Credit Matters Newsletters

About 7 days after the email version of the newsletter is sent, the first audible version of our monthly newsletter will be available on the Credit Matters website at creditmatters.com.au.

Unfortunately, our revamped newsletter will not be available at this time. The ongoing development of the website has caused a temporary delay in activating the newer version. We hope the new format will be available in the next few months

Our website Home page has been amended to show details of all upcoming Conferences and Expos. Have you thought of advertising your events on Credit Matters?

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.

This month, you will find attached flyers regarding the upcoming events for the A.I.C.M., A.I.P.I. IBAC and the World Trade Credit Risk Summit.

You will also find a brochure on Telephone Skill Development. Jenny Cartwright and Kim Radok believe the telephone is today's most underrated business tool. If your sales and accounts receivable employees require additional training in the use of the telephone to maximise their performance results, contact Jenny or Kim as appropriate.

Alan Shepard's quote resonates in so many ways these days right across the business spectrum. Sadly, it also applies to the protection of cash in many businesses today. Currently, I interact with people from all levels of Accounts Payable and Receivable operations internationally. During these contacts, it constantly amazes me how poorly many business enterprises treat the protection of their cash.

Let us not beat about the bush, Accounts Payable and Receivable departments are the cashflow guardians of your business. Cash is essential for business survival. The often-repeated comments of "Cash Is King" or "A business without cash is not a business" reinforce just how important cash is to every business.

It is surprising therefore to see how many managers follow the ethos described by Alan Shepherd of using the cheapest resources possible to protect their organisation's cash. Once cash is taken illegally or lost via organisational incompetence, it is often unrecoverable. This reality seems to escape management thinking.

What are the signs where your suppliers and customers are not actively using the best resources to protect their cash?

1  The quality of interactions between your employees and the employees of the other party.

It is not unusual to find that the other party's employees cannot string two words together to create a sensible sentence or do not understand the value of manners in their written correspondence. Instead you get the equivalent of a teenager's grunt or a demand for action.

2  The ability to make contact and have problems resolved quickly.

It can be difficult to communicate with suppliers and customers quickly and efficiently. For example, you wish to advise your customer about a duplicate or incorrect payment. If you find an Accounts Payable point of contact and advise them of this payment, you may still not receive any reply asking for the money to be returned.

Alternatively, you receive an acknowledgment that your contact will be answered in "x" number of days. When it comes to being paid and having the cash to pay your bills as they fall due, can you really afford to wait these extra days for no good reason?

3  The use of technology frequently increases costs because the intellectual reasoning behind the use of the technology, is flawed.

In many situations for example, as technology is installed, qualified and experienced employees are retrenched. Therefore, when things go wrong, there are few people with the knowledge to fix the problems. It seems knowing how suppliers and customers interact with a business has no commercial value.

4 The philosophy of outsourcing for micro and small business is a practical solution if managed properly. Outsourcing the Accounts Payable and Receivable operations by large and medium sized business to overseas organisations, often only creates unforeseen costs and problems.

The fact is, no person can work for two bosses. Worse still, outsourcing these operations is akin to employing mercenaries to guard the cash safe.

It is also well known, criminals lurk near these outsourcing businesses as they are always on the lookout for any of your outsourcing business's employees to help them gain access to your accounts. When people are so poor that every dollar counts, they can easily be tempted by the lure of a few extra dollars when it is offered.

5 Management has no problems in the reconciliation of the bank account(s) to protect its cash. On the other hand, the reconciliation of supplier and customer accounts to protect the flow of cash out of and in to these accounts, is deemed not to be so important.

The truth is; if you don't reconcile supplier and customer accounts, you don't manage your cash properly. As side issue, if you don't reconcile these accounts, you also don't quickly identify operational problems.

Today we operate in an environment where cybercrime and fraudulent behaviour is on the rise. In addition, we also regularly experience the operational incompetence caused by flawed business thinking and processes. In such a world, the lack of protection of a business's cash is rather disturbing. To paraphrase Alan Shepard's quote: "It's a sobering feeling to realize that your business's cash is at risk by management's use of the cheapest means to protect it."