Credit Matters Newsletters

My apologies for the newsletter not having a full quota of articles and features this month. It has been a hectic time for our family.

Word of The Month and Inconvenient Business Truth segments continue to offer valuable business insights.

Advertising via Credit Matters

If you are interested in reaching a wider group of business prospects, contact Kim to see what we can do for you. There are many different opportunities to advertise your business. The benefit of advertising with Credit Matters is we offer one of the few opportunities to reach a broad marketplace of customers with financial risk management issues.

This month you will find three new business listings from Hummingbiz, Skinner Business Solutions and Enable Workplace.

In a similar theme to this month's quote, the Business Observation this month focuses on an unfortunate fact; "You cannot protect incompetent and naive business people from the effects of uncollectable invoices." You only have to ask any professional credit or accounts receivable staff or debt collector about uncollectable invoices to find out they will agree.

So, why are the basics of selling on credit so often overlooked in business today? It is not as though there isn't enough current and historical evidence showing one of the main ways of going broke is to raise invoices which are never paid. A quick review of many Debtors Ledger and Bad Debt registers will provide plenty of evidence of how and why invoices are uncollectable.

When invoices became uncollectable, the evidence usually shows the main problem originates from poor management decision making. Typically, you will find such decision making was because of:

(i) the 'business model" by which the organisation operates and seems welded to;

(ii) a lack of respect towards risk and a belief your business is different;

(iii) a lack of business discipline and organisational procedures;

(iv) a failure to understand the value of professional employees at all levels of the business process;

(v) failing to understand and recognise the "art of doing business";

(vi) a culture of living in the past;

(vii) failing to understand new business paradigms.

In an ever changing world selling on credit in the B2B environment has changed dramatically in the last two-three years. Whether you like it or not, when extending B2B credit today you are doing so in to a completely different world to that of two-three years ago. I was going to say a different environment at first, however that understates the environment in which business operates today. The reality is; we are now operating in a completely different business world.

We can see evidence of this new business world from four simple observations.

1  If you are a B2B credit provider today, fundamentally, all the cards are stacked against your business.

2  With every legislative change, fraudsters, slow payers and incompetently managed businesses, provides yet another option to slow pay or to avoid paying your invoice.

3  Integrity and honesty are no longer valued as it once was. Increasingly therefore, we note more customers are less concerned about the integrity of their business and its operating processes.

4 In a world of entitlement, your customers increasingly feel they are entitled to change payment terms after being supplied your goods and services.

In light of these observations, it would seem that if you are a B2B credit provider, you should no longer be selling under yesterday's business paradigms. Unfortunately, you cannot always get this point across to incompetent and naive business people.