Credit Matters

Invaluable Reading From Australia and Around The World

Contributing to our position as Australia’s premium Financial Risk Management resource, our management globally explores and surveys relevant and valuable articles published by respected professionals, academics and organisation. The articles offered here are suggested reading for any Business Owner and Financial Risk Management professional.

Invaluable Reading From Australia and Around The World

Accounting

Rethinking the purpose of the corporation

Edward J. Waitzer

2 Sep 2019

It might seem that the core purpose of a business is to produce a profit. After all, a business which does not produce a profit cannot survive for long.

A profit is therefore a necessary requirement for all businesses. The questions now being asked relate to how is that profit earned, under what circumstances and who should benefit?

There are no simple answers to these questions in today's environment. There is the added complexity as it appears there is a pending slowdown or recession looming. The earning of profits will be even more critical for your businesses if it is to survive the next downturn or recession.

This article is one of many on the subject which discusses the purpose of a corporation. The information is geared towards larger corporations but applies equally to smaller sized businesses. On that basis, I suggest this article is of value for all business people and their management teams.

Australia: what can businesses expect?

Atradius Report

17 Jun 2019

Atradius have produced a brief report on the Australian business environment today regarding payments, bad debts and the state of credit management strategies.

The report is brief. I suggest however it is worth a read for all business owners, managers and associated professionals interacting with Australian businesses, particularly if your business is offering B2B credit.

Does Your Sales Team Work With You or Against You?

Nancy Seiverd

9 Nov 2018

Nancy Seivers is an experienced debt collector from the US who has written an article focused on helping business people understand the importance of sales and credit people working together. Irrespective of which country you operate in, building a business team that works together is essential. Building a business team, is like building a sporting team where everybody understands their role in helping the organisation achieve its maximum potential and "win the game."

Equally important, as Ms Seivers points out, is the role of management in developing cooperation between different groups within the business. Likewise, effective credit management and sales cooperation starts with support from senior management. Without such support and endorsement, a team-like relationship is unlikely to develop. 

This article may be of value for those managers and team leaders wishing to create cooperation between credit and sales employees to assist their business to maximise sales, cashlfow and profits. After all, that is the end game of operating and managing a business.

Why People Engage in White-Collar Crime

Robin Singh

30 Oct 2018

The author Robin Singh has provided useful insights on why people engage in white-collar crimes.

As you read through this article, you will note there are many complex issues which make white-collar crime a fascinating subject in its own right. This is notwithstanding its horrendous cost to the community, organisations and to individuals who might be both victims and perpetrators.

As the article covers a number of topics with appropriate stories, I suggest this may be a valuable read for those interested in the concept of white-collar crime and coming to grips with its complexity.

Contracts must be built on ethics, because they can even confuse lawyers like me

Clare Payne

30 Sep 2018

Claire Payne's article about contracts appears to be based on those prepared for the banking and finance industries. Notwithstanding this focus, many of the issues raised by the author also apply in the B2C (business to consumer) and B2B (business to business) environments when extending credit or completing customer projects.

There have been many changes to Legislation and a focus on unfair contracts in recent times. The author's article is a timely warning that your business contracts need to be both relevant and ethically fair. To rely on old contracts which contain unrealistic rights and penalties, are poorly constructed, with terms which you don't understand or are basically unfair, is a waste of time and money.

Therefore, reading this article may be of value in helping you understand the importance of having up to date and professionally prepared contracts for your business.

Norm Grill: How to make accounts receivable pay off

Norman Grill

12 Jun 2018

If you sell goods and services on credit, you must ensure your customers pay your invoices within agreed terms. Unfortunately, not all customers pay promptly within agreed terms.

No longer can a business afford to have invoices which should have been paid, sitting in the Debtors Ledger waiting until the customer decides to pay. A proactive mind-set and proven strategies are required to ensure you get paid in a timely manner. As cash is the lifeblood of your business, it does not help to have your cash sitting in your customer's bank account.

Norm Grill's article provides information about developing the right mindset and strategies to assist with getting unpaid invoices paid more quickly. If you need help in developing the mindset and strategies to get your outstanding invoices paid, this article may be of value.

Many ways that employees steal

Martha Myron

8 Oct 2017

Martha Myron's article is a timely reminder about an issue many business people would rather not consider, the enemy or fraudster within their business. Unfortunately, it is a sad fact, not all your employees will add value to the business. Incidentally, we are talking about all employees within the business, including those in management.

As you read the article and start to think about the implications, it soon becomes obvious, that all businesses can be negatively affected if the wrong employee is employed. How do you try and employ the right type employees to avoid such stealing from happening in your business? That is a question which is for another time, but certainly worth exploring.

If you would rather not think about your employees stealing from your business, sadly this head in the sand concept could well cost you badly. Now is great time to consider this issue if you have been avoiding the issue and reading Martha Myron's article could well be worth reading as a starting point.

Transparency of tax default data is a win for small business

Colin Porter

21 Apr 2017

Colin Porter of CreditorWatch has provided an article with a timely warning about a new initiative from the Australian Taxation Office and its potential ramifications.

In effect, the ATO will be contributing information to credit reporting bureaus about Australian Businesses with unsettled tax debts exceeding $10,000 that are overdue 90 days.

If you are unfamiliar with this Legislation and the potential benefits and negative consequences, you may find value in starting your understanding of the potential impact on your business from reading this article.

 

Contract ambiguities: Do you know for sure who owes you?

Lovetts Solicitors

2 Feb 2017

Lovetts Lawyers from the UK, have prepared a blog about the importance of knowing who you are trading with when extending credit.

Irrespective of the fact that Lovetts are based in the UK, the message of this blog applies across any legal jurisdiction or in any country. Extending credit is not without risk and if you can reduce the risks, then this is a worthwhile objective.

You may be suffering from slow-payers and cannot identify the trading entity, or who had authority to sign the purchase order or trading documentation in order to take legal action to recover your debts. Maybe you suffered bad debts in the past, or alternatively you are setting up a new business.

If this is the case, or just want to take the next step in tightening up your trading documentation, then this blog maybe a good place to start the process.

10 Risk Factors Impacting Cross Border B2B Payments - Post I

Leslie Stroh

26 Oct 2016

It seems nearly every government export department and trade professional are advocating exporting as a way for your business to increase sales and revenue. This may be the case for your business.

One of the core problems you will face if you decide to go down the export path, is risk. Too often the advocates of exporting, highlight the benefits and minimise the risks.

In this brief article by Leslie Stroh, there is a list of 10 risk factors to consider when exporting. You may have to access other sources of information to adequately equip you with an understanding of each factor. However, as a starting point, this article may be worth a read if you are interested in increasing your sales and revenue via exporting.

When Tough Performance Goals Lead to Cheating

Colm Healy and Karen Niven

19 Oct 2016

Colm Healy and Karen Niven discuss a recent research project they conducted which tested the goal setting process for organisations. The ethos behind the goal setting within any business, is of extreme importance. In addition, the part culture plays within the organisation is another essential factor in the success or otherwise of the goal setting process.

The subject and of impact goal setting has on employee behaviour, is especially in today's business environment. All too often we see yet another well-known business or government organisation being caught out due to the unethical behaviour of its employees.

Goal setting is a valid and valuable part of the business process, it completed properly. If you get the process right, you can motivate your employees to achieve their targets which benefits all stakeholders. Get the process wrong, and there are big penalties which come in to that will impact on your business negatively.

If you are unsure of the importance in goal setting within your business, this article could be of value in helping you understand the process.

Building Good Referral Karma: How to Generate More Business Through Your Happy Customers

Michael Griffiths

23 Sep 2016

Michael Griffith's article is focused on the value happy customers add to your business, particularly in the area of referrals and in providing positive comments on your business.

When you read Michael's strategies on how to keep your customers happy, you start to realise that these strategies are also important for your business in other ways.

Happy customers don't just refer others to your business. They are also more likely to pay on time, forgive occasional mistakes, and continue to make enquiries which you can utilise to improve your business processes. Equally important, they do not go online to berate your business for inefficiencies which damage your business's reputation.

If you have lost your way or had not realised the value of happy customers to your business, this article may be a good start to reinvigorating how you deal with your customers.

The Future of Payment Transactions and the Unprepared

Daniel Burrus

16 Sep 2016

Daniel Burrus has written about the increasing use of new payment methodologies in the coming years. He is probably right when he advises digital payment systems are going to be the norm for the future.

There are an immense number of issues which business people need to get their heads around, because as we know in life, nothing is simple. Whilst the use of digital transaction methodologies is attractive in theory, they do have associated risks. Accordingly, it is a wise business person who takes the time to understand the issues before blindly accepting digital payment policies are right for their business.

Daniel Burrus's article may be a good place to start if you are going down the digital payment path to try and ensure you understand all the benefits and pitfalls of modern digital payment methodologies.

BHS losses could have been reduced by good credit management

Credit Man

31 Jul 2016

BHS was a UK retailer with a history going back 88 years. Recently the retailer was put in to Insolvency Administration with massive debts.

This article is not just a story about the value of good credit management practices, many valuable other business factors are illustrated. The business issues raised are (i) the impact on your business when a major customer goes out of business, (ii) the flow-on effects to other businesses, (iii) the cost of trying to find additional sales to replace the losses just suffered and (iv) the importance of not seeking just one or two major customers.

I suggest the value of this article lies in the many business messages of loss which can be suffered when a major customer goes out of business.

High-tech vigil aims to deliver safe bet

Patrick Bartley

18 Jul 2016

Irrespective of whether it is in our personal lives or in business, keeping secrets is increasingly difficult. In this article, Patrick Bartley sheds light on how racing stewards in Victoria are using technology to identify potential illegal behaviour.

The use of technology is increasingly of help for the guardians who are in charge of looking after the wellbeing of our society as they track down the perpetrators of illegal and damaging behaviour.

In business, with increasing use of technology and in particular, Cloud based accounting and business systems, keeping business secrets will be increasingly difficult.

The value in reading this article is that is yet another example on how the power of technology can be used to identify unethical and criminal behaviour which may otherwise remain hidden.

The 'Autonomous Customer' paradox; customer service is more vital than ever

News release by BT and Avaya

21 Feb 2016

In the modern age, the customer who wants everything is the norm. For instance, those business people who sell on credit, usually find the customer believes they have the right to change the terms of trade or not pay at all.

The situation is exactly the same from the modern autonomous customer who approaches your business. They want everything their way. If you don't offer almost every interactive contact method known to man or woman, then your business may miss out. Despite adhering to their demands, there is still no guarantee they will transact any business with you.

As in all things to do with business, nothing is simple. Furthermore, the customer is not always right. As a consequence, if you believe you must comply with the autonomous customer's demands, then doing it right is essential.

This brief article, with an option to download a PDF white paper, may be of value if you decide your business must cater for the autonomous customer's every need.

The Secrets To Building A Strong Business Credit Profile

Ty Kiisel

22 Jan 2016

Ty Kiisel from the US explains the importance of keeping a good business credit rating as well as a personal rating. In Australia, the same situation exists for people who also are in business. Even in this day and age, many people do not understand that when in business, your creditors and potential creditors will seek to have the authority to access your consumer and personal business file, as well as that of your business.

When operating a business that relies on the good will and credit of other organisations, maintaining all your credit related files in good order is of critical importance. With a bad record in one file, this record could easily preclude you from credit facilities on the best terms and interest rate for your consumer and business needs.

Ty's article includes a number of valid reasons on why a good business credit rating is so important. If you were unsure on how to maintain a credit rating in all your accounts, this article may be worth reading.

Red Flags Of Potential Collection Problems

Dean Kaplan

11 Jan 2016

Dean Kaplan is an experienced business professional and debt collector from the US. In this article, Dean provides a number of red flag indicators which may indicate future cashflow problems for your customer.

These same indicators are observed and applicable within the business environment of any country. For instance, I suggest other experienced credit professionals, debt collectors and insolvency practitioners from all countries would have seen similar red flag indicators during their careers.

Dean points out there are other indicators which may be useful in specific situations which he has not detailed. Educating yourself to be on the alert for any unique red flag indicators which are applicable for your industry, is just as important.

A useful aspect of this article are the explanations which are included to illustrate the problems behind the red flag indicators.

In the turbulent business world of today, being aware of the indicators of customer cashflow problems is an essential component of business survival and to reduce unnecessary costs and bad debts.

If you are unaware or would like to refresh your knowledge of the red flag indicators of cashflow problems, this article may be of value to you.

What Do You Mean That the Creditor Will Not Sue!

Martin F. Goldman, Attorney

10 Aug 2015

Business is its own art form. Amongst the tools an artful business person will use to collect their accounts from recalcitrant debtors, is legal action. Taking legal action can be expensive if used badly, just like any other business tool. Using legal action as it should be used is often the difference between making a profit or a loss.

I am not suggesting all debtors should be sued for all outstanding debts. Knowing how and when to take legal action is the important issue. If you always run from a contest at the legal action stage, then you are unlikely to come to grips with use of legal action. Furthermore, and inevitably, you will continue to lose money unnecessarily.

In my experience, the business people who know how to use legal action properly are generally good business artists. I also believe they operate more profitable businesses over the long term, than the business person who is always afraid to take legal action.

If you are unsure of what I mean, reading this article is a good place to start when thinking about legal action. The writer has declared their vested interest in this subject and his desire that more business people consider taking legal action if appropriate. However that should not distract you from looking at some of the more positive reasons why, on the right occasions, legal action is effective.

Trade credit insurance

Holman Fenwick Willan LLP - John Barlow, Graham Denny and Daniel Martin

4 Aug 2015

Trade credit insurance is a form of protection against the losses which may result from dealing with slow-paying and financially challenged customers. Whether it is a viable proposition for your business, is another matter. Nevertheless, it is worth considering whether trade credit insurance should be part of your risk management policy.

Many business owners and managers unfortunately have a misguided view of how trade credit insurance operates. Consequently there can be issues between the expectations of policyholders and the actual workings of the insurance policy. Like all insurance policies, there are requirements and responsibilities which must be met by prospective policyholders before the insurance policy becomes valid.

If you are unsure about trade credit insurance, and would like a general introduction, this article may be a good place to start. As always, you should seek professional help when in doubt.

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