The world has become far more complex since Credit Matters first started in 2001. Running a profitable business these days is an even tougher proposition with ever-increasing risks seemingly around every corner.
This situation will get worse for B2B credit providers and for all businesses in general, as the recession develops. As criminologists have said, “In good times people steal because they can. In bad times they steal to survive.” I would reclarify this saying in a modern context as follows.
“In good times, businesspeople often become lazy and believe that even if they lose a few dollars, the next sale will more than compensate for any loss. Unfortunately, in the current world, sales will be fewer for most businesses and any loss harder to recover. In addition, fraud increases because the fraudsters know few businesses have the additional resources, (time and/or money) to engage in expensive legal action – with uncertain results.
The best solution has always been summed up by “prevention is better than the cure” and much cheaper, I would add in the long term.
Contact Kim for more information on how to operate more profitably and to avoid the pitfalls of slow paying customers and bad debts.
These blogs are designed to motivate business people and other professionals to improve their business operations to better understand financial risk management issues.
Improving the way you manage your financial risk management obligations, will assist to improve sales, cashflow and profits, whilst enhancing stakeholder relationships.
Historically, there have always three or five Cs of credit: capacity, capital, conditions, character and collateral. In more modern times, three more Cs were added in some circles, country, currency and cultural risk.
As time passes by, it occurs to me there are four more Cs which are worth considering, credit management, cash, communication and customers. These four Cs are aimed at reviewing the overall business viability when selling on B2B credit.
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Updated September 2021
Yes, the recession is now here and declared. However the full effects are not yet clear for every business. Despite the huge cost in commercial, social and people terms, there are always opportunities to minimise the damage or to perhaps survive and grow.
The purpose if this feature is to simply and briefly document the major events which are occurring in the hope we can all learn from this event. After all, there are many aspects of this recession which can benefit our commercial endeavours if only we can keep our minds open and emotions in-check
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Reputation in business is everything
Investment is everything you put in your business.
Selling the total experience of dealing with your business, is an essential component of business.
Knowing your stakeholders is of critical importance, as not every existing or potential stakeholder(s) can be trusted.
The free Members Area includes special features which may not be available to the general public.
The fundamental purpose of our Members Area is to build an environment where business people and students can learn and understand the issues associated with financial risk management in the business environment.
Red flags are warning signs that here may be problems with a potential or existing business customer relationships.
Typical customer red flag indicators can be seen when reviewing applications for credit, an increase in credit limits, periodical trading reviews, reputational stability and in day to day business activities.
Free online calculators to help you analysie your business.
Memos are an ideal way of keeping track of actions and conversations between you and your customers. Memos are also valuable evidence in case debt collection or legal action is required to recover an outstanding debt. However, writing out words and terms in full, can be time consuming and often are not required.
Having a structured set of words and abbreviated terms available within your business, allows for a disciplined approach to writing your memos. This aspect is important for effective communication between different groups of employees within the business. It is also extremely important if your memos end up being exposed in a Court case.
My perspective on the “how and why” recessions occur, the preceding indicators and suggested action to survive them. The purpose of this article is to share experience, knowledge and insight for the many business professionals that have either forgotten the pain of the previous recessions, not experienced one in their working life and/or believe the “modern world is recession proof”. As a result, many of these individuals may consider themselves to be immune to the catastrophic ramifications.
Understanding and acting on the following information may help you protect your financial and emotional well-being........
It can be daunting to make contact with your customers for the unpaid invoice(s), especially when you are not used to such contacts. Too many people have an image of the debt collector demanding payments against defenceless debtors.
Identify the warning signs that your Customers are going in to trouble or are in trouble already. Learn what you can do to protect yourself.
In this feature area you find items, which if not exclusively available elsewhere, are hard to come by in normal circumstances.
You are free to peruse or download them for your use.
We hope they will be of value to you.
An Inconvenient truth was a movie about global warming. The business environment also contains a number of inconvenient truths. As is the case for global warming, many people would like to ignore the inconvenient truths of business.
To be the best business person you can be, it is to learn the terminology of words commonly used in business. Different business environments may have specific words which are common to their industry and setting. However, there are certain words which have universal meaning.
Discover how despite the good intentions behind some of the Australian Government's initiatives to support people in their consumer and business endeavours, they are being manipulated by the unscrupulous.
The Experts Exchange – are articles which blend the thoughts of two professional people through collaboration on a particular topic/subject. The object of these articles is to illustrate the how and why the knowledge of two professions interact in a manner that makes the article of more valuable to the reader. Instead of only one view on the article subject, the reader is introduced to a broader perspective of the subject.
All recessions are damaging, although some are more than others. The differences between the amount of damage and ability to recover, will vary between recessions. For instance, with the current recession, Government support and interventions should minimise damage to a degree. However, it is the inappropriate actions of other parties which may negate many of the benefits provided. Consequently, this recession is likely to be more damaging than it might otherwise be, because of these other inappropriate actions.
This feature will put forward the key factors which I believe will make this recession worse than it should be. There is no doubt that the COVID19 virus is one of the main factors triggering this recession. The pandemic however, was “… only the final straw, which broke the camel’s back.” The pandemic, like the irresponsible lending which led to the Global Financial Crises (GFC), or the stock market crash of 1929, was only the final event which brought to light the fragility of the economic climate of that time.
In fact, we had been building up to this recession for a number of years. Unlike other recessions, we had an earlier opportunity to see and learn from the last business downturn; the GFC. Regrettably however, few people learnt the lessons of that downturn and therefore this recession will be worse than it has to be.
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For some years, there’s been argument for the elimination of cash as a transaction medium. There continues to be a rightful fightback against the principle of a digital, cashless society.
Both sides of the argument have their share of highly derogatory detractors using false or misleading information. This discussion is about presenting their respective cases in a clear manner, devoid of prejudices and to review the information from a risk management perspective. After all, for many people, cash is their only and cheapest transaction medium. It is a sobering thought, that as the current recession deepens post COVID19, cash may be some peoples’ only affordable form of payment transaction medium.
Don’t ever forget Caveat Emptor - buyer beware - always applies when buying or taking over an another business.
As a risk management professional with 50 years of experience in the world of business, I have been involved with a number of business take-overs, and started 4 businesses on my own or in partnerships
This feature is a product of my experiences and observations.
In this forum we give you the opportunity to ask a question and have it answered In this resource section the articles on financial risk management help you understand, learn and use in your business.
In this feature blog series we will cover what you need to do in order to survive the current recession.
Each week we will bring you practical advice and discuss a range of key factors to move your business forward in the changing economic climate.
There is no honour, or social kudos in putting your competitor out of business illegally. There may even be negative financial and legal implications if you have acted illegally.
Does that mean there are no other means to put your competitor out of business? Of course not. For instance, it is not your fault if your competitors operated improperly over the years and as a result, they go out of business.
It is also perfectly legal and practical, particularly as the recession proceeds, to want to see your competitors go out of business. After all, the number of your respective customers will likely decrease and the fewer competitors you have, the greater chance you have of making a sale. Now, I am not suggesting you deliberately target your competitors. Your primary focus must always be on survival and growth. Focusing on deliberately eliminating one or more competitors means you are not focused on your major objective of staying viable.
Read MoreDue to our current circumstances around combating the COVID-19 outbreak, it’s totally reasonable to expect, or at least prepare for, a global slowdown – and even recession.
Two factors I've constantly encouraged business owners and managers to focus on – after cashflow – have always been the costs of bad debt write-offs and the cost of fixing mistakes.
Credit Matters has a produced THE SALES and CAPITAL COST REPLACEMENT CALCULATOR to identify the cost of replacing capital lost when the account is written-off or mistakes have to be processed.
on key terms and insights is both
informative & helpfulfor all tradespeople.
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REVISED MARCH 2020
Download PDF NowThis is certainly needed and valuable advice, so well done!
Having reviewed “A Guide to Help Business Tradies Get Paid”, I believe this could be a useful tool to consider for any tradie wanting to start a business.
It is easy to understand and user friendly. It provides a good guide to jump start your business and relevant topics to consider before and after starting your business.
Having this document in your phone would be a good quick reference guide.
I have been in the building industry for over 40 years and would recommend this guide.
The information included in setting up a company is really accurate. The more planning and consultation you can do before starting up the better.
Having been in business for over 40 years, I certainly agree with all the set up advice.
This is such a valuable document for any tradesperson contemplating starting a business.
It is full of information vital to establishing a business from scratch including one of the most vital aspects of business, getting paid.
I wish I had access to this information at the start of my career.
Joining a professional body shows you are interested in the development of your career. There will be many professionals which will not show a similar initiative. Today, you need every advantage in this very competitive business environment.
Professional bodies provide the following opportunities and advantages and an acceptance of your professional qualifications by your peers.
If you are not yet a member of a professional body, review the professional bodies listed with Credit Matters to add value to your career.
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It used to be said that there were businesses which were too big to fail. We have seen in recent times that this old saying is not always true. Today, it is sometimes seen that the bigger the business, the more likely it is to fail.
- Kim Radok
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Government agencies are a source of helpful and valuable information to mitigate some of the risks of operating and managing a business. The information is designed to help you operate within Government guidelines and Legislation. In addition, you will also find information to help you understand your rights in business.
In today's world, ignorance is no excuse.
Credit Matters has provided these access details to Government Agencies to keep yourself better informed and help you to better navigate the world of business.
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Credit Matters is an essential MUST DO tool for all potential and existing businesses to ensure all threats of diminishing the financial viability are identified and treated. The fields of fraud, theft and deception are complex and often flourish when persons and businesses will inadequate preventative tools are purposely targeted by the fraudster. Credit Matters provides colleagues with ‘criterions to think with’ in relation to preventing crime for colleagues and their businesses. Credit Matters is a proactive source in all categories of business loss management promulgating best practice based on experience and quantified financial preventative achievements. Credit Matters is a free service and has made great contributions to the industry. Credit Matters Founder Kim Radok is one of the most respected practitioners in the field of financial management. It is recommended for all colleagues to visit Credit Matters Website.