Tag Archive: Cash

  1. Can a Leopard really Change it’s Spots?

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    Large company failures…. They make the news on an almost weekly basis.


    Big high street brands such as Toys R Us and House of Fraser have suffered high profile insolvencies this year and others like Debenhams and Marks & Spencer have been forced into an aggressive program of store closures.


    In fact The Centre for Retail Research confirms that 41 high street names have entered insolvency so far in 2018… and it won’t end there.


    Now we realise that not everybody deals directly with these big high street brands but the likelihood is the chain of supply will work it’s way to your clients and suppliers in some way and will they be forced to pass on their pain to some degree ?


    The question is, what can you do to avoid being a victim in these trying times.


    The answer is simple, keep doing your diligence.


    Regular readers will know that we often speak about employing good checking processes and systems into your credit control procedures. In these trying times, let’s quickly revisit them.


    1. Conduct REGULAR credit checks on your client and suppliers.

    • Check for any adverse profit warnings, reduced credit scores and credit limits. All of these are indicators that the reference agencies and regulators are concerned.


    2. Reference Companies House and other business databases.

    • Check your existing and new information with the databases. Have new businesses been set up by the same directors ? Does this point to an imminent change in the business ?


    3. Do your diligence on the internet.

    • The internet is a great source of news and notices. If there are rumblings of troubles and insolvencies on the horizon, it’s better to be forewarned so you can act first, not last.


    Now we’re not saying that by you conducting the correct diligence, the rate of company insolvencies will fall, far from it.


    What we are saying is that in these days of companies closing, entering insolvency and then ‘pheonix-ing’ from the flames overnight into another business, you are better forewarned.


    For 2018 has definitely shown us that your leopard can indeed change it’s spots.


    If you would like to learn more about the diligence, credit control processes and methods to improve overall cash flow in your business check out our other News Blogs or attend our Seminar, that is taking place as part of Leeds Biz Week.



  2. Cash or Card….What is your Payment Strategy?

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    What is your Payment Strategy?


    Recent studies and news reports have shown that debit card payments have overtaken cash transactions, for the first time in the UK.

    This is understandable from a technology and customer experience perspective. After-all as a small business owner in today’s fast- moving climate, you have to be flexible to accommodate the diverse demands of all your customers.


    Customers like options. The more options that you make available to them, whether its product/service type or payment method, the better chance you have of creating customer loyalty, driving repeat business and ultimately generating greater profits.


    Therefore one important decision you will have to make is whether or not your small business will accept debit/credit cards.


    What does the research say?

    A HMRC survey, undertaken at the end of last year found that 70% of small businesses said that they do not use an entirely cashless system, although 21% do choose to use chip and pin machines as part of their payment mechanisms.


    This reluctance from small business owners to switch to a cashless payment system isn’t just stubbornness. It is borne out of many factors but the main ones were processing and mis-use costs and security.


    To accept debit/credit cards. That is the question!

    So while accepting cards may appeal to your customers, there are some aspects of these kinds of transactions that make accepting this form of payment more of a risk. In addition to the cost of paying to access the services, arguably the most costly drawback of accepting cards at your small business are chargebacks.


    What are chargebacks?

    Customers of major card companies have the power to dispute transactions, to protect themselves against fraud or unauthorized purchases. A chargeback happens when an issuing bank returns money to a customer in a forcible manner in order to settle a disputed transaction.


    Banks have instituted chargebacks to protect customers from dishonest merchants, but they do not have a whole lot to offer when it comes to protecting honest merchants from dishonest customers.


    There are also dishonest consumers who make a habit of purchasing products and services then disputing the charges.

    Small business owners should be aware that buyer’s remorse can lead to their requesting a chargeback.


    So unsurprisingly chargebacks are a concern for small businesses as it can find itself faced with enormous financial loss, and the prospect of fighting what seems like an uphill battle to retrieve the revenue you’ve earned.


    3 Issues to consider when fighting a chargeback:

    1 It’s Incredibly Time-Consuming

    In order to retain the revenue business owners need to prove to a merchant that the services were provided in the first place. It can be hard to do, so you need to evaluate whether fighting the revenue will be worth as many as 10-12 hours of your time.


    2.It Could Be Your Fault

    Chargebacks aren’t always initiated by dishonest consumers. They can also be triggered when your customer doesn’t remember you when checking the credit card statement. So ensure:

    • Your business is easily identifiable on the statement
    • You are attentive to queries in case a customer doesn’t recognize the charge.
    • If there is a genuine problem deal with it professionally before fighting a chargeback.

    3.The Client’s Unlikely to Result in Recurring Revenue

    Even if you ultimately win the chargeback battle against a dishonest customer, the benefits to your business are likely to be limited to the total amount of their bill


    Considerations beyond Chargebacks

    • Compliance – In these days of GDPR, it is vitally important we all adhere to security rules and regulations. If you record your calls, you must stop recording at the time that you verbally take a person’s card information. If you note down the details, then you must ensure that these notes are destroyed.
    • Costs – The rules about passing on card charges within a transaction have recently changed. Should a person use a personal card to clear an account, irrespective as to whether it is clearing a business account, you cannot pass on card transaction charges. You can only pass card charges when using a business card.


    As with any financial transaction, common sense is the key. By being educated as to the do’s and don’ts we’re all better placed to make those informed decisions and to ultimately succeed in this ever changing world of payment methods.