging report, evidence of bad debt experience over the last 5 years, and a separate schedule of receivables other than trade receivables.(A)
List of collection agencies utilized and list of all accounts placed with said agencies and present status of these accounts. (A)
Copies of invoices, order & shipping documentation, including proof of delivery for all unpaid invoices (full or partial balance) at point of billing transition (A)
Copies of all outstanding deductions and supporting documentation supplied by the customer in addition to all correspondence pertaining to deductions that have been denied. (A)
List of customers presently engaging in or in test mode for any EDI transaction set, indicating what EDI sets are active (billing, ASNs, etc.)(A)
List of special billing requirements/actions established with any customer.(A)
Establish transitional agreement for funds collected by seller that are due buyer and vice-versa. (A)
Summary customer listing including billing address and related shipping addresses plus assigned credit limit and risk rating. (A)
Schedule of current prepaids or deposits (B)
List and support documentation associated with any proof of claim filed in a pending bankruptcy matter and similar documentation for any bankruptcy matter that is pending filing a proof of claim (B)
Copies of credit and A/R policy manuals. (B)
Copies of all settlement agreements entered into with customers. (B)
Copies of all secured transaction documents, including L/Cs and UCC filings. (B)
Copies of contracts established with credit reporting services such as D&B (B)
List of customer accounts payable contacts. (B)
Any documents relating to material write-offs other than in the ordinary course. (B)
Listing of and documentation associated with any invoice document issued to reverse/correct a credit memo issued within the past 180. (B)
Schedule of all dba's and ficticious business names and all filings and registrations therefor (used to set up acceptable payee names at bank. (C)
Product documentation and manuals for the Company's software relating to credit & A/R management as well as access to enable reproduction of past transactions. (C)
Details pertaining to any credit or A/R industry group memberships. (C)
Copies of all customer correspondence pertaining to A/R activity for the past two years. (C)
Web-site linking or any other agreement relating to e-commerce initiative that pertains to credit or A/R applications. (C)

 
instructor
name title image description Ins
Harris Semegram Formerly Director of Credit at Prestige Brands Holding      
related
image tag title description link contentType
KPIs and Reporting The Ultimate Template on First remainder letter for Outstanding Payment Download 1st reminder letter template to know the mandatory data fields and variables to process the reminder letter in clering the past due invoices https://academy.highako.com/template-on-first-remainder-letter-for-outstandingp-payment  
Deductions Resolution A/R Aging Reports in SAP | Customization & Analysis Collector training on how to build A/R aging reports and analyze open items in SAP application. Turn your accounts receivables to accounts received today! https://academy.highako.com/ar-aging-reports-in-sap-customization-analysis-course  

 

About this course

 

description
lessonOverview

This is a great checklist to use if you are responsible for a newly acquired receivable portfolio. The sooner you can get this information, the more likely the receivables will be clean.

If you are the acquiring company, this will give you something to use when you sit down with your counterpart about the receivables you are bringing in-house.

Keep in mind, this is also a great checklist to use in your due diligence BEFORE purchasing a company and its receivables. You probably won't use all of these items prior to purchasing a company and its AR, but it will give you a good sense for what you SHOULD be asking in advance. The last thing you want is to find "skeletons in the closet" after you've already agreed on a price.

This could also be potentially useful in gaining leverage in negotations with the company (and A/R) you are negotiating to buy.

Finally, a third consideration for this checklist is to that is a very good way to make sure your own receivables are in ship-shape order. If YOUR company were to be purchased, would you be able to know that your own receivables were in perfect shape to turn over to someone else? Use this to find out.

It is important to note that, as with all such templates and checklists, this may need to be adapted to your business. While there are many commonalities of all receivables, each business has its own unique characteristics. This will undoubtedly give you a thorough start, but be open to modifications for your situation.

Acquired Receivables Due Diligence Checklist
Please give first priority to items ranked highest (in "A" to "C" order).
Completed Not completed Item Being Worked On
EDI agreements related to order entry or payment receipts (A)
Accounts receivable aging report, evidence of bad debt experience over the last 5 years, and a separate schedule of receivables other than trade receivables.(A)
List of collection agencies utilized and list of all accounts placed with said agencies and present status of these accounts. (A)
Copies of invoices, order & shipping documentation, including proof of delivery for all unpaid invoices (full or partial balance) at point of billing transition (A)
Copies of all outstanding deductions and supporting documentation supplied by the customer in addition to all correspondence pertaining to deductions that have been denied. (A)
List of customers presently engaging in or in test mode for any EDI transaction set, indicating what EDI sets are active (billing, ASNs, etc.)(A)
List of special billing requirements/actions established with any customer.(A)
Establish transitional agreement for funds collected by seller that are due buyer and vice-versa. (A)
Summary customer listing including billing address and related shipping addresses plus assigned credit limit and risk rating. (A)
Schedule of current prepaids or deposits (B)
List and support documentation associated with any proof of claim filed in a pending bankruptcy matter and similar documentation for any bankruptcy matter that is pending filing a proof of claim (B)
Copies of credit and A/R policy manuals. (B)
Copies of all settlement agreements entered into with customers. (B)
Copies of all secured transaction documents, including L/Cs and UCC filings. (B)
Copies of contracts established with credit reporting services such as D&B (B)
List of customer accounts payable contacts. (B)
Any documents relating to material write-offs other than in the ordinary course. (B)
Listing of and documentation associated with any invoice document issued to reverse/correct a credit memo issued within the past 180. (B)
Schedule of all dba's and ficticious business names and all filings and registrations therefor (used to set up acceptable payee names at bank. (C)
Product documentation and manuals for the Company's software relating to credit & A/R management as well as access to enable reproduction of past transactions. (C)
Details pertaining to any credit or A/R industry group memberships. (C)
Copies of all customer correspondence pertaining to A/R activity for the past two years. (C)
Web-site linking or any other agreement relating to e-commerce initiative that pertains to credit or A/R applications. (C)

 
instructor
name title image description Ins
Harris Semegram Formerly Director of Credit at Prestige Brands Holding      
related
image tag title description link contentType
KPIs and Reporting The Ultimate Template on First remainder letter for Outstanding Payment Download 1st reminder letter template to know the mandatory data fields and variables to process the reminder letter in clering the past due invoices https://academy.highako.com/template-on-first-remainder-letter-for-outstandingp-payment  
Deductions Resolution A/R Aging Reports in SAP | Customization & Analysis Collector training on how to build A/R aging reports and analyze open items in SAP application. Turn your accounts receivables to accounts received today! https://academy.highako.com/ar-aging-reports-in-sap-customization-analysis-course