DAY 7:

Collecting Bad Debts

STEP 1

In this first step, you will read carefully the presentation of this unit (phrasal verbs have been highlighted in yellow). A full glossary below will help you understand it better. To get information in Spanish, just place the arrow of your mouse on any highlighted word without clicking.

We are back in the Accounts Department today. Christopher Thorn, a Management Trainee, is studying the work in the Accounts Department. Mr. Buckhurst, the Chief Accountant, has decided to chase up some bad debts.
Collecting bad debts is often a difficult affair. Retail business is usually done on a cash basis, and wholesale business is done on credit. Harper & Grant mainly do business on wholesale terms: they have to give credit, that is, shops or stores can have the goods they want and defer payment. But credit is usually only given for thirty days. For each individual sale, an invoice is sent to the customer, that is a list of the goods delivered and the amount due on that particular transaction. At the end of the month each customer is sent an account, which shows the total amount due.
Every company likes to receive long credit from its suppliers and would like to give short credit to its customers. It is fairly common to offer an inducement to customers to pay earlier than they need by offering a small discount; that is, the customer pays slightly less if he pays within, say, ten days of the date of invoice.
Sometimes, of course, a debtor cannot pay; for example, it may happen that a firm never gets its money because another firm whom they supplied with goods has become insolvent. In some cases a firm does not pay because the people who run it are dishonest.
Accounts not paid in time are called overdue accounts or outstanding accounts. Very often a sales representative has to call and collect the money or make enquiries.
Sometimes, in very difficult cases, a firm employs a professional debt-collector. No company wants to get a reputation for being a bad payer. It may then be difficult to get supplies on credit. There are agencies which will give information about the financial situation of almost any company, so that suppliers can judge whether they are a good credit risk. Many buyers will suggest that a supplier writes to their bank for a reference.
Luckily, Harper & Grant always mark their goods with a serial number. Some firms do this, others do not. In this case, you will see that it turns out to be very useful indeed..

GLOSSARY:
to chase up: to pursue strongly (perseguir);
bad debts: money which has been owing to the firm for a long time (cuentas incobrables);
retail =/= wholesale: trade between supplier and customer (minorista =/= mayorista);
wholesale =/= retail: trade between manufacturer and supplier or retailer (mayorista =/= minorista);
to give credit: to give a time allowance before payment is due (conceder u otorgar crédito);
to defer payment: to put off or to postpone paying until later (diferir, aplazar o postergar el pago);
due = expired, matured: owed and payable immediately or on demand (vencido);
long credit: also called long-term credit. Bills need not be paid for a certain period of time (crédito a largo plazo);
short credit: also called short-term credit. Bills must be paid very soon after receipt of goods (crédito a corto plazo);
insolvent: without sufficient funds to continue doing business (fallido, insolvente);
overdue accounts: accounts not paid in time (cuentas vencidas y no pagadas; en mora, atrasadas);
outstanding accounts: money which has been owed to a firm, or a person, for a long time (cuentas pendientes);
debt-collector: a professional who collects debts on a commission basis (cobrador, recaudador);
serial number: a manufacturing internal code (número de serie);
turns out to be: proves to be (resulta ser).