Credit Matters Blog


Kim Radok 19 March 2024

Operating and managing a business has always been a risky business and success is never assured, no matter how long our businesses have been operating. Change is ever present and requires owners and managers being alert to the ramifications of these changes.

Accordingly, it is a wise businessowner and their management teams that understand to achieve the best outcome possible for their business, they cannot rely on old business formats and strategies. One business format which needs to change how it operates is how operational silos relate to other silos within their business.

There will always be a place for a modern version of operating professional silos within a business. This is required so employees within the silos can focus on the needs and to stay up to date with the modern requirements of their respective professions. However, the modern operating silo also needs to support the needs of their fellow employees in other professional silos within the business.

In addition, another focus for owners and management is to ensure there are always win-win opportunities for their investor, supplier, and customer stakeholders. After all, a business does not operate in a vacuum, and the best outcomes for all parties are when they respect the needs of other stakeholders as well as their own.

There also must be a recognition of what you can control and what you cannot. The reality is you can design various strategies to achieve a win-win outcome for your trading relationships. However, just as the old saying goes, “… you can lead a horse to water, but you cannot make it drink it” so it goes with your trading partners.

Regarding what you can control, it comes down to offering a deal that is properly costed, adds value to the other party, and allows them to believe it is the fair deal under the circumstances.

The basics of offering a great deal therefore include;

  1. knowing all your costs relating to each trade,
  2. understanding that debt owed by your business needs to be paid in the future and is a cost that must be added to all trading transactions,
  3. debt owed to your business may not just be a current asset, it can also be a potential liability above and beyond the value of the invoice(s) raised if not paid,
  4. offering a discount upfront for prompt payment or a payment on supply,
  5. understanding how the acceptance or non-acceptance of a settlement discount is a signal of a customer’s or supplier’s financial ability to accept or pay the account,
  6. offering properly structured and costed cash payment options which are great purchasing and selling incentives, plus indicators of your stakeholders’ financial ability to pay and/or of their respect for their stakeholder’s right to earn a profit,
  7. having the employees who understand how to sell a valued proposition, plus understand the strategies of fraudsters and false promises of supply or payment, etc.

As the factors of doing business are changing, so does a business owner and their management team have to change with the times. No longer can they rely on the same old ways of doing business to be valid and hoping to be successful as the world changes.

There also needs to be an understanding that whilst your business may change with the times, there is no guarantee your stakeholders will also change for the mutual advantage of both parties. If that is the case, your business may have avoided a nasty loss. On the other hand, it may also mean that your business has not created the best transactional offering suited for the current time. In that situation, it may also indicate that your business has further work to do, in order to be competitive in the current business world.

Want to know more about this topic, contact Kim at, or on Mobile 0411 649 261. Alternatively, have a look at what we offer via our website at