Credit Matters Blog


Kim Radok 18 September 2021

Most of us in business by now are aware there are five or eight Cs of credit, when it comes to evaluate the credit worthiness of our customers. Many of these Cs are also covered indirectly when creating or reviewing business plans.

As the world and our business experiences evolve over time, I believe reviewing the five or eight Cs of credit is simply not enough anymore. Rather, it is start of the process and needs to be maintained and then expanded to include the other four Cs.

These four Cs are designed to review the overall business viability when selling on B2B credit and I believe are worthy of consideration in marketing, sales, operational efficiency, extension of B2B credit and profitability perspectives of the business.

Credit management

Credit management and accounts receivable management is no longer an afterthought or an impediment to business, as has been the case historically.

Today, credit management is a truly professional occupation. The reality is that there is an art to granting or extending B2B credit. When evaluating an application for credit, a credit management professional draws on their “gut feel” based on their experiences alongside the other hard data information on the customer. At all times when making a decision, the credit management professional is conscious of increasing profitable sales whilst protecting the business from loss and fraud.

Credit managers are currently highly educated and trained in all aspects of doing business. They also have access to an increasing array of technology based products and services to add to their work kit. Their focus is on aspects of risk by creating sophisticated sales scenarios to match every customer.

You will generally find, when the credit management function is respected by management, it is supported and assists to achieve many profitable outcomes. When management does not understand the benefits, or properly respects the credit management focus, their business rarely achieves its long-term profit potential or sustainability.


As we have all discovered in creating and managing a business, a lack of cash is the main inhibitor of survival and growth. Furthermore, a business without cash, is not a business, as has already been, and will be found, as this current global recession continues.

It is interesting therefore to note that many businesses still treat their cash with contempt, or as though, somehow, it will never run out. The first priority therefore, is to enact strategies to protect the business’s cash and to avoid any cash leaving the business’s control without being correctly authorised.

Secondly, your business strategies should be looking for the red flags that indicate your customers have cashflow problems and quickly maximise the payment of unpaid invoices. The last thing you want is to collect the cash and to be then served with a preferential payment notice by insolvency administrators.

Furthermore, your business needs to be especially wary of all those “salespeople” which suggest cash in your business’s bank accounts is lazy. These peoples’ very survival is paramount on getting as much of your cash as they can. It also goes without saying, cash in the bank account provides opportunities which your cash strapped competitors and suppliers are unable to take up.


Communication is the one of the key factors in operating a successful business, so we are told. Yet when you look at how many businesses operate these days, you would not think this is the case.

It appears the rush to digital business tools makes it acceptable to ignore your stakeholders’ contacts and to receive a prompt answer that satisfies THEIR needs. Many people are also short on time or with short attention spans these days so we are also told. Therefore, having a variety of communication channels open is essential.

Too often however, we find when visiting websites there are few if any telephone numbers. Worse still, if there are these numbers, often the people who answer the phone calls, sound untrained, unprofessional, or disinterested.

A key advantage for any business these days, are well-trained and committed employees available to answer your callers’ questions. Whilst it may seem terribly old fashioned, a fully qualified and professional receptionist would also not go astray. They have always been, and always will be, a wonderful window, alongside with your business’s website, into the quality of your business’s operations.


Not all customers are equal, and the reasons are many.

A business with no customers is a business which cannot survive in the long term.

Customer behaviour varies according to economic conditions and their capacity to get paid, so they can pay you.

Technology is part of the answer, it is not the complete answer.

No longer can management sit back and run the business like “… the good old days”. Today, a whole new strategy of doing business is required. This entails getting rid of the operational silo mentality and thinking that the ‘champions of the business” are only in the sales silo and not throughout every area of the business.

Today, the emphasis must be on “team (name of your business)” where all roles within the business are respected. This situation entails creating an inclusive business culture. The real enemies of your business include, your competition, innovative disruptors who believe they can do better, slow paying – profit robbing customers and the do-gooders of society.

In today’s current economic environment nothing is certain today or tomorrow. What a business requires is the best organisational culture and team ethos, where all employees are respected as equals, plus the right type of functional technology. With these factors in place, your business has a chance to be a winner.

Want to know more, contact Kim at, or telephone (03) 9886 6707, A/H (03) 9802 0608, mobile 0411 649 261, or have a look at what we offer via our website at