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What's New At Credit Matters?

What's New At Credit Matters?

We are looking forward to our new Competition - Challenge commencing on the first of July. Be sure to visit our website to obtain full details and have a go. We welcome the participation of our overseas acquaintances and those wishing to become a Credit Matters Member.

The Australian Small Business and Family Enterpris­­e Ombudsman has focused on the protection of tradies and subcontractors with their flyer which we have attached to this newsletter. Accordingly, we thought it timely to add details of our own free feature Helping Tradies To Get Paid.

I have added a second attachment from the Australian Small Business and Family Enterpris­­e Ombudsman on Small businesses hurt by financial misconduct encouraged to file legacy complaints. If you know a small business owner who has been disadvantage by another business, this information may of value to them in making a claim.

Other attachments with this newsletter include my own article which appeared in the AICM magazine pointing out the value of employing a professional credit manager or a person well versed in accounts receivable. Finally, there is an introductory brochure from Global Data offering a range of products suitable for small and medium sized businesses.

Don't forget, if you wish to promote your business services at an affordable rate, contact Kim at You will be surprised at the value we have to offer.

Quote Of The Month

Quote Of The Month

A written agreement is better than 10 verbal ones.

CMI Credit Mediators Inc.

Monthly Business Observation

Monthly Business Observation


One of the essential factors in business is an effective trade/credit trading agreement. Of course, just because you have a properly prepared agreement and the customer signs that agreement, there is still no certainty it can protect you from bad debts or slow payers.

A properly prepared agreement signed by the customer however is still one of the most useful tools for any business. Conversely, having an out-of-date trading/credit agreement, or one that has been cobbled together from other agreements, is a financial disaster just waiting to be put in to action.

One of the main benefits of having a signed and properly prepared agreement is that it sets the boundaries of the trading relationship between the supplier and the customer. A good agreement is one that is suitable for your business and customer type(s), is up to date and prepared by a lawyer which is active in debt collection who is prepared to defend their work in court, and helps protect the interests of the business.

Depending on the type of business and range of customers, it may be prudent to have different types of trading/credit agreements. This will help protect your business from the different customer types and marketplaces which may be targeted. There are times when a simple agreement with few terms on it is all that is required. Other situations may call for a more complex agreement.

Trading/credit agreements are also great selling documents when used properly because they also show up the integrity of the customer before any goods and services are supplied.

Some customers refuse point blank to sign agreements and these customers should only be supplied for cash up front with cleared funds. Other customers will sign the document and strike out certain clauses without warning you. Again, these customers should perhaps only be sold on an upfront basis, or at best on restricted terms. They have after all warned you that they are testing the strength of your business practices and are not prepared to be open about their way of doing business.

Other customers will want to negotiate in good faith and there is nothing wrong with that approach because they are upfront about how they like to do business. Perhaps these customers are the best type because you have the best chance of structuring a profitable relationship.

Finally, there are those customers which will sign your agreement with no intention of honouring it. You only damage your business needlessly if you continue to do business with them after finding out about their deception.

Once you have a properly prepared and signed agreement, there are so many potential opportunities to collect the debt if your debt collector or lawyer understands the laws of debt collection. Going through the courts with an aim of just getting a judgement is only one aspect of debt collection. There are many more cost-effective options if you have an open mind and a good debt collector or lawyer. It all begins however with a properly prepared trading/credit agreement suited to your business, customer and marketplace.

Monthly Business Conundrum

When creditors seek payment from their debtors for unpaid invoices, they are finding their ability to be paid within terms is being effectively reduced. The reasons for this change are costs, court processes, legislative escape clauses for debtors and a changing attitude by debtors to paying their debts.

In addition, should the credit provider be paid, an insolvency administrator can still come along six months after the debt has been paid and claim the funds as a preferential payment.

In such an environment, many creditors must wonder if granting B2B credit is still a profitable exercise? That is a fair call because the point of business is to make profit. If your sales process does not allow a profit to be made because the debtor has too many options available to avoid payment, then why offer credit at all?

Business people also forget the principle reason why there is little B2C (business to consumer credit) today. Basically, too many consumer debtors just did not pay their debts and creditors were virtually powerless to effectively collect the debts.

Can this situation be repeated in B2B credit? Well of course it can and we are already seeing this happening because in some industries B2B credit is no longer offered. In these industries there is no hesitation in demanding cash upfront or part payments.

Therefore, is it still practical for your business to extend B2B credit these days? Amongst the benefits of not offering credit is the removal of all the associated costs involved in selling on credit. Remove these costs and you can offer a cheaper price and it becomes a compelling sales tactic if sold properly.

Monthly Business Conundrum
This Month's Business Inconvenient Truth

This Month's Business Inconvenient Truth

Risk is a normal part of business and you ignore the possibility of risk to the detriment of your emotional wellbeing and bank balance. It is a wise businessperson who understands the risks associated with business in general and within their specific industry.

There are many businesspeople today who operate on the principle that risk will not affect them, the cost to manage the problem if it occurs can be managed, or they can avoid it all together by just closing down their business.

Businesspeople may avoid some of the costs by walking away or ignoring the problems caused by risk to some degree. In the long term however, most will not as they find the costs of risk avoidance continue to haunt them for many years in to the future.

Today there are no secrets; directors and officers of a business are finding they can still be held accountable for avoiding risks, insurance policies no longer protect the guilty as once they might have, and insolvency and bankruptcy laws have changed.

In recent years there has been the involvement of litigation funders which have also changed the landscape when it comes pursuing perceived and actual failings of businesspeople.

There are many different types of risk in the modern business environment as business practices and responsibilities have changed. Therefore, all businesspeople should accept that managing risk is usually a better proposition then trying to avoid risk.

Word Of The Month

Is the spelling breakeven, break even, or break-even?

It’s very common where a word can be used as a compound word, two separate words, or with the two words hyphenated. Sometimes all three can be correct based on your usage, but at other times one or more may be a secondary spelling, or may be incorrect usage.

If we check breakeven, break even and break-even using Google, and limiting sites to sites ending in .au, the number of results returned are: 67,400, 156,000 and 161,000 respectively. The Australian Oxford Dictionary only lists break even. The Macquarie Dictionary lists both break even and break-even. Neither dictionary lists breakeven which indicates breakeven as a compound word may not be correct. Those using Microsoft Word should take care as Word accepts breakeven as a valid spelling.

The Macquarie Dictionary describes break-even as a noun derived from the phrasal verb break even, thus break even is a phrasal verb.  E.g. Usage as a phrasal verb. The company aims to break even by year end. Usage as a noun. The company may never reach break-even. In addition break-even can be used as an adjective. The company needs to know their break-even point.

Whether break-even or break even is used depends on your usage. At least in Australia, breakeven as a compound word, should most likely be considered to be an error.

Word Of The Month

theBankDoctor offers free banking and finance advice to help small business owners get the best business banking set-up.

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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.