The B2B world of credit is entering a really interesting period, irrespective of which country your business operates in. The factors which are similar and cause problems, make operating and managing business ever more demanding and difficult include the following.
1 The amount of business and consumer debt, which was either too cheap and/or easy to obtain by historical standards and/or hidden from public view by incompetent management or by incomplete documentation and lack of processing.
The worst thing about debt is that once obtained, it becomes an addictive and easy way to solve all immediate problems.
2 A lack of savings or access to finance. There is a constant attack on the principle of savings for the future under the guise of cash is lazy or doesn’t attract or add value.
Most of the arguments about cash being lazy or fails to add value are made by those parties that want your cash, or want to sell you something.
3 The entitlement groups of politicians, bureaucrats, state and local governments, plus unions and do-gooders that lack any respect for business, irrespective of whether or not a business offers credit, to be paid for their goods and services. Furthermore, these same parties also seem to believe businesses and their owners should not have the right to earn a profit and receive a return on their investments, despite insolvency laws which specify they must not trade insolvently.
The above groups without any business experience or understanding of the real world in which we all operate, feel empowered to:
- create all sorts of unforeseen taxes and costly regulations,
- load businesses with stifling and often conflicting red and green tape,
- actively encourage debtors not to pay their debts as they fall due,
- create ineffective and expensive court systems which often cannot force guilty debtors to pay their debts, without even more costs, etc.
Worse still with the above groups, as we constantly find in media reports, it seems no one can be held accountable for any of the above costs. It is as though they are a protected species and are given protections that most others in our societies do not receive.
It also seems that governments and their agencies do not protect innocent businesses and consumers from rogue businesses or government agencies. This situation occurs despite the charters of these organisations advise that they exist for these purposes. A perfect example was the British Post Office scandal. Every country has their own examples, especially here in Australia.
In summary, depending on the specifics in your country, the fundamentals of providing B2B credit to your customers, operating a business do not change, despite there being different legislations, regulations and ways of doing business.
The same parties exist in each country which believe they have the right to dictate how a business operates, irrespective that most of these parties have never operated a business. Furthermore, it seems these same parties seem to be a protected species as it appears they cannot be held accountable for the majority of their actions.
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PS
Accordingly, I will present a second blog titled THE PROBLEMS OF SELLING ON CREDIT ARE UNIVERSAL, NO MATTER WHAT COUNTRY YOUR BUSINESS OPERATES IN. PART 2.
In this blog, I will put forward possible solutions which can be applied in almost all countries.
Want to know more, contact Kim at kim@creditmatters.com.au, or 0411 649 261, or have a look at what we offer via our website at www.creditmatters.com.au
