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Credit Matters
What's New At Credit Matters?

What's New At Credit Matters?

In this month’s edition of the IMA’s Agent, my article titled “The Great Reset” provides some thoughts of how debt collectors might review and adapt to accommodate a future collections framework. As you can appreciate, I was pleased to see my thoughts in print. Hopefully they are also of value to you.

Our new feature about understanding the positives of RISK is available via our website.

Early next month, our quarterly update on the recession should be available via our website.

Attached is another helpful brochure update from the Australian Small Business and Family Enterprise Ombudsman, and our brochure On What's A Criminal Look Like. This is meant as another timely reminder in these troubled times when crime in all its forms is on the rise.

As always, if you wish to promote your business services at an affordable rate, contact Kim at You will be surprised at the value we have to offer.

Quote Of The Month

Quote Of The Month

People are neither always good nor always bad, but always subject to influence

Diary dictum

Monthly Business Observation

Monthly Business Observation

In our July newsletter we mentioned that in a recession, it would show us the best of times for some people and the worst of time for others. Herein lies the problem for all businesses. There will be those which will do so well, they will allow their customers to steal from them. Other businesses, retail for example, will see their customers steal, either because the customers were thieves by nature, or others felt they had no other option in order to survive.

We have seen this stealing for survival aspect in the food riots, looting and store takeovers from the days of the GFC onwards in Europe and in South America.

The businesses which allow their customers to steal from them

There will be businesses which do so well, even in this recession, they will become blasé about their good fortune and great profits. As a result, they will relax their business disciplines and deem that spending on risk management can be reduced. These funds will probably then be used for dividends to keep shareholders “happy”, or used for takeovers, marketing, or on bonuses to salespeople and management. Unfortunately, rarely will these funds be used to pay down debt, or saved and kept for a rainy day, or for unforeseen problems.

Due to the relaxed thinking of management, their businesses will sell to new customers with the minimum of due diligence, and/or, their customers will come to realise that prompt payment is no longer necessary. In either case, payments will be delayed. As a result of the slackening in business disciplines, outstanding monies will blow out and debts in customer accounts will increase. Alternatively, management will be afraid of upsetting customers and believe that if they try too hard to bring down the debt levels, their customers will leave for the opposition.

The businesses which ignored the pitfalls of extending B2B credit

Those businesses which ignore the new world of B2B credit, will soon be in trouble because their cashflow and profits suffer from non-paying customers. In prosperous times, prior to 2019 for example, many businesses tended to take due diligence as an afterthought.

There was also the thought at that time, extra sales would soon soak up any losses from bad debts. However, in a recession, there are rarely any extra sales, apart from a few specific and lucky industry sectors. When there are fewer sales, often with a reduced profit margin, such as in the construction industry, that is when businesses run out of cash with only bad debts to show for their efforts.

The businesses which failed to understand debt collection, is more than debt collection

Debt collection is no longer feared by many of your customers because they KNOW, most creditors will never sue them. This situation has come about for many reasons. One of these reasons is that owners and management teams had one or two bad experiences and then declared, “… legal action is a waste of time”. This type of thinking then morphs in to the concept that debt collection is a waste of money, which could have been better spent on marketing and sales initiatives.

What many businesspeople forget is that debt collection is not just debt collection, it is part of an ongoing asset protection strategy. If you understand that fact, there are many forms of debt collection which are now available to protect your business’s assets. Incidentally, you can only take further action if you have proper documentation signed off by the customer and funds available in a contingency account.

This is a subject too large and complex for a simple article on this occasion. The main focus of the article has always been to try and understand the motives and reasons behind how and why people steal. The fact remains, the majority of your customers do in fact steal from you because you allow them to, or they are natural thieves, or they believe there is no other way to survive.

Monthly Business Conundrum

There is no doubt digital and technology will play an increasing role in business. Whether this will lead to better business outcomes in all cases is problematic. As we have already noted, the digitally enhanced business often has many costly problems. There is, at the end of the day, no substitute for additional quality employees which can relate to your customers, can quickly and clearly answer their questions and resolve any problems.

As such, certain aspects of the old rules of business are still valid today as much as they were yesterday. Adhering to a number of the old rules of business, alongside the use of proven technology, will be the way forward.

These rules will always include interacting with your stakeholders in a timely manner with good manners, politeness, showing empathy when required, and listening properly to them. Apart from these rules, you will:

  • reconcile all supplier and customer accounts regularly – preferably monthly;
  • supply the right goods and services plus raise invoices promptly and send as required by your customers;
  • keep your customer information up to date and relevant;
  • answer all enquiries within 24 hours – not 48 hours or a week later when it suits you; and
  • promptly follow up all unpaid invoices.

These old rules of business, often ignored currently, will always add value to your technical and digital strategies, plus help your business stand out from its opposition. In a recession, there is no more powerful way of increasing sales and profits, and thus surviving, than by standing out from the opposition and following these old rules.

Monthly Business Conundrum
This Month's Business Inconvenient Truth

This Month's Business Inconvenient Truth

A business cannot exist with just its existing customers. It always needs to find new customers to supplement its existing ones. However, having said that, one source of new business, is from former customers on your business’s customer list.

Irrespective of whether your business is experiencing good times or bad, or whether there is a recession, your customer list contains a gold mine of opportunities to contact for further business. The proviso of course, is that you complete the task of seeking business from these customers properly.

Too often, your existing customer list is ignored and rarely explored for future business. The reasons include inhouse preconceived prejudices, a lack of quality contacts and personnel, plus a lack of time. Time is a major problem because you need to properly check and assess whether these former customers may be of value.

There is one major advantage of reviewing your former customer list when looking for new business. This advantage is that you should have enough information to make the initial reconnection with a warm contact, rather than a cold call.

In today’s world, you need every possible profitable customer you can find to help you increase your sales. Reviewing your own customer list and identifying which customers may be of value, is one source of new business, if done properly.

I learnt a new word lately for a business practice called "juniorization”, which basically means, replacing experienced people with younger people. We have also seen and learnt about another concept, “ageism”

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Future Opportunities & Possibilities

Credit Matters is continuing to grow and provide marketing and knowledge about financial risks to the Australia business community.

Futhermore, we invite marketing and knowledge ideas from our readers and contributors on how we can assist our respective firms grow. If you have any ideas, please contact me at

If you are interested in finding new ways to reach your marketplace, why not try Credit Matters. Our prices for advertising are very reasonable and advertising packages are on offer to make any cost, even more affordable. So if you are interested in reaching your customers at the right price, please contact Kim at for options.