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What's New At Credit Matters?

What's New At Credit Matters?

This month's newsletter is earlier than usual due to a number of circumstances which will also impact on our ability to offer our newsletter in August. Therefore, our next newsletter will be in September.

This month we amended the title of a Doomsday Clock to the CM Business Clock. We believe the title more aptly describes our intent of acting positively rather than waiting passively for the next recession. Once the recession is with us, it is usually too late to protect your assets and business. In addition, as part of our strategy to keep business people informed, we have also introduced another new feature, the CM Land Cycle Clock.

This month you will find attached copies of the following brochures about the GCS Community 2018 Events Flyer, (creditor)watch on Dealing with Debtors, a brief cyber card brochure, and Peter Nash's "What is Bugging You" brochure to encourage you to become better acquainted with your business stakeholders.

Quote Of The Month

Quote Of The Month

”Remember the golden rule! Whoever has the gold makes the rules!

From The Wizard of Id – a classic daily newspaper comic strip created by Brant Parker and Johnny Hart in 1964

An earlier version

Jean-Jacques #Rousseau 1764: "The rich holds the law in his purse.." or "Le riche tient la loi dans sa bourse.."

Monthly Business Observation

Monthly Business Observation

The unfortunate truth is, big business often acts arrogantly when dealing with its smaller and medium sized suppliers. Just as this month’s quote articulates, they can get away with this arrogance because they have the “gold” to deny smaller businesses their rights.

For instance, trading contracts may not be fully understood due to the complex nature of the trading relationship contract. Furthermore, management teams in smaller businesses may not have the skill sets to negotiate a mutually agreeable trading relationship.

It is always wise therefore when considering going into business with a large corporate business, to understand the critical aspects of the relationship. These aspects are often not properly understood by the smaller business's management team. This situation is especially true when the smaller business is approached by a large corporate business. Too often the management teams of smaller businesses become blindsided by the thought of the many dollars they anticipate earning. They rarely see the real dollar-cost benefit of the relationship may be nothing like they anticipated.

The critical aspects of doing business with big business are based on two key considerations.

The first is, a large corporate business these days more closely resembles a government bureaucracy than a business.

Secondly, a proper due diligence exercise on the corporate enterprise should be completed to understand the implications relating to the proposed trading relationship.

Once you understand these considerations the list of factors you need to consider, include the following.

1          Can you identify the senior management team of the business in order to complete due diligence on their business and personal reputation?

2          What is the corporate business’s true payment and ethical reputation compared to their espoused version on their website?

Points one and two is all about knowing your customer. In other words, is what you perceive about the business backed up in reality.

Once you understand the nature and behaviour of the people running the corporate business, it is wise to seek answers to the following questions.

3          What does their true operating and trading terms mean for your business?

4          When do they pay and do they pay all invoices in a timely fashion, or pay larger dollar valued invoices slower?

5          What are their dispute resolution processes?

6          Are there telephone contacts (not just email contacts) and real people to talk to when required?

7          Are they supplier-friendly?

8          Will you need to employ a data entry specialist to input your sales and invoice data?

As a side note, you may need to train a specialist data entry employee for every large corporate customer depending on their billing systems.

9          If you send an email to their supplier support centre, do they reply with an answer “… we will get back to you in 24,48 or “x” number of days, or is there an immediate reply?

10        Is your account opened and ready to pay your authorised invoices before you supply any goods or services?

Failure to ensure your account is operational before you supply goods and services, may mean a protracted wait before receiving the first payment.

It always wise to understand the issues you will face if a corporate business comes calling seeking to do business. Understanding the real factors of the trading relationship can be the difference between making a profit or loss.

After all, once you have commenced supply, they have your gold, and a whole lot more of their own to fight any action you may initiate to protect your business’s rights.

Monthly Business Conundrum

Do you go broke quickly or slowly?

Your conundrum is as Kenny Rogers sang in the Gambler,

“If you’re gonna play the game, boy

You gotta learn to play it right

You’ve got to know when to hold ‘em

Know when to fold em”

Nobody wants you to go broke, but there are times if you run a business, that you have to be realistic about your business's prospects of survival.

When times are tough, it is tempting to accept every sales order. Unfortunately, if you drop your sales and credit disciplines and sell to the wrong customer, you may go broke very quickly.

When you become insolvent, you are likely to lose your financial assets, creditworthiness, business and personal confidence. Consequently, starting a new business or moving forward positively with your life becomes very difficult.

Going broke slowly by maintaining sales and credit disciplines may mean you can avoid the worst repercussions. For instance, there may be a time where you realise your business is not viable and decide close the business in an orderly manner. If your timing is right, you may even able to sell parts or the whole business.

If you sell, you may have little money left, and yes, your pride might be dented. On the other hand, you may be able to move forward more positively in your life than if you had become completely insolvent and lost everything.

Monthly Business Conundrum
This Month's Business Inconvenient Truth

This Month's Business Inconvenient Truth

It is not the dollars of your raised invoices which is Important, it is the dollar profit gained from the invoices raised which is important.

It seems all too often there is an emphasis on raising invoices as though the more invoices raised, the more money you will make. There is some truth behind this emphasis because if you don’t raise enough authorised invoices you will go out of business.

The problem is to raise authorised invoices which get paid in a timely manner and are profitable. If this does not occur, any profits can be easily lost in chasing up unpaid invoices, or in writing off those invoices which are uncollectable.

It is essential therefore to monitor the number of invoices raised which are not paid within terms, as these invoices cost money. Once these invoices are identified, you need to find the causes as to why, and eliminate them from the business. After all, there is no point raising invoices which do not lead to a profit.

At the end of the day it is not the number of invoices raised that is important, it is the number of invoices which provide a profit.

Word Of The Month

Is the spelling pre recession, prerecession or pre-recession?

If you check the Macquarie and Australian Oxford dictionaries you’ll not find an entry for the spelling pre recession, prerecession or pre-recession. What are you to do if the dictionaries don’t help you?

Often words evolve over time. To-morrow became tomorrow. First, in general, if the word is not in an Australian dictionary, that would indicate the usage has not evolved enough to become a single word. If the hyphenated version doesn’t appear in the dictionary that doesn’t rule it out, but you still don’t know. Don’t fall for the trap of using dictionaries for other countries online as versions of English for different countries may evolve differently over time.

Is the usage of the two words an adjective, or adverb and perhaps should be hyphenated?

Sometimes if in doubt, perhaps the best approach, may be to rewrite the sentence. 

Word Of The Month

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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.

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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.