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Credit Matters
What's New At Credit Matters?

What's New At Credit Matters?

In November we continued to develop our range of features and includes a special feature which will appear occasionally as items of interest attract our attention and we believe may be of value to our readers. Our first feature is Robert Heller's Catch 22, a truly interesting and enjoyable read at several levels.

You will also find on our Home Page a video by a respected debt collector from the US, Dean Kaplan, "The Confessions of a Debt Collector".

This month we are pleased to introduce a new member to our Better Business Club, Collect AU. CollectAU is a new start up debt collection business established by respected industry professionals. You will find their introductory flyer is attached.

Also attached are announcements from ASBFECO regarding Payment time review will identify Australia’s worst payers, RSM - AFC Exam Reviews for 2019 and an introduction to a new CreditorWatch product.

If you would like to advertise your business, contact Kim at and see what we can do for you and your business.





Quote Of The Month

Quote Of The Month

The absence of evidence is not evidence of absence.

Nick Hubble

Monthly Business Observation

Monthly Business Observation

One of the more interesting aspects of business is the failure by many businesses to measure the cost of loss caused by operational and organisational inefficiency. When challenged by management on why you should measure this loss, they might say, there is no evidence of any loss.

Alternatively, management will advise they believe any loss is not large enough to warrant the work to find out the size of loss, or they don’t have the time or money, or they don’t want to be distracted from selling.

The fact is, if you don’t measure the losses caused by inefficiency, then of course there will be no evidence within the business. That does not mean there are no losses from operating inefficiently.

There are always losses when operating inefficiently and no business is immune to these losses. The size of loss will vary between different businesses of course. Whether the losses are material or not for your business, will never be known if your do not seek to measure them.

The cost of Inefficiency includes lost sales through invoices being cancelled because they were received outside the customer’s guidelines, a lack of product or delivery of services, customer alienation, bad or incorrect stock supplied etc.

There are also losses from the costs of sales to bad payers and fraudsters due to a lack of proper due diligence, failure to follow up the unpaid invoices in a timely manner, lack of response to customer enquiries for invoice or statement copies etc.

In addition, and not least, there seems to be some belief that writing off bad debts is not an expensive exercise. The thinking behind these thoughts is that the majority of the money has already been lost and any further action is a further waste of time and money.

Unfortunately, when you write off a debt, not only do you lose the dollar amount of the invoice, you also bear the added costs of contacting the debtor for payment and the costs of actually approving and writing off the debt. These costs can be greater than the original debt.

So many costs, so often not measured. As Peter Drucker said, "you can't manage what you can't measure."

By not measuring the costs of inefficiency, there is little embarrassment for management because there is no exposure of these losses. The financial records will still show whether a net profit or loss occurred. However, there will be no visible evidence of the impact of specific inefficiency losses to the net figure.

There is also little thought on improving the efficiency of the business to reduce any exposed costs caused by inefficiencies. Yet losses are being incurred and there is no way to tell if by spending money to save the money lost and to increase profits, would be effective.

As this month’s quote shows us, just because there is no evidence of loss, does not mean there is no loss. We just have to be brave enough to identify the loss so we can take proactive action to save on costs. Effectively of course, the saving of costs pays for the actions required to reduce it, and to see profits increase accordingly.

Monthly Business Conundrum

The greatest costs and energy sapping problems in business today are government red tape and legislation.

It is almost getting to the stage where most of a business person’s life seems to be fulfilling legal obligations rather than actually doing any business.

The problem is if you don’t play the bureaucratic game, you can be heavily penalised and perhaps lose your business. In the old days, some business people played the game of avoidance and just walked away from their business if caught out. This is no longer possible with new regulations and penalties for not meeting your commitments.

Unfortunately, there will always be those business people which ignore red tape and legislative requirements. By ignoring these imposts and costs, they are operating on a cheaper basis than responsible business owners. The honest and ethical business owner is meanwhile penalised for doing the right thing.

The conundrum all business owners face is whether to honour regulations and legislation, or ignore them. Those business owners which do the right thing, hope that their customers appreciate paying a fair price for quality. The alternative is for those customers which go for the cheaper price is, they will suffer the negative consequences which come from dealing with the less responsible business person.

Monthly Business Conundrum
This Month's Business Inconvenient Truth

This Month's Business Inconvenient Truth

Dealing with difficult or slow-paying customers is not smart business, unless you can prove you are earning a good NET profit.

So desperate are some business people for sales, they persist in dealing with difficult and slow-paying customers without proving whether their business is actually making any profit from the trading relationship. Long term, this business practice will break the bank and put your business, out of business.

I accept there are many ways to make profit by selling to difficult and slow-paying customers. The problem I have, is that I have never seen a NET PROFIT REPORT relating to these customers which proves a profit was made and from what sources within the supplier’s business.

At the end of the day, again, apologies to cat lovers, there is more than one way to skin a cat. There are likewise many strategies that are available to help create a profitable business. One of which is; if your business can prove that it actually makes a profit from dealing with difficult and slow-paying customers, well done.

On the other hand, if a net profit cannot be generated by any of your strategies, another strategy is, to “encourage your customer to buy from your best competitor.” After all, if your business cannot generate a net profit from these customers, it is likely neither will your competitor.

Word Of The Month

Is the spelling “awhile” or "a while"?

Both the spelling ‘awhile” and “a while” are correct. Both mean a period of time. The spelling to use depends on usage. The spelling “awhile” is for an adverb and “a while” for a noun.

An adverb needs a verb, that is a doing word.

Can we stay awhile?

Stay is the verb and awhile is the adverb.

Can we stay for a while?

While is a noun as a period of time, such as an hour or a day.

If you’re struggling with which one to use, a technique that can be useful is substitute a noun such as “day”. The noun “hour” isn’t good as then you’d need to use the word “an”.

Can we stay day. This makes no sense, so “awhile” is correct.

Can we stay for a day. Makes sense, so “a while” is correct.

Often in situations like this where usage can be confusing, it may be useful to consider rewriting the sentence, if that makes your life easier and helps your reader.

Word Of The Month

Catch 22 is a great read even though it was written 50 years old. The book also carries an equally valid messages about organisational behaviour. On that basis, it is another reason to read it, or read it again if you missed the messages on organisational behaviour the first time around.

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

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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.