Credit Matters

Credit Matters Newsletters

Credit Matters
What's New At Credit Matters?

What's New At Credit Matters?

The next three-month observational report on what is happening in Australia due to the pandemic and recession is now available on our website.

If you or someone you know need help with outstanding and past due invoices, to protect or increase their cashflow, help is available. Just refer to the attached brochures of the two qualified and experienced credit and accounts professionals or contact Kim.

There are two brochures from The Australian Small Business and Family Enterprise Ombudsman regarding the new rule which paves way for collective bargaining by small businesses and Ombudsman launches Review of Discretionary Mutual Fund proposal to help businesses obtain affordable insurance.

As always, if you wish to promote your business services at an affordable rate, contact Kim at kim@creditmatters.com.au. You will be surprised at the value we have to offer.

Quote Of The Month

Quote Of The Month

‘Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover the senses slowly, and one by one.’
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
Monthly Business Observation

Monthly Business Observation

This month’s quote is timely when you consider where we are at in the world today. Turmoil is all around us, those people which we expect to give us unbiased support are often found wanting and the rules of life and business which we grew up with, are being constantly challenged.

One of the key examples which explains the turmoil and issues we all face, are the developing asset bubbles of property, the sharemarkets and cryptocurrencies. These days, there are three main groups of people which are outlining their thoughts on these asset classes.

In the first group, you have the cool heads, with the experience and an understanding of history. These people advise that these asset bubbles are a danger and do not make sense. As such, these assets are a threat to our wellbeing.

The second group are those with vested interests who want other people’s money, or believe their insights into economics, allows them to put into place, all sorts of untested theories and strategies.

Of those that want other people’s money, it would be wise to remember Danny DeVito’s character Larry the Liquidator from the film “Other People’s Money”. Larry liked nothing better than “… other people’s money”.

In regards to those which put forward their untested theories, they still persist with the same message. This is despite the evidence that their strategies don’t and are not work working, and the continued expression of concern by many critics.

Then there are the third group, the FOMO’s who are those that live in the fear of missing out, on the latest money-making venture, or missing out on their opportunity to buy a home. In either case, irrespective of whether they are buying the “product” with their own money or via borrowings, problems will occur if there is any downturn in asset prices or the economy.

When all said and down, yes, there will be people who will make a lot of money out of these assets. However, those that suffer a loss, will be caught in a downward spiral of financial damage and reputation. In time, these factors will affect all businesses in the wider community through lost sales and customers who no longer have the means to buy, or have access to cheap credit.

Monthly Business Conundrum

The truth is that every invoice is important and it is essential that they are all raised in a timely manner. Having said that, there are two types of invoices which are more important than your standard invoice which is being raised for goods or services about to be issued.

The first invoice is the one that must be raised to meet a customer’s special deadline for delivery of product or service, or must be raised by a specific time of the month to be paid as a current invoice.

The second type of invoice which is equally important, is the unpaid invoice with an outstanding enquiry. The type of enquiry is irrelevant.

Why is this invoice so important? Simple, because until the enquiry is dealt with satisfactorily, the invoice will never be paid. Too often there is no emphasis on dealing with these invoices urgently. The delay usually occurs because of excuses such as short of staff, need to complete current invoicing, too busy doing other tasks, need to get invoicing completed to meet budgets etc.

Here are a few examples of why the lack of emphasis is so important with these invoices.

  1. If the invoice is of a large dollar value, any delay in payment can mean a 30-60 day delay in payment receipt.
  2. Any delay in receipt of payments may affect collection and cashflow budgets.
  3. Any delay may result in lost purchasing opportunities at a discount, or being able to claim a discount for early payment of an invoice.
  4. Any delay may show the customer that their enquiries are not important, which may lead to a loss of further sales.
  5. If the customer has cashflow problems, they can simply make an enquiry relating to any outstanding invoices to delay payment without any risk to their payment reputation.
  6. Any delay may result in the customer not paying because by the time the reissued or confirmed invoice is received by the customer they’ve closed down, or are under an insolvency administration.

It goes without saying, all invoices must be raised in a timely manner. The delay in answering invoice enquiries for any reason should not be acceptable. There are always other negative ramifications. In a period of recession and uncertainty such as now, any delay in receiving payments is a huge negative and could lead to a serious loss for your business.

Monthly Business Conundrum
This Month's Business Inconvenient Truth

This Month's Business Inconvenient Truth

One of the great inconvenient truths of business and life is that sometimes, we make mistakes. The reason why our efforts and decisions did not work, could be a result of many different factors.

The very worst thing we can do however, is to start the blame game if the fault lies within ourselves. For instance, many people cannot accept criticism in any form and seek to blame others after suffering a loss. These people often play the victim card, and do not reflect critically on their own failings. As such they rarely learn from their mistakes, even if they can financially afford to, and therefore fail to develop as human beings and better businesspeople.

The many people who lost their money to fraudsters and scammers are such people. A small number of people will be honest enough to say they are embarrassed by being conned. Some of these same people, despite this embarrassment, do learn from the experience and even are willing to publicise this in an effort to help other people.

The majority of losers however, seek to blame others for their naivety and greed, or in the case of the regulators, their lack of attention and actions. That is one of the reasons why many people hated Bernie Madoff so much. The truth is, Bernie in a number of instances did try to warn some people they weren’t suited by the investment, yet they still wanted to invest with him. They also did not stop with a minor investment as cautioned by Bernie; they usually invested all their savings anyway.

Did Bernie Madoff deserve to be hated by all those that lost their money. In some cases, definitely yes. In other cases, a definite no. Those that hated Bernie the most, were victims of their own greed, or lack of attention to their responsibilities, and were embarrassed to have been exposed as either stupid, negligent AND/OR greedy.

Will most of us learn from losing our money to fraudsters, probably not. We continue to see reports of people being scammed regularly in the media. It appears when money is involved, greed gets in the way of common sense, even when the reported losses of other people from similar situations are exposed.

Did your end of financial year campaign to improve your business's cashflow provide the cashflow you were seeking?

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 info@creditmatters.com.au.

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 info@creditmatters.com.au for options.