Which practice helps in assessing the effectiveness of debt management efforts?

Conducting audits and reviews regularly is essential for assessing the effectiveness of debt management efforts because these practices provide a systematic evaluation of the debt management processes in place. Regular audits help to ensure compliance with established policies and procedures, identifying areas for improvement and ensuring transparency and accountability in the management of debts. Through audits, organizations can analyze past performance, assess risk factors, and enhance decision-making strategies related to debt collection and repayment. This continuous assessment ultimately leads to more effective management of debts and the ability to develop informed strategies for future debt-related activities.

On the other hand, eliminating documentation processes could hinder the ability to track debts and monitor payment progress accurately, while avoiding communication with debtors neglects the important role of engagement in managing collections effectively. Focusing solely on new debts also fails to address existing obligations, which are crucial for a comprehensive debt management strategy. It is important to have a balanced approach that includes analyzing past debts in conjunction with managing new debts for overall effectiveness.