Credit Matters Newsletters

Welcome to 2018 and our first newsletter for the year. May it be a good year for you.

It was hoped to have our new newsletter format ready, but alas, we just ran out of time. All things being equal, we should have the new format ready for our February newsletter.

Advertising via Credit Matters

If you are interested in reaching business prospects who need your services or products, contact Kim to see what he can do for you. There are many different opportunities to advertise your business via Credit Matters and it may not be as expensive as you might imagine.

In this newsletter, you will find the following offerings: the AICM training courses for Feb-March, details from ASBFEC regarding developments relating to fintechs, The Cashflow Train brochure from CreditorWatch, What Is Bugging You? from Absolute Facts and Investigator Upgrade.

What of yesterday's business practices are valid for today and tomorrow?

As we rush forward into tomorrow's technological world, it is tempting to think that all of our business practices of yesterday, are now out of date and invalid. Unfortunately, with such thinking, businesses often change their business practices which have served them well over the years. Those practices and norms which never lose their value can then be discarded. In other words, as the old adage goes, "... they throw the baby out with the bathwater"

Technology does without doubt, offer many benefits. There are many also many potential problems with technology which are often overlooked in the rush to adapt to the new world.

The conundrum for all business people is to understand what are the good business practices and norms of yesterday, which are still valuable today and will continue to be of value in the future.

In December I wrote a blog  The 10 Principles of Sound Credit Management  of which the 10^th principle was A Social Media Policy.

It would appear to have been a timely written blog as this month’s quote reminds us.

Social media is already used by many due diligence professionals as a source of information about suppliers, customers, employees and other potential stakeholders. Debt collectors, skip tracers and fraud investigators also use social media as a research facility. These users are looking to obtain information which may not be readily available from other sources, or to verify existing information.

On the other side of the creditor-debtor relationship, we have seen many negative debt collection stories over the years from the consumer finance environment.

When we review the use of social media over the years, we see how people do not seem to care what they post on social media. Legal rights, personal data and behaviour all seem to be fair game and common sense is often missing from those posting stories.

History also reveals that what goes on in the social environment, soon transcends in to the business environment. For example, we see how people seem to believe they are entitled to all sorts of rights, irrespective of their responsibilities.

Nowhere do we see this state of affairs more pronounced than in the consumer finance world. Many debtors now try to avoid their consumer finance contracts based on an entitlement belief that they do not need to honour their consumer finance contracts.

This entitlement behaviour is starting to appear in B2B finance where business people seem to believe the trading terms they agree to in writing, do not have to be honoured.

I suggest therefore, it is only a matter of time before B2B creditors start recording their anger and frustration on a lack of payment from their customers via social media. It would also not surprise me if we started to see stories about creditors which do or do not follow up on their unpaid invoices, or promptly answer customer enquiries on any unpaid invoices.

What are the ramifications for business creditors and debtors if these scenarios start to appear on social media?

We have all seen how quickly bushfires burn and the damage they cause. Well that is almost at snail's pace compared to a bad news report on social media. Bad news on social media seems to move forward in almost nanoseconds once let out of the bag

Perhaps with all the changes in social and business norms these days, it may be sensible to create a social media policy and training for your accounts receivable and payable employees.

As we see in many of the matters reported via social media, it doesn't take much to encourage people to reach for their phone and post something these days. The behaviour of your accounts receivable and accounts payable employees will be no exception.