What does the term "Debt Recovery" refer to in GFEBS?

What does the term "Debt Recovery" refer to in GFEBS?

• A. The procedures for extending new credit
• B. The processes used to recoup owed funds from debtors
• C. The methods of writing off bad debts
• D. The strategies for preventing future debt

Answer: (B)

The term "Debt Recovery" in the context of GFEBS refers specifically to the processes used to recoup owed funds from debtors. This involves various actions taken to retrieve outstanding debts that have not been paid on time. Debt recovery encompasses a range of activities, including communicating with debtors to remind them of their obligations, negotiating payment plans, and, when necessary, taking legal action to ensure the owed amounts are collected. Understanding this concept is crucial for effective financial management within GFEBS, as recovering funds directly impacts cash flow and the financial stability of the organization. It focuses on the direct action needed to collect debts rather than preventative or corrective measures, distinguishing it from other options that address different aspects of credit management or bad debt resolution.

The term "Debt Recovery" in the context of GFEBS refers specifically to the processes used to recoup owed funds from debtors. This involves various actions taken to retrieve outstanding debts that have not been paid on time. Debt recovery encompasses a range of activities, including communicating with debtors to remind them of their obligations, negotiating payment plans, and, when necessary, taking legal action to ensure the owed amounts are collected.

Understanding this concept is crucial for effective financial management within GFEBS, as recovering funds directly impacts cash flow and the financial stability of the organization. It focuses on the direct action needed to collect debts rather than preventative or corrective measures, distinguishing it from other options that address different aspects of credit management or bad debt resolution.