Published by Credit Matters Pty Ltd.
Welcome to Credit Matters Newsletter for February 2014. Our monthly newsletter contains information about financial risk management issues, blogs, advice of new business listings and free advice from organisations such as ASIC.
You can always view past copies of our newsletters via our website at www.creditmatters.com.au
This Month's Business Conundrum looks at the concept of customers who slow pay their suppliers because they are short of, or want to conserve their cash. There are a number of business practitioners who advocate this policy as being good business. However, rarely do these same practitioners explain the pros and cons of this practice. Rather they believe preserving cashflow at all costs is more important than paying your suppliers in a timely fashion.
If you are upfront with your suppliers, and request their acceptance of a temporary late payment, this is acceptable. It is just good manners and a normal part of business to let your supplier know if you have a temporary cashflow problem. The acceptance or non-acceptance of your problem is also a good measure of the supplier's willingness to work with your business.
However if you just arbitrarily slow pay your suppliers, there are several problems. Obviously the first is; the risk to your business's financial creditability. The second problem is; instead of clearing a liability when you had the cash, the liability remains in your books. History often shows us Murphy's Law then kicks in and suddenly there are increased demands for your cash.
So you have gone from being able to pay, clear a liability and keep your financial reputation intact, to where you have cashflow problems exceeding your ability to pay your liabilities in a timely manner.
Remember the "... saving cash at all costs?" Well now the costs are starting to add up and you really have to ask yourself "Was slow paying your supplier without asking for their acceptance or because you thought it a "smart business practice", really the best policy?"
Credit Matters provides access to blogs written by Kim Radok. Just go to www.creditmatters.com.au to read these and previous blogs.
Since our last newsletter, we presented the following blogs.
Credit Matters is a financial risk management resource centre for the Australian business community. If you are in business, Credit Matters is your ideal source of financial risk management solutions.
"Cheers, Crime Pays" headline from the Herald Sun 12th of February 2014
THE LATEST ASIC UPDATES
You can now log in to ASIC Connect with your AUSkey.
Senate Inquiry - Opening statement 19 February 2014
Speaking notes from Greg Medcraft, Chairman, Australian Securities and Investments Commission, opening statement to the Senate inquiry into the performance of the Australian Securities and Investments Commission.
ASIC accepts enforceable undertaking from former director
We have accepted an enforceable undertaking from Mr Manish Babulal Jani of Ryde, New South Wales, a former director of AIE Fiduciary Services Pty Ltd, which prevents him from managing a corporation for five years. 14-033MR. 19 Feb
ASIC information sheet on whistleblowers and whistleblower protection
We have released information about our approach to dealing with whistleblower reports. 14-032MR. 18 Feb
Perth director pleads guilty
Perth director, David Alan Zohar, has pleaded guilty to three counts of providing false and misleading information to the ASX. 14-031MR. 18 Feb
Decision in Walton liquidators’ independence hearing
We note the decision today of the Federal Court of Australia following our application to have the liquidators of the Walton Construction group removed. 14-029MR. 13 Feb
ASIC accepts enforceable undertaking from Sydney-based auditors
We have accepted an enforceable undertaking from two Sydney-based registered company auditors, Martin George Thompson and Allan Ni Kwan Kwok of Wong & Mayes Chartered Accountants. 14-028MR. 13 Feb
ASIC LAUNCHES ONLINE HUB FOR SMALL BUSINESS
Small business owners and operators have a new online hub to help them better understand their legal obligations and the role of the Australian Securities and Investments Commission (ASIC).
The hub, which is available at www.asic.gov.au/small-business, features information on starting and closing a small business, legal requirements for small business operators, one minute guides on popular topics and access to ASIC’s new quarterly small business eNewsletter.
A free smartphone app developed by the Australian Securities and Investments Commission (ASIC) will help business owners undertake important checks before they enter into business transactions with other organisations.
For more information ASIC APP INFORMATION
Credit Matters is continuing to grow and provide marketing and knowledge about financial risks to the Australian business community.
Furthermore, 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 Click to see email
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 Click to see email for options.