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

Receivable & Credit Management

Best Practices: Invoicing to get paid

Colin Porter

17 Feb 2015

One of the reasons you might not get paid as quickly as possible is because you failed to complete your invoice(s) properly. When your invoice is incomplete, it provides another good excuse for your customer to hold back payment.

Colin's article highlights the key criteria which need to be completed before sending out your invoices. In addition, as Colin also helpfully points out, create a process to ensure your invoice is completed properly. This process can then be employed to train your existing staff and any new staff appointed to the task.  

Ensuring your invoice(s) are completed properly, removes one key reason the customer cannot use for not paying you on time.

 

Statutory Demands

Adam Stewart

8 Feb 2015

One of the weapons available for use against a delinquent debtor is the use of a Statutory Demand. Used properly, it is an effective tool in obtaining payment from your non-paying customer.

However the use of the Statutory Demand must be applied correctly as it is not without certain pitfalls if not served properly.

If you would like to know more, this blog by ADC Legal offers an introduction on the Statutory Demands. Of course, legal advice must be sought to ascertain whether a Statutory Demand is applicable for your situation.

Don't Turn A Contract In To A Handcuff: The Boardroom Report

Adrian Kitchin

9 Jan 2015

If your business completes projects on a regular basis, you will probably already be aware of the importance of taking out an insurance policy on the major projects.

On the other hand, if you are a business owner or manager with little experience of the possible pitfalls of projects, you may not have thought of taking out an insurance policy for your next project. After all, not all projects are equal and many include significant risks for the unwary.

This blog raises a number of issues associated with projects which are worth considering. For instance, the importance of seeking professional assistance in understanding the terms of conditions of the contract associated with the project.

If you are inexperienced with the risks which may occur when planning your next project, this blog is worth a read as a starting place to begin the process of understanding project risk. You would also be wise to consider the benefits of obtaining insurance if there is any possibility of a material loss if the project does not go to plan.

Know your competition: Learn from their mistakes

Colin Porter

28 Nov 2014

Knowing your competition is one of the keys of operating a successful business.

Colin Porter in this article explains how you can learn about operating a better business from your competitors. In his view, you can learn a great deal about works and does not work in your marketplace.

Colin also provides his 5 tips for staying competitive.

I suggest this article is worth a read as a starting point for understanding why studying your competitors can help you operate and grow your own better business.

Good client bad client, how to tell

Jacqui James

21 Oct 2014

The point of entering a trading relationship with a customer is to make a profit. Unfortunately, too many business people are seduced by the concept of raising an invoice. Therefore when a new customer comes along they too often think of raising an invoice, not the nature of the future relationship and whether a profit will result.

However as Jacqui James points out, not all customers lead to a profitable trading relationship. Jacqui's list of what makes a good customer combined with her second list of what makes a bad customer, are therefore worth reviewing. You will be surprised how valid these lists are when you study the behaviour of your own customers.

I heard a quote many years ago which said "every mistake is a fruitful learning opportunity". Therefore I do like Jacqui's comment of  "Even a bad client turns out to be a good client. They teach you what it is you don't need."

The fact is, despite our best efforts, we all still get caught with an occasional bad client. When this happens, it is a good reminder; not all customers will add value to our business. However, these bad clients also teach us something more about our business process, if we take a positive perspective.

If you are interested in doing good business with the right type of customer, I suggest Jacqui's article is worth a read.

How To Win An Argument

Dean Kaplan

9 Oct 2014

When a dispute occurs in a business relationship, it is important to maintain a focus on the issues. Unfortunately however, these disputes can escalate into arguments. In these situations it is not unusual for emotions to rule the discussions rather than common-sense and then nobody really wins.

Dean Kaplan provides a number of strategies to avoid your disputes becoming the arguments. Whilst Dean is talking about his approach in the debt collection environment, his strategies apply across all areas of business.

It is probably worth remembering, amongst the most stressful work environments, where emotions can run wild, is in debt collection. Therefore I suggest, if Dean's strategies work in this environment, they are going to probably be effective in most business situations.

Inexperience business people or those with vested interests in the outcome, sometimes find it a struggle to keep focused on the issues during the initial stages of a dispute. Consequently these disputes sometimes become full-blown arguments. If you find yourself in these arguments and find it hard to create a win-win outcome, I suggest Dean's article is worth reading.

 

 

 

Is Your Credit Policy Costing You Money?

Dean Kaplan

24 Aug 2014

Many years ago, when I first became involved with lending and advancing credit, I was advised that a reasonable level of bad debt write offs, was sign that you had maximise selling and profit opportunities. This case was put to me during my years involved with both consumer and business to business lending.

An open slather policy on advancing credit, is usually a good way of going broke and is not advocated. However a balanced approach about why you are in business, what it takes to succeed and how you should extend credit are questions should lead you to understanding why a level of bad debts is not always a sign of a business in trouble.

Therefore Dean Kaplan's article raises a valuable business question; "Is your credit policy costing you money?"

On that basis, Dean's article is worth reading as start for re-evaluating your credit policy and or learning about advancing credit.

 

The Risk of Dodgy Debt Collection

Natalie Walker of Blitz Credit Management

5 Aug 2014

Natalie Walker illustrates a number of issues which can cause problems for the business owner who uses a dodgy debt collector. Her observations are based on a recent case brought by the ACCC.

Today there are strategies and tactics which are no longer acceptable and might be used by debt collectors in an effort to collect the debt. The dodgy debt collector will often employ such unacceptable tactics which are now illegal. In turn, if such illegal tactics are discovered, the ACCC may well take action, which allows become public at some stage.

Often, and what is often not realised by many business people, is that they can also be included in any action initiated by the ACCC. In addition, if the alleged behaviour is serious enough, the police may also become involved.

If you wish to avoid the unpleasant repercussions and bad publicity of using a dodgy debt collector, Natalie's article is worth reading.

Uncovering cash and insights from working capital

Ryan Davies and David Merin from McKinsey & Compan

24 Jul 2014

As the authors of this article so wisely articulate, managing a company’s working capital isn't the sexiest task in business. However as they also point out, it is extremely important in maximising the opportunities of improving cashflow without increasing sales or reducing expenses.

The most important part of this article is the authors' explanation of the cash which is tied up in a company's accounts receivable operations. In studying their work more closely, you will begin to realise the benefits of reviewing your accounts receivable operations.

We also find out why management and CFO's, particularly in the larger corporate companies of the world, do not concentrate on the receivables to the extent that they should.

I suggest this article is well worth reading if you are interested in improving your company's cashflow, profit and efficiencies, irrespective of the size of your business.

 

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