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

Customer service

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.

Ingraining an environmentally sustainable mindset in-house

Jerome Doraisamy

27 Jul 2019

Jerome Doraisamy reports on a presentation by Katrina Bullock on how important that lawyers be aware of the issues regarding a sustainable approach to business in case their customers approach them for advice on the subject.

Ms Bullock's theme is that a business needs to understand how the evolving issues relating to operating a sustainable business are so important for directors and owners these days. Operating a business sustainably is so much more than just a marketing ploy. There are many other issues at stake when operating a competitive business in today's business environment. It also important when seeking legal advice, you always should seek a lawyer with the appropriate qualifications.

This theme of operating a sustainable business is nothing new as I came across an article from 2007 where this subject was raised in an article from BusinessWeek Online. It is an interesting article in itself because you are able to compare the history of the businesses quoted which said they were looking at operating sustainability. You can find the article at https://www.bloomberg.com/news/articles/2007-01-28/beyond-the-green-corporation however you may have to become a subscriber to view the article in full.

I suggest that if you still doubt the value of operating a sustainable business, reading Ms Bullock's article may be help you understand how important it is and to also have access to the right advice.

Pick up the phone!

Ingrid Maynard

30 May 2019

The author Ingrid Maynard, highlights one of the key elements of good business, being able to use the telephone. Ingrid further articulates the reason why telephone calls are so effective.

Today, it is not just salespeople which seem to have trouble picking up a telephone and talking to another person. This issue is across the whole business spectrum from management down. Too often, it seems people at all levels of business are almost frightened about making a telephone call. We also note that too many business websites appear to lack a telephone contact number or if you do make the call, speaking with the correct person is also a challenge.

Yet picking up the telephone and saying, "There seems to be a problem with ... can you please help", making a warm contact for a sale or trying to close a sale, is so effective.

Irrespective of whether you are in management, sales, accounts receivable or customer service, the telephone remains one of the most useful tools in business. If you have trouble understanding why a telephone call is so valuable, I suggest reading this article may prove helpful.

Better A Year Early Than A Day Too Late

Adam Taggart

5 Feb 2019

As the author, David Taggart suggests, trying to predict the timing of disruptive events is a fool's errand. Very few people can predict the exact time of a future disruptive event. We can predict what might happen by looking at the causes of historical events and what is happening around us. In such cases, even if our predications do not eventuate in full, those that acted early can gain an advantage.

Mr Taggart offers the following example of people who paid attention in the years leading up to 2008. These people had arrived at the conclusion that bad policies and overly-loose lending standards had resulted in bad situation which would eventually lead to real problems. Did these people know the date of the tipping point? No. But they knew the probability for a major financial crisis was a certainty.

He goes on to suggest, the people who positioned themselves early avoided the losses that everyone else suffered and a few, even made massive profits.

Today we face a similar situation with an expected business down turn in 2019 and 2020. There may even be a recession. Do we know when this downturn or recession will actually be declared? No, but that does not stop the more prudent of our fellow business and social acquaintances starting to take precautions to protect their business and other assets.

Waiting for the exact date of a disruptive event is never wise. Irrespective of whether you believe we are about to have only a downturn or a full-blown recession, it is better to consider a more cautious approach in the coming year. On that basis, reading Mr Taggert's article may be of benefit in helping you decide whether to start taking action before the effects of any downturn impact negatively on your own situation.

 

The Best Payment Reminder: Top 10 Strategies

Jan Reeves

14 Nov 2018

Jan Reeves is a proven credit management professional. She has prepared a list of 10 strategies that have worked for her over the years when following up on unpaid invoices to improve cashflow.

Like Jan and myself, we never stop learning. We are therefore always on the lookout for new strategies on how to deal with our customers regarding unpaid invoices.

 If you are looking for new strategies to use with your customers and improve your business's cashflow, reading this article maybe of value.

Avoiding Friendly Fire: Working with Sales People

29 Aug 2018

The author of this article is unknown, however the message advocating credit and salespeople working together is as important today as it has always been.

There is considerable evidence, when the two departments work together, sales increase and additional benefits accrue to the business.

There will be always a level conflict at times between the two departments. It is encumbered on management to ensure that these conflicts do not develop in to adversarial exchanges. It is in such circumstances, which creates a toxic culture which causes negative consequences for the business as a whole.

To assist in avoiding the development of a toxic culture, nine (9) strategies are suggested which can assist in reducing adversarial contacts between the two departments.

If you wish to create a more collegial working environment in your business, this article maybe of value in helping you to achieve this objective in 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.

28 Days Without a Bunnings Sausage: The Impact of a Cashless Society on People and Business

Dave Deveny

13 Mar 2018

Dave Deveny tried an experiment on living without cash. One of the key aspects of this short term experience was it was conducted by a convert to the digital world.

There were many useful insights on what it means to go without cash in this article. If there was aspect which was not covered properly is the question which Dave does not propose or answer. "How would I survive in the long term without complete access to cash?"

As Dave rightly points out, although he managed satisfactorily for the 28 days, he pointed out there are a number of costs and disadvantages in cashless environment. One of the most striking aspects was to note how many simple pleasures he was denied in his "cashless world".

I suggest this article raises more questions about the negatives of a "cashless world" than perhaps was intended. On that basis, perhaps there is much more to gain from this article than simply accepting the story as told at face level. For instance, at the end of 28 days, Dave could go back his normal world with a mixture of cash and digital access. In the future, we may not be so lucky.

To weather reputational storms, get caught doing the right thing

Julian Friedland

9 Feb 2018

Julian Friedland's article is a timely reminder that maintaining your personal and business reputation is always important. In fact, it is worth dollars in the bank. Maintaining your good reputation in today's hectic business environment requires strong discipline and vigilance on what you do and say.

This article also a good follow up on a previous article highlighted recently on Credit Matters on why arrogance is a corporate sin. The link to this article is https://www.creditmatters.com.au/invaluable-reading-risk-management/#112

The loss of reputation affects the individual or their business across a whole range of different aspects, including cashflow, access to finance, sales, customer respect and referrals etc.

I suggest there are a number of useful reminders in this article of how easy it is to lose your reputation. As such, it may be of value in helping you protect your reputation.

Why arrogance is a corporate sin

CPA Carerer Mentor

27 Jan 2018

There is a fine line between confidence and arrogance. This article is focused on arrogant people within the organisation and why an arrogant attitude causes so much damage. The truth is everybody needs a certain level of confidence and self-assertiveness to survive and succeed.

Likewise, the owners and managers a business also need a positive business culture of confidence and self-esteem to survive in business over the long term. However, just as it is for the individual, nothing is as destructive for the business as the development of an arrogant attitude towards its stakeholders.

The factors of why arrogance is so dangerous for either an individual or a business are briefly explained in this article. Accordingly, I suggest there may be a benefit in reading this article for those in business, which may not understand the difference between confidence and arrogance.

Time for ‘prudence’ to make a come-back?

Alistair Kay

24 Nov 2017

Consumer debt is on the rise globally and this situation has potentially negative implications for all businesses.

Alister Kay's article, originating in the UK, could well be written by an author from any country today as the basics are similar.

The focus of the article is about a change in lending practices of the banks and finance companies which offer consumer finance products. However, this article is also a sign that organisations offering B2B credit to their customers, would be wise to rethink their own lending practices. Yesterday's lending practices in both the consumer and B2B worlds, are often no longer applicable or practical.

This article may be of value therefore, if you are looking for the clues that would encourage you to review your own lending practices to meet the future business environment.

What An Experience

Paul McCarthy

26 Sep 2017

Too often, business people only think about marketing their business when selling goods and services. If you only market one part of your business and not the business as a whole, it is similar to somebody dressing professionally from the waist up and if they are on holiday from the waist down. It is not a good image.

The marketing of your credit, accounts receivable and payable management as professionally operated and an asset to your business is worth dollars in the bank. Too many business people however, fail to see the importance of these areas to also reflect a positive holistic image of their business.

Paul MCCarthy's article is worth reading from too perspectives. The first is to create a test to verify the image perceived by suppliers and customers of your business. Every business needs suppliers and customers to survive and grow. Second, if your test suggests your business could do better, this article is a useful guide on how to improve your business's image.

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.

Create Memorable Customer Experiences with These Strategies

Kim Niemi

27 May 2016

Kim Niemi writes about one of the major disruptors in business, the customer experience. What are customers really looking for? We know one factor is the cheapest price. However, are there other factors which influence their decision making which you can use to influence their decision making positively?

Kim writes about what she considers to be the five most important factors. By focusing on these issues, she believes you are likely to attract more customers. Furthermore, I respectively suggest, by considering these issues properly with an open mind, you will also have a much better business organisation.

The five same issues which Kim writes about not only attract customers, they are also applicable when it comes to running a profitable business.

If you are failing to attract or keep your customers, this article may be a good place to start in rethinking how you do business.

ARE YOUR SALES & FIELD STAFF THE CREDIT DEPARTMENTS EYES & EARS

Graeme Skinner

6 Apr 2016

Graeme Skinner's blog is based on one of the oldest themes of business, “A sale is not a Sale until it’s paid for”

Your salespeople are often the first of your employees to see what is happening within your customer's business. Graeme provides indicators of the type of evidence which your salespeople might notice and could reveal the customer may be experiencing difficulties.

Any indications that a customer's business may have problems are valuable and are generally the warning signs that they may be struggling financially. It is imperative this information is provided to the credit department in order that can institute actions to reduce the level of any potential debt.

Your salespeople are part of your business's team which need to be trained to look for signs of your customers' well-being. It is of no value however, if the indicators of any problems are not reported to your credit team members.

If you need a starting point or a brief refresher on the importance of sales and credit working together, this article is a suitable source of this information.

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.

Some Customers Are Not Worth Doing Business With

Shep Hyken

16 Jun 2015

Shep Hyken presents a blog discussing the concept "that all customers are right!"

As a credit management professional, I know the problem caused by customers which are not right. I see such issues through the blatant changing of payment terms, constantly raising invalid credit claims and the reasons used to justify their slow payment behaviour.

Mr Hyken raises two more important aspects of dealing with the wrong type of customer. His view is that bad customers (i) suck the energy out of your employees and therefore this can lead to (ii) the destruction of your organisation's culture.

You probably know the feeling you have when dealing bad customers. There are some customers who seem to believe they have the right to use your goods and services and not pay for them on agreed terms. In addition these customers try to blame your employees for any issues which are clearly the fault of the customer and not of your business.

As Mr Hyken advises, bad customers destroy value and it is perfectly okay to "sack" them.

If ever you need support in dealing with bad customers and wonder if they are worth keeping, perhaps you should have a quick read of this article. It just may help you say "not every customer is right all the time!"

The Thank You Experiment

Jeffrey Slater

7 Jun 2015

Thank you is so easy to say and the effect lingers long after it is expressed in gratitude. However many people forget to say thank you.

We live in a fast paced world, crowded with people, noise, and information. Therefore how do we stand out in such a world so that people want to do business with you? Saying thank you is one of the few actions we can take and costs so little.

Jeffrey Slater provides a nice story on the value of saying thank you through his story.

If you have forgotten how to say thank you, why not read Jeffrey's article and try it yourself?

Are you prospecting or just making noise?

Gregory Ferret

20 Apr 2015

How many times do we receive a poorly framed sales call, which is nothing more than a prospecting contact which annoys the hell out of you? Unfortunately it happens far too often.

The problem in business today, is that sales people are often employed for their willingness to try anything to get a sale, rather than for their sales professionalism.

Regretfully we also see this practice currently occurring in other work professions. However I transgress.

Returning back to Greg's article, regrettably many non-professional salespeople and other salespeople who are desperate for work, no longer seem to understand the difference between the two types of contact. Therefore it may be interesting to ask a salesperson, "Are you prospecting or are you making a noise in the hope of making a sale?" I respectfully suggest, many salespeople would be unable to answer this question with confidence.

You may have salespeople within your firm who can fill one of these roles successfully at the moment, but not both. To add value to your existing salesforce therefore, assisting them to be successful in both roles would seem to be advantageous. If you are looking to review your work practices and to have your salespeople act more professionally, I suggest Greg's article is one source worth reading.

PS: As an example of the difference between a sales prospector and a salesperson, I have a friend who is a fantastic sales and business prospector. Sadly, I would not trust my friend to represent any company as a salesperson.

 

11 Secrets of a Successful Website

Ron Stark

11 Mar 2015

The eleven secrets which should be considered when building a successful website according to Ron Stark could also be considered in building your own business. People about to start a business, or those wishing to re-evaluate their business, are advised to complete a business plan.

Aspects of all business plans contain similar topics as those covered in Ron's list. The benefit in using this list of topics as part of your review is the language used. Ron uses topic headings which look less threatening to people not familiar with business and accounting terms and the issues of creating a business plan.

Many people enter the business world believing once they have created the business, nothing much changes. Unfortunately for these individuals, yesterday's business model, does not always survive over the long-term. Whilst the original business model might have been successful, that model may no longer be suitable for the current business environment. 

Irrespective of whether you are a newcomer or an experienced business person, evaluating your business from time to time, is part of doing business. If a business plan is perceived to be too big a challenge, perhaps using this list of 11 secrets is another way of undertaking the task. Ron says of websites, "A successful website is one that delivers what you expect of it." Therefore it may be a useful exercise for you to ask yourself periodically "Does my business deliver what I want?"

If your business is not delivering according to your expectations, it would seem to be a wise decision to complete a review using the 11 secrets as a guide or a fresh business plan.

Promote Your Business

Credit Matters Business Club - Professionals When You Need Them

If you are a specialist supplier of financial risk management products and services, then you need to be listed in Credit Matters Better Business Club.

Read More
Promote your business with Credit Matters
IMA Bronze Member Supporter