Credit Matters Newsletter
In This Issue
- What's New At Credit Matters?
- Quote Of The Month
- Monthly Business Observation
- Monthly Business Conundrum
- This Month's Business Inconvenient Truth
- Tradies Hint and Notes
- Latest Blogs & Readings
What's New At Credit Matters?
Welcome to our June newsletter. This month will be briefer than normal as I know many of you are busy with organising the financial year-end figures. As a result, I will not include a special topic subject this month.
This month’s quote and blog focuses on creating factual financial end-of-year reports to make management comfortable this year, which however, may create discomfort in the next financial year.
The conundrum this month is how to sell to get paid in the future.
Our inconvenient truth is, change happens whether you are ready for it, or want to admit it.
This month’s Tradies Hints and Notes is about reviewing your business operations to identify any problems and improve your business for success.
Kim is available to help with your questions and concerns if you need any assistance, and as always, the first chat is always free of charge or obligation.
Quote Of The Month
“… if you look for truth, “you may find comfort in the end”, but if you look for comfort, “you will not get either comfort or truth” by CS Lewis
Monthly Business Observation
In today’s fragile and debt laden business world, now is not the time for business owners and their management teams to seek a “comfortable feeling” by adjusting financial figures for their year-end financial reports. The truth is that when this situation occurs, management is potentially placing their personal and professional reputations at risk, plus of course their respective personal financial assets. After all, rarely do such adjustments provide additional cash or further saleable assets which can be sold if required.
In addition to the amount of debt outstanding, means that in Australia, the state of the business environment is also about to be further negatively compromised by:
- the ATO’s aggressive program to collect unpaid taxes,
- the proposed changes to superannuation funds by the Labor Government,
- the recent court decision by the Victorian Supreme Court decision ruling that employers must pay portable long service leave entitlements,
- the new Payday Super requirements coming into force,
- the constant increasing taxes by governments at all levels, plus costs to operate a business due to additional red and green tape requirements, plus
- the recent pay rise granted to many workers.
In light of these above-mentioned issues, now is not the time to hide the true state of your business’s financial position, just to seek a few moments of comfort. The reality about to befall the Australian business community, with so many small and medium sized businesses already struggling with debt, is not looking positive.
In light of the above information, it is essential that all end-of-year financial reports be prepared conservatively and realistically to reflect the true financial position of your business. This strategy may be uncomfortable to in the short term however, it could also be the wake-up call required to change the way your business conducts its operations in order to survive. If your business can complete this objective, your level of comfort may return. If your business should fail however, it is more than likely your level of discomfort will only increase exponentially.
Monthly Business Conundrum
Irrespective of the economic and business environment, there is no difference when it comes to selling your goods and services. Due diligence, common sense, the right sales strategy and understanding what might impact on your ability to get paid, are essential components in making profitable sales.
In tough times as they are now, you need to be able to customise your sales strategy to suit each and every customer. The ability to start this process comes from management as the first and most critical factor in creating an innovative sales, credit and risk management process throughout the whole organisation. Without their endorsement and active involvement in this process, the rest of the business will continue to miss out on maximising its profitable sales.
In the above environment, there may be a place for individual “champions” to be recognised for outstanding achievements. There should be no champion departments or operational silos however, as it is these factors which tend to cause conflict within the business itself.
The operational focus must be on the cooperation between all the employees to create the right sales and support strategy for every customer in order to achieve prompt payment, prompt resolution of problems and create profitable sales outcomes. For example, there may be customers which deserve credit facilities, or special discounts, or discounts for upfront/cash payments, and others which do not.
In such situations, all employees must work as salespeople, credit/accounts employees, marketing, customer service, administration or fraud and risk oriented in a team-like format. The old-fashioned approaches such “… it is not my job”, or operating in silos, or not being eligible for “champion” awards or bonuses, is already outdated and will result in the loss of profitable sales.
Today’s business realities means that the team focused business, has the best chance of picking up every possible profitable sale, to survive and grow. Meanwhile, those businesses which fail to adapt to the new environment risk falling by the wayside and/or becoming another insolvency statistic.
This Month's Business Inconvenient Truth
Change is a constant in business life, and these days, it seems to be on us all the time at an increasing pace. There are two ways of dealing with change. Wait for it to hit and then be reactive, or look ahead and see what may happen and make strategic decisions on how to greet it.
In the first instance, taking and reacting to any change after it has hit, means you are at the mercy of others who have already adjusted to the change, or have already been negatively affected and will hurt your business. For instance, those business which are so heavily in debt and know they cannot pay you, but will continue to buy from you in the hope of fixing or minimising their own situation.
If you note that change is coming you can take preventative actions to either benefit from it or minimise any potential negativity. In other words, you are taking actions to try and achieve a positive outcome and that is always a more proactive way to achieve a better outcome. A perfect example is to find a way to reduce the potential debts owed to your business by reducing credit terms or only selling on cash or with part payments.
The changes which are coming to the Australian business environment suggest that NOW is the time to search the business horizon and to identify the potential outcomes of any anticipated changes. If you do that, and take action to counter the projected outcomes of these changes, you stand a much better chance of surviving and then growing your business.
This section is devoted to Tradies contemplating going out on their own, or currently working in their own business. It is a basic introduction on the key factors in running and successfully operating a business.
Each month there will be a helpful hint on important issues which they are likely to face in operating a business.
If the tradie needs further information, they can also purchase a PDF booklet for AUD$5.50 including GST via Credit Matters website. This booklet offers basic insights on various business matters written in easily understood English. It can be downloaded to their phone or tablet and carried on the job for immediate assistance in case they need help for an unusual situation.
When a tradie transfers from being an employee to starting their own business, they are often unprepared to deal with all the issues of being in business. It is essential then that they learn what works and did not work for their business in the past financial year, and make adjustments for the success in the new financial year.
Latest Blogs & Readings
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.
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.