Tag Archive: credit control

  1. The ‘B’ Word…..Brexit! Can I plan in the Uncertainty?

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    Politics!! – It affects business whether we like it or not.

     

    Many have tried to turn a blind eye (and ear) away from the ‘B word’ or Brexit!

    However, there are some key considerations to remember when it comes to supply and the subsequent credit management.

     

    In various industries there is talk of contingency measures being taken, to mitigate potential supply problems from March. One of the measures being banded about is ‘stockpiling’.

     

    Typically, this will have a greater impact on the supply of goods but service industries may experience issues too. For example if paper prices increase, this would have a bearing on printers, training companies e.t.c. having a domino effect.

     

    Now there may be some whom will live with the mantra… ‘make hay whilst the suns shines’ but we must all be aware of the risks that increased stockholding could bring and have contingency plans:

     

    Consider:

    • You’ve carefully vetted and checked your customers and have determined a credit limit that both you, ‘the Supplier’ and the client, ‘the Buyer’ are comfortable with. Should the Buyer suddenly exceed this limit, without the guarantee of a pending order to fund the increased spend, are they going to be able to clear the larger supply invoice ?

     

    • So the Buyer has a warehouse full of stock ‘just in case’ but a larger stockholding is not a pre-cursor of larger revenue. In fact, it could lead to quite the opposite. Should there not be an increased demand for items, the Buyer may be forced to sell at a lesser price, which leads to lesser revenues, a squeeze on their cash-flow and decisions as to which Suppliers to pay.

     

    • Finally let’s not forget the possible issues the Supplier may face with stockholding. The costs to any Supplier in fulfilling a larger Buyer’s order obviously increase. The question any supplier should ask is… can I afford to invest in fulfilling this new order and if so, how can I mitigate the exposure and risk of the costs for same ?

     

    There are a few key principals as to how to mitigate invoice exposure and risk, we’ve covered them previously in both our past articles and on our various website blogs such as ‘The Ten Commandments’

     

    If you want to know more, then contact our team today.

  2. New Year’s Business Resolution…. Always Keep an Eye on my Exposure and Risk !

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    The New Year is always full of promise. The challenge is whether we can continue to stick to our well intentioned promises.

     

    We often make promises to alter ourselves, our lifestyles, our environment but how often do we promise to alter the way we look at our business

    Sadly running a successful business can be a drain on your time. Often the clamour to service clients and fulfil orders takes over the opportunity to really look at your business. Including analysing your exposure and your risk.

     

    We all know that there is ‘no better time to start something new than the present’ but the New Year also brings us a ready-made opportunity for change.

     

     

    Take a little time during the holiday period to study or analyse your customers payment habits. Is there a particular customer who has taken longer and longer to pay ?

     

    If so, make a note on your accounts system to flag them up as a concern. Then make them your priority when you’re conducting your credit control, contact them first. The quicker you action a concern, the speedier you are to get paid.

     

    Is there a particular customer who has consistently ordered more goods than your suggested credit limit ? Now is the time to conduct some credit and diligence checks on that customer. Make sure that they are worthy of the extended credit limit that you are giving them ?

     

    If they are, then write to them to extend their credit limit. Your customer will appreciate the vote of confidence and may even provide further orders. If they are not worthy of additional credit, flag them up on your system and every time they go past their limit, contact them immediately and ask them for payment to bring them back in line.

     

    New year is the time for new starts and new beginnings, so let’s all start putting best practice into our businesses.

     

    If we can be of help with recovering outstanding debts or remove the time you spend chasing payment by taking on your credit control please get in touch>>>

     

    Happy New Year !

  3. 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.

    Register to attend the Seminar