Purpose and scope

The purpose of this policy is to provide a clear guidance for SALC staff, the Board and member councils on the recording, reporting, recovering and monitoring of income.     All staff must follow this procedure to ensure that SALC maximises the collection of debts and income by using a co-ordinated approach but having regard to the member's ability to pay.  Whilst some parts of income recovery must adhere to relevant regulations, the overall principle of recovery should be efficient and effective recovery of incomed owed.

A debt is defined as any payment expected by SALC that has not been paid by the due date

Debts to which this policy applies

For the avoidance of doubt this policy applies to all debts and income due to SALC including but not limited to:

• membership fees

• invoices (for training, payroll and internal audit)

• sponsorship / grant funding  

Responsibilities

The SALC CEO owns this policy and will review annually and update as necessary.  On a day-to-day basis all members of the team shall be responsible for following procedures and processes and highlighting any updates or amendments necessary to ensure continual improvement.  

General principles

The general principles adopted in this policy are as follows:

• to ensure a professional, consistent and timely approach to debt recovery action across SALC's functions

• to limit the circumstances in which credit is offered.  To consider the member's circumstances and ability to pay prior to granting any credit terms, and to only extend to those members in a position to pay the debt in accordance with SALC's terms 

• to improve the speed of collection and the levels of income collected by SALC

• to consider the impact on the debtor of the consequence of any recovery options pursued including proportionality

• to try and protect members from undue financial hardship by ensuring realistic payment arrangements are agreed upon

• to differentiate between the debtor who wont pay and the debtor who cant pay and take appropriate action in either case.

Delivery of this policy

Delivering the policy involves a number of processes which are explained in more detail below:

• raising of invoices

• methods of payment

• refunds 

• collection and recovery

• bad debt provision

• writing debts off

Raising invoices

All SALC invoices are raised as soon as practicable and include the following information:

• a unique reference number and full customer details

• what the invoice is for

• when payment is due

• how to pay

• who to contact for further information.

Invoices are sent by email whenever possible and the email address, if it is a new customer, will be verified and added to the JAMS system.

When charging for goods or services SALC will make payment as easy as possible by raising the invoice within 10 working days of ordering or receipt of the completed service.

Methods of payment

SALC will promote the use of online payments as a preferred method to maximise the use of this wherever possible.  

SALC may offer members an instalment arrangement in exceptional circumstances.  The instalment amount offered, frequency of the payments will be based on an assessment of the likelihood of the member meeting the arrangement.   

Collection and recovery

The collection of income in respect of invoices raised must follow a standard course, which fully documents the efforts made to settle the debt.    The following principles apply:

• invoices raised in respect of services delivered are normally due for payment immediately although the maximum payment terms is 60 days unless otherwise agreed with the CEO.

• If no payment is received after 60 days from the date of the invoice date or agreed payment terms a reminder will be issued.

• If no payment is received after 30 days from the date of the first reminder, a second reminder will be issued.  The provision of services will remain in the meantime.

• If no payment is received within 30 days of the second reminder matters will be discussed with the CEO and consideration given to the particular circumstances on a case-by-case basis.  The following actions will be considered:

  • direct liaison with the Chair of the Council followed up in writing with details of the agreement reached

  • deadline for the suspension of membership services.

• If no payment is received after 120 days days further recovery action will be considered which may include legal proceedings and/or referral to debt collection agencies.

All debts will be taken into consideration when referring the debt for legal recovery.  Where multiple debts are owed SALC will endeavour to consolidate those debts before taking recovery action.

Cancellations and refunds 

Where refunds apply, other areas of SALC's systems in other areas of the service will be checked to ascertain whether any debt is owed before making any refund.  For paid training events, the following policy applies:

• two week's notice - full refund

• one week's notice - re-schedule the booking

• less than one week's notice - no refund.

Likewise, where a debtor is also a supplier to SALC, SALC will seek to offset any overdue debts from the monies owed to the supplier.

Bad debt provision

The Finance Manager in conjunction with the CEO must ensure there is adequate provision for bad debts. 

Bad debts which are usually an amount owed by a debtor that is unlikely to be paid should be reviewed every six months to establish if circumstances have changed and the debt is now recoverable.   It is noted that the liquidity of a member council is not usually an issue the circumstances surrounding non-payment is often as a result of a loss of staff and difficulty in the administration of council business and administrative processes.

Writing debts off

All debts will be acted on in accordance with SALC's financial rules.  If the debt remains unpaid, after exhausting all appropriate recovery methods, the debt should be written off.  All requests to write off debts must be approved by the CEO and agreed by the SALC Board.  

It would normally be expected that debts to be written off would consist of:

• cumulative debts under £50, where no payment has been received within six months of sending the final demand.

• All debts where a debt collection agent advises they are unable to collect and all options are exhausted - in these circumstances the CEO will deem it is not cost-effective to pusue.

• All debts where the legal advice is that the debt is irrecoverable or that legal action is unlikely to be cost-effective.

• The debt is uneconomical to collect meaning the cost of collection outweighs the value of the debt recovered.

• Once appropriate authorisation has been received the debt will be removed from the accounting system and charged against the appropriate bad debt cost centre.

Changes to this policy

This is a controlled document and is the responsibility of the Chief Executive Officer.  It was last updated on 15th March 2024.