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What's New At Credit Matters?

What's New At Credit Matters?

Our new red flag competition is now underway and I look forward to receiving some interesting examples of business red flags. So far nobody has provided anything uniquely different which I can share.

Attached is a copy of Barry Urquart's newsletter about the NOW customer. There is also a brief complimentary article by Barry on the impact of the NOW customer in regards to managing business risks in our Special Topics feature of this newsletter.

Attached are brochures from Credit Matters regarding our free feature for Tradies in business and the Red Flag Competition - Challenge. Finally, but not least is Jeff Hurst's brochure about Trade Bureau Australia. If you are not sure how effective a trade bureau can be in helping you manage risk when offering B2B credit, have a read of Jeff's brochure.

Quote Of The Month

Quote Of The Month

“A penny saved is a penny earned” – Benjamin Franklin

Monthly Business Observation

Monthly Business Observation

Finding the right cost savings creates profits and does not have to negatively affect efficiency or destroy value. Too often however, we see how value is destroyed and profits lost through using the wrong systems and strategies to save on costs.

This occurs because management and owners create and stick to business models which are no longer relevant, or fail to learn and measure the costs of mistakes. They have also not learned the lessons of time which prove that invoices raised incorrectly usually end up as liabilities instead of assets.

As the business environment constantly changes and evolves, we often find that yesterday’s business heroes become today’s failures. Alternatively, those businesses which were thought of being too big to fail, do in fact fail.

One of the many reasons these businesses and business heroes fail is because they forgot the old saying, “A penny saved is a penny earned”. If they do remember this saying and its meaning, they mismanage the process of saving money by cutting costs inappropriately.

The best way to save money is not to spend it in the first place on unnecessary costs. These costs include:

  • processing credit claims and rectifying mistakes;

  • measuring the costs of mistakes, inefficiencies and the real cost of bad debts;

  • not answering customer enquiries promptly;

  • raising properly processed invoices which do not give customers an excuse to slow pay or avoid paying the invoice altogether;

  • strictly managing, whilst  the business cashflow resources by reconciling accounts payable and receivables, etc.

Operating with a cheaper upfront cost mentality is not always the best solution to cutting costs to save money. Whilst cost minimisation is a worthy pursuit, there is more than one way to save costs rather than just using cheaper business inputs. Operating efficiently is the better policy because you are not wasting time and money fixing mistakes and spending money on unnecessary costs.

Monthly Business Conundrum

Today there is an increasing focus and belief that technology is the saviour of business because it helps saves costs by making your business more efficient. Many businesspeople believe they can also reduce employing expensive employees, and if they must employ somebody, they can get a “cheaper” employee.

We continue to find however, if the technology does not do what is expected, or cannot be customised to our needs at a reasonable cost, then it often causes more problems than it solves. In addition, as technology replaces employees, another set of problems is found.

Whilst employee numbers are reduced and possibly replaced by “cheaper” employees, existing employees become disenfranchised. The remaining employees may also no longer have the skills and knowledge to do the work required to keep the business operating efficiently.

The reason these situations occur, especially in troubled times, are because:

  • management has focused on operating cheaper rather than efficiently;

  • the employees which were committed have become disillusioned and stay because there may be few options for other employment;

  • the real “knowledge workers” of the business, which know how the business really needs to operate, are retrenched or leave for better opportunities, etc.

Technology that works properly combined with professional and committed employees often looks expensive upfront. Cheaper and out-of-date technology combined with “cheaper” employees MAY look inexpensive upfront in the short term. Inevitably however, survival of the best businesses over the long term usually shows that a cheap upfront policy leads to expensive repair costs and lost profits whilst a focus on working efficiently is the more effective way of saving costs.

Monthly Business Conundrum
Business Red Flags

Business Red Flags

Preparing a properly prepared credit application to try and ensure your business rights are protected is not cheap. If it is amended by your potential customer without notification and you do not pick up their changes, you may lose your rights.

The issue is not that the customer has amended your credit application; the real issue is that they have not explained what they did or why. By taking such action, your potential customer has indicated they will probably not trade with you in an open and respectful manner.

To some degree, we all depend on one another, whether it be a supplier or a customer, to have a degree of integrity. Without integrity, there can be no trust and without trust, we cannot possibly operate efficiently.

It is at this stage therefore it would be wise to consider whether you should offer this customer credit.

If you consider that you must extend credit, before doing so, you should conduct proper due diligence tests on the customer’s character, trading performance, plus the directors. You can also test their intentions by structuring a sales process with appropriate disciplines to try and minimise any possible loss.

Word Of The Month

Is the spelling free standing, free-standing, or freestanding?

Looking for kitchen appliances recently, the results returned In Google showed the use of free standing, freestanding, and free-standing, sometimes even in the one result. It is often said if there’s multiple ways to spell a word, you should be consistent with the spelling you choose.

The Australian spelling dictionary aims to provide the single spelling preferred in Australia, but sometimes, as in this case, it can be quite difficult to identify the single preferred spelling. A search of Google for sites from Australia (sites ending in .au) returns 5.41 million results for free standing and 6.37 million for freestanding. Because of the way search engines work, searching for free-standing with the hyphen, usually doesn’t return something we can have confidence in, as a hyphen is often treated as a word delimiter. Hyphens are also regularly used in the website URL  (address) and these results will be returned by Google as well.

The Macquarie dictionary has the entry freestanding, but not free-standing. The Oxford Australian dictionary has free-standing, but not freestanding. Microsoft Word is no help at all as it will suggest freestanding and free-standing with the same meaning, and both free and standing are legitimate words in their own right.

It appears this may be a situation where the spelling is evolving. Often when there’s two words used as an adjective, the words will be hyphenated. However, as time goes on the hyphenated words drop the hyphen and the result is a single word. With freestanding exceeding free standing (and free-standing), this would indicate the preferred Australian spelling may now be freestanding, with the hyphenated version free-standing a secondary variation. The use of free standing as a two word adjective - when used in the sense of self-supporting, unconnected, independent – which is very common, would also not be the preferred spelling.

Word Of The Month

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Publications & Resources

Media Releases

The NOW generation in business - a brief article by Barry Urquhart and the importance of understanding its significance throughout the business enterprise

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.