Cash Management and Investment Policy Budget Policy Funding Borrowings and Reserves Policy Insurance policy OBJECTIVES OF POLICY ensure that bad debt write-offs are authorized at appropriate levels. To ensure that only bona fide bad debts are written off. To ensure firmness in writing off bad debts. To ensure that debt collection is effective and efficient. To ensure that bad debts are kept within reasonable proportions. To ensure that the estimated loss resulting from bad debts is provided for during the To same period that the income to which it is related is earned ensure that the outstanding debtors appear in the monthly balance sheet at net To realizable value, since the provision is deducted from the gross amount of the debtors. ensure that debtors disclosed in the annual financial statements are stated at amounts To that are deemed to be collectable. ensure that uncollectable debt is written off within guidelines of existing policies and To applicable legislation. DEFINITIONS includes collection charges and interest in respect of the principal amount in “Arrears” arrears; refers to an amount owed for which a period equivalent to 24 months has “Bad debt” lapsed without any movement on that particular account. refers to proper formal notification (invoicing) on a statement to each customer of “Billing” amounts levied for assessment rates and services and the net accumulated balance of the account; refers to- “Council” a municipal council as referred to in section 157 of the Constitution
Cash Management and Investment Policy Budget Policy Funding Borrowings and Reserves Policy Insurance policy OBJECTIVES OF POLICY To ensure that bad debt write-offs are authorized at appropriate levels. To ensure that only bona fide bad debts are written off. To ensure firmness in writing off bad debts. To ensure that debt collection is effective and efficient. To ensure that bad debts are kept within reasonable proportions. To ensure that the estimated loss resulting from bad debts is provided for during the same period that the income to which it is related is earned To ensure that the outstanding debtors appear in the monthly balance sheet at net realizable value, since the provision is deducted from the gross amount of the debtors. To ensure that debtors disclosed in the annual financial statements are stated at amounts that are deemed to be collectable. To ensure that uncollectable debt is written off within guidelines of existing policies and applicable legislation. DEFINITIONS “Arrears” includes collection charges and interest in respect of the principal amount in arrears; “Bad debt” refers to an amount owed for which a period equivalent to 24 months has lapsed without any movement on that particular account. “Billing” refers to proper formal notification (invoicing) on a statement to each customer of amounts levied for assessment rates and services and the net accumulated balance of the account; “Council” refers to- a municipal council as referred to in section 157 of the Constitution