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Effective Credit Management – 5 Keys to Help Companies Survive in the Current Economy

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Unless you’ve been sound asleep for the last several months, you know that the global economy is in a serious crisis. And it’s not just the brokerage houses and financial institutions that are in trouble. Businesses around the world are facing formidable challenges in a struggle to survive.

Most companies are not going to get multi-million dollar government bailouts. It’s up to each company to make the tough decisions, chart its own course, and take a hard look at what it needs to do to survive. Getting serious about efficiency and effectiveness in handling receivable management needs to be a focus.

According to the Association of Executives in Finance, Credit & International Business (FCIB): “As global markets tumble and bank lending freezes, the role of trade credit as the main source of cash has become even more prominent.”

The Credit Research Foundation, in a recent publication – Lessons for Business to Learn from Today’s Credit Crisis – makes corporate priorities clear: “Your organization’s mission at this point should be to abandon the thrust to increase revenues and garner market share in favor of increasing cash flows and profitability.”

Credit and receivables have stepped to center stage. And it’s time to get serious about improving management of this increasingly valuable asset.

Key #1 -Effective Credit and Collection Policy

Effective credit management is about developing consistency in your credit and collection processes. This, in turn, will ensure efficiency in your entire revenue cycle.

The secret to consistency is a thoughtfully designed and actively implemented credit and collection policy. Such a policy has power to breathe new life into your entire credit-to-cash process. Even if you already have a credit and collection policy, it’s important to review it on a regular basis to assess its effectiveness and to make sure you are following it.

The CRF (Credit Research Foundation) web site’s Credit Assistant is one of the best resources available on the particulars of credit management. Click on “Credit Assistant” on the CRF home page ( and you will find a wealth of information on just about every aspect of credit management.

For help in developing your credit policy, select “Organization and Administration” from the left-hand navigation on the Credit Assistant home page. Then click on Developing a Credit Policy. This article even includes a credit policy worksheet to help you develop your own policy.

Key #2 – Due Diligence

As lines of credit dry up, your customers are going to start looking to trade credit as a source of working capital. Current customers may ask you to extend your terms or stretch out their payments. New customers may request very liberal open account terms.

But beware – now is not the time for short-cuts in credit decision-making. Treat every credit sale as if it could become a potential collection issue.

With current customers, don’t assume they’re okay now because they were okay last year. Review the creditworthiness of all of your important customers. Today’s business climate is erratic, to say the least. Companies that appeared secure six months ago may now be on the verge of collapse. Set up regular reviews to monitor each customer’s creditworthiness to keep a step ahead of bad debt write-offs. In particular, credit applications, financials and participation in industry credit groups can help you develop the information necessary to making a reasonable decision about extending credit to both new and existing customers.

Credit Applications

If you don’t normally use credit applications, start using them now. If properly constructed and executed, the credit application serves as an information-gathering tool that can also function as an enforceable document if litigation becomes necessary.

Financial Information

Consider this. When you go to your banker for a loan, you expect him to require financial information. When a potential buyer asks you for credit terms, the extension of credit is no less a loan than that given by your bank. Yes, financials are often difficult to obtain. But an analysis of financials is critical to determining whether a customer is worth the risk of an unsecured credit facility.

Again, the “Credit Assistant” section of the Credit Research Foundation provides valuable information on Financial Statement Analysis. Click on the Customer Financial Assessment section (Task Index) to find a series of topics on Customer & Financial Statement Analysis.

Industry Credit Groups

Credit managers routinely use credit bureau reports as a source of data for determining the creditworthiness of a customer. These reports may include general and dated information on a company’s financial position and credit history from various unidentified sources. In recent years, commercial credit reporting agencies have enhanced their offerings with items such as credit scoring, on-line access, and links to websites containing public record information.

These one-size-fits-all credit information solutions fall short, however, when it comes to providing the industry-specific information credit managers need to round out a customer’s financial profile and payment history.

Recognizing the limitations of traditional generic trade reports, credit professionals are discovering that membership in industry credit groups fills the gaps, helping them develop more complete credit histories on both new and returning customers. The net result is a faster, more accurate, cost effective solution for managing the risks associated with extending credit.

Key #3 – Protect Your Sale Wherever and However Possible

There are a number of ways to protect your sale when selling domestically or internationally.

The place to start is at the beginning. By appropriately structuring your sales contract (and/or credit application), you can build future protection in case you need to litigate. A well-written contract can make the litigation process easier and faster, and the likelihood of success much higher.

The Bernstein Law Firm outlines three things you can do to Improve Your Chances of Collecting from a Risky [Any] Customer:

(1) get written personal guaranties of payment from your customer’s principals;

(2) retain a security interest in various assets; and

(3) include a confession of judgment clause as part of your sales agreement or credit application.

Certain sales instruments also offer extra security when selling on credit. Including:

  • Letters of Credit – see CRF Credit Assistant (Collateralization / Securitization)
  • Bills of exchange (D/P and D/A Transactions)

Also consider factoring (CRF Credit Assistant – Collateralization / Securitization) or trade credit insurance, and, of course, perfecting a security interest in your customer’s assets.

Key #4 – Focus on Cash Flow

Businesses today cannot afford excessive write-offs or large numbers of delinquent accounts. Few business owners will dispute the fact that cash is king. A lack of operating cash was the primary “cause of death” for many U.S. “dot-coms” in the early 2000s. Poor cash flow management continues to result in the collapse of business enterprises, large and small, worldwide.

One of the most common cash traps is uncollected sales, a.k.a. accounts receivable.

How can you improve your cash flow? By reducing your Days Sales Outstanding (DSO). And how can you reduce DSO? By training your customers to pay on time – and that requires constant attention and follow-up. With receivables, it’s really “the squeaky wheel that gets the grease”. You want to be at the top of your customers’ payment list. How do you get there? Either by providing the most essential product or service; the one your customer can’t stay in business without. Or, by regular follow-up that keeps you in front of your customer on a consistent basis.

In Methods for Improving Collections, another CRF Credit Assistant article, the CRF recommends “Systematic follow-up of [all] accounts”, which “reinforces the serious nature of the outstanding debt and emphasizes the importance attached to it by the creditor [you].” Also, “it is important [essential] to keep contacts on a strict schedule.” The CRF encourages every credit department to set up a matrix of delinquent customer contacts, which might start shortly after the invoice becomes delinquent.

We recommend you consider following up even before the invoice becomes due. A letter or call letting the customer know the product has been shipped, when it should be received, whom to contact if there are any questions or issues, and when payment will be expected goes a long way toward a happy client and on-time payments.

Key #5 – Know When to Call in Outside Assistance

No one can do it alone. Many credit professionals struggle under the weight of increased scrutiny, expanded responsibilities, and static resources. Bogged down with daily operations and growing responsibilities, how can you make the changes necessary to improve overall business performance?

One way is to outsource 1st or 3rd party collections.

First-party Collection Outsourcing

First-party collection outsourcing is nothing to be afraid of. Most credit departments today cannot afford to hire all the staff they require to touch all of their credit or delinquent accounts.

The organizational benefits of outsourcing are well documented. A recent survey by The Hackett Group noted that “World-class companies spend a higher percentage of time on strategic vs. transactional activities. World-class companies outsource 66.6% more than non-world class firms.”

By providing a consistent, efficient, technologically current process, outsourcing A/R collections offers opportunities to address the immediate challenges facing credit managers. At the same time, the systemic improvements that come with outsourcing create benefits that will help the credit department achieve its broader goals.

For those not yet ready for a total outsourcing commitment, a partial outsourcing solution offers a low-risk entry into outsourcing’s benefits. By outsourcing only a selected portion of its A/R function, the organization can determine if it: (1) is comfortable with outsourcing in general; (2) has selected a provider with the right capabilities; and, (3) has the internal capabilities to successfully manage an outsourcing project.

Among companies that should definitely consider partial outsourcing are those that: require a few more receivable collection FTEs (full-time equivalents); have occasional need for increased staffing; or, feel their internal processes are ineffective and would like to benchmark them against a professional receivable management firm.

Third-party Collections

Even with the best credit management procedures and great care in approving credit customers, some accounts are going to go past due. And most companies, at some point, need the services of a professional collection agency.

If your buyer hasn’t paid in 90 or more days, you shouldn’t hang onto the account any longer.

Professional commercial collection agencies have the clout and local contacts to convince your debtor you’re serious about collecting your money. They can also help with legal action and most have networks of attorneys that can sue in any jurisdiction.

Another advantage: most collection agencies work on a no pay/no fee (contingent) basis. So, in essence, you have nothing to lose by placing an account with them. If they can’t collect it, you don’t have to pay them.

Focus Your Efforts on Effective Credit Management

Your company didn’t cause the current credit crisis – but it’s going to be up you to ensure your business survives it.

  1. An effective credit and collection policy
  2. Due diligence
  3. Protecting your sales
  4. Focusing on cash flow
  5. Seeking outside assistance

These 5 Keys to Effective Credit Management provide a valuable check-list to help you focus your efforts.



Organic Swing Tags Offer Amazing Benefits for Your Business

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Organic swing tags can be used to promote and enhance your items at competitive rates. These tags come in various sizes, styles, designs, shapes, and colors. You can print one side of the tags or both according to your needs and budget. Make sure you are using quality machines for printing. Let’s know more about the benefits of organic swing tags for your business.

Uses Of Organic Swing Tags

You can use these tags to promote products like clothing, luggage, and jewelry effortlessly and cost-effectively. Moreover, it is a sophisticated and chic tool that makes the items even more stylish and branded. You can get the organic type because they are available in different finishes, and stocks, to make exceptional branding and unique items.

Go for the Embossed type

This type can be recycled with time. Mostly, eco-friendly materials can be used to make them. They can be used in the clothing center to label different items. You can print the price, size, and name of clothes on your embossed swing tags to deliver information. This will help your customers to get an idea about your garment.

The Demand For Foiled Swing Tags Is High

In the market, a vast range of organic types is available to serve different purposes. Just like organic and embossed types, the demand to use the foiled tags is high. These are easy to print and design.

Consult a Professional

If you do not know what size and style you need to use, do not worry. You should consult with the experts because they have the knowledge and expertise to make these products. Besides, they always use quality material to make your orders.

See The Template

Before placing your order, you need to check the vast variety of these products on the internet. You should also check the customer reviews. In this way, you will get an idea of which ones are best for your business.

While looking for branded tags, do not forget to ask about the prices. At this time, we suggest that you buy in bulk. It’s hard for designers to make only one piece for you.

They make a bundle of organic swing tags in one second with the best tag-making machines. So, tell them the number you need. You can show the template of what you like and want for your need. In this way, the expert worker will incorporate their own expertise to make attractive and eye-catching products.

Importance Of Foiled Swing Tags

Foiled swing tags on a product assure the buyer that they are purchasing a high-quality item. They can convince the consumer that they have chosen the proper size. They can demonstrate quality by exhibiting accolades, approving seals, or confirming the product’s legitimacy.

Boost Your Revenue

Because a swing tag is often the same size as a business card, it may convince clients with a short promotional message to enhance sales. They can promote a special offer so that buyers place a bulk order. It may also promote limited-edition items, encouraging buyers to purchase them while supplies last.

So, this was an introduction to organic swing tags and the benefits that they offer for your business.

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The Consequences of Stealing – Theft and the Law

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Theft can include armed robbery, burglary, theft by check, forgery, unauthorized use of a vehicle, fraud, false statement to a credit agency, shoplifting and the list goes on. The consequences for stealing range from a Class C misdemeanor to felony charges, usually depending on the monetary value of what was taken. If the value of the stolen item is under $1,500 then the perpetrator will most likely be convicted of a misdemeanor. This can result in a simple fine and/or community service, but could also involve jail time, depending on the circumstances. If the item stolen was of great value, the accused will most likely be charged with a felony and will have to serve prison time. At the time of a hearing the court will be notified if there is more than one offense on the suspect’s record and this will also affect the sentencing. People who steal generally do not do it just one time.

It is important to note that in some states, stealing of any kind is considered a “crime of moral turpitude”. This means the act of stealing is not a favorable action in community standards of justice, honesty or good morals. Even if you are charged with a misdemeanor, you will have a permanent criminal record that will follow you for the rest of your life. This can have negative effects on the wrongdoer’s character personally, legally and with future employment opportunities.

One of the most common forms of stealing is shoplifting. Shoplifting is the deliberate act of taking an unpaid item from a place of business and it happens more than we are aware. A person can be convicted of shoplifting even if they don’t walk out of the store, but are found with hidden merchandise in their possession. In some states, there is even a “law of Parties” meaning that if you are with a friend who is caught stealing in a retail establishment, you can also be prosecuted even though you didn’t intend on stealing. An average of $10 billion dollars’ worth of goods is stolen from retail businesses each year. The numbers and statistics are staggering. We all pay the price for people who commit these acts by having to pay more for products when companies pad prices to recuperate losses from shoplifters. The law does not look kindly on people who shoplift.

Bottom line, stealing is never a good idea and can land you in a world of trouble. It will affect the offender in many negative ways for the rest of their lives. Stealing also affects everyone in the community, in one way or another, which is why the laws are harsh. Thieves may think that they can get away with stealing, but eventually they will get caught and will be forced to face severe consequences.

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The Multiple Uses Of A Backup Email

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A backup email has so many uses that it really is essential for anyone that has an email to have a backup. A backup email is basically known as a secondary email that is most likely linked to your primary email.

The first use of such a thing is for the password recovery system of your primary email. Most of the time your primary email will contain all the important messages from your contacts such as a memo from the boss, a greeting from your family and so much more; your primary email is also where your contacts will be stored.

With such important data you will of course protect it with a password that only you would know. But what if you accidentally forgot your password, what can you do? Well you can use a basic feature that virtually all email providers have: the secret question feature.

This feature is where you are asked a series of questions, mostly around 2, that you have previously chosen and that only you know the answer to. The problem with this is that most of the time if the email you’re using has been around for a few years there is a big chance that you might have forgotten what the answer is; this is where a backup email comes into play.

You can choose to have your password be sent to your backup email. This provides you with fewer problems because you only have to check your backup email as opposed to having to try and remember what the answers to your secret questions were.

Other uses of a backup email would be either as a spam receiver or as storage for important messages. If you’re into the habit of subscribing to a lot of newsletters you will most likely receive a lot of spam mail and no matter how you filter those emails there will still be some that will be able to make it to your inbox.

What you could do is you could use your secondary email as the email that you enter when you subscribe to anything, that way all the spam mail will go to that email and you could just check it when you have the time to.

If you don’t see your backup as a spam receiver then you could use it as a password recovery email and as a backup storage for important messages, contacts and files. Ideally, everything that is digitized is supposed to have a backup so that when the primary data is lost there is still something that can bring it back.

What you could do is you could forward all important emails, save all contacts as well as store files in your secondary email so that you have a backup just in case you delete those things in your primary email.

A backup email has a lot of uses to the point that having one is turning out to be a necessity; just remember to try and have your backup with a different provider so that you don’t get troubled by ID security measures.

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3 Benefits of Web Analytics

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Web analytics is the process of measuring site statistics and analyzing traffic behavior. Here are there of the main benefits of web analytics.

It is typical for any business to do some data analysis. Data analysis is used to determine sales, profit, loss rate, and market interest. However, in terms of establishing a strong e-presence for your website, there is one tool that you could used in order to collect necessary data that you would need to promote your site.

Web analytics has been gaining steady popularity among websites, blogs and portals. It is used to analyze market trends and to identify website users or visitors. It is also used to determine the behavior of website users. It is a great tool to determine your latest website trends and your visitors’ or users’ preferences in terms of site features. Here are the benefits of web analytics.

Number 1: It helps monitor your visitors and users

With web analytics, you would know how long your visitor stayed in your website, who they are and where they came from. You will be able to know their clickstreams, the keywords they used, and how they came to be in your website (referrer pages, search engines, etc). You would be able to determine how many times a user or a visitor returned to your website and which pages were given preference.

In fact, a web analytics tool would tell you your website usage down to the last specifics. It would tell you about your visitor’s nationality and language. It can even pinpoint the city of origin. Of course, it will tell you the IP addresses and the host used for access. Further analysis would reveal if your visitors were there to actually check out your site or if they were mere strays. Most certainly, you will know how many visitors you get daily.

Number 2: It can help you optimize your website

Once you have carefully studied the actions of your visitors or web users, you would be able to act accordingly in order to optimize your website. You would also have an idea about the things that need changing and the aspects of your website that may appeal more to your market. You would know which pages are most viewed and which are basically ignored. You would be able to adjust certain aspects of your website that need improvement or adjustments. You could then fix any technical problems; or you could also improve, streamline or reshape site navigation to better assist your site users or visitors.

Number 3: It can help you formulate a sales and e-marketing plan

Web analytics will be able to assist you in preparing for an e-marketing plan and course of action. This will be more effective because your plan would be based on actual facts and not mere probabilities. You would be able to really know what your market wants. By tracking the items which were highly viewed, you would learn which products received the highest response. You would also be able to enhance other programs that you have already employed like pay-per-click or PPC advertising. You would be able to get more clients, as well as monitor and keep your clients interested.

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Business Technology in Small Business

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Business technology in small businesses can mean a lot of different things and can be interpreted in many different ways. But it will always come down to the same thing – the technology implemented and used by a business must provide the maximum amount of efficiency for the minimum amount of cost and maintenance.

Technology in business must be well planned and implemented in a sensible manner and a plan for technology management must be developed and adhered to. This may mean moving more of your business systems onto the internet to increase the mobility of your business, or identifying and investing in new systems which will do the same job but in a more efficient manner.

How Can the Internet Help My Business?

If you are looking to save money for your business, the internet is an excellent place to start. If your business includes a small call centre to provide customer service, you could save a lot of money in the long run by investing in changing the phone system to an IP telephony system. This would mean that rather than incurring massive phone bills using normal phones, all calls would be routed over the internet and customers would be able to call in using a normal local telephone number.

It is much cheaper to call someone through the internet than through a standard phone line and the savings you would make here would more than cover the cost of implementing such a system.

You would need to ensure that your business’ internet connection is powerful enough to manage this of course. If there is not enough bandwidth to accommodate all of the calls being made, the sound quality can suffer. As long as both parties can hear what the other is saying, this does not have to be too much of an issue – making allowances for this would need to be part of your business’ strategy for technology management.

What about My People in the Field?

If you have a large team of sales reps in the field, the savings which you could enjoy through the implementation of internet based telephony can be carried on to this side of your business as well. Nowadays, there are many mobile phones available which are capable of making calls over the internet using the 3G network. This would mean a possible upgrade of your corporate mobile phone contract and possibly some retraining for your staff – but ultimately it would save you money on phone bills.

How do I Know that My Company is Now More Efficient?

Technology in business also encompasses the assessment and monitoring of work performed by the employees. With modern networking and targeted technology management, it would be possible to not only make your company run more efficiently for less money; but also allowing you to keep an eye on exactly what is going on in real-time.

There are many products available which will allow you to monitor your employees’ statistics – be it the amount of time they are spending on each call or the amount of time they take to finishing each file before they are able to move onto the next one. Through this, you would be able to address any possible issues which may arise and discuss them with the employee.

Business technology should broaden the horizons. You should be able to do more for spending less. Something as simple as making phone calls cheaper or something as involved as identifying areas of concern in an employees performance and having more information which can be used to develop strategies for the employee to avoid this.

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Review of the BCIT GIS Program: A Boon to Canadian GIS Job Seekers

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When it comes to gaining an edge in the GIS job market, it pays to invest in an Advanced Diploma program to supplement the education you may have gained with regard to environmental science, geography or urban planning. While students often gain a cursory knowledge of GIS through their undergraduate work, it really does require a GIS focused program to set yourself apart in terms of the marketable GIS skills that employers often prefer.

I’ve examined several post graduate GIS programs in Canada and the US and I’m going to outline some of the best available. The first is that of the British Columbia Institute of Technology located in Burnaby. BCIT offers an Advanced Diploma in GIS that is designed for those with a university or college degree in a related discipline. BCIT offers the program to students on a full-time or part-time basis. This is a challenging program that will give you much of the technical knowledge you need to help set yourself apart in today’s job market.

The BCIT GIS Advanced Diploma program puts a strong emphasis on computer programming. They want graduates to not only be very skilled in customization and creating applications, but creating web applications as well. Students learn GIS as they apply to Java, Python, JavaScript, PHP among others. Thus, you will need to know about programming concepts and design before enrolling, though not necessarily familiar with any of the above languages in particular.

It should be noted that BCIT has admitted strong candidates whom did not have significant programming experience. In these cases, staff directed the potential applicants toward online programming tutorials to ensure they could gain basic programming fundamentals and to see if they would enjoy the programming aspect of the GIS courses. Students also use the web to present materials and thus need to know how to use HTML and an HTML editor before beginning courses. Students also find it highly beneficial to brush up on high-school math skills before classes begin.

In addition to the emphasis on programming, the BCIT program will give you an understanding in GIS as it relates to database structure, remote sensing, cartography as well as spatial analysis relating to both environmental and business applications. Students get hands-on experience with the latest ESRI and Autodesk GIS software and you will also be exposed to IT, management and organization issues as they relate to GIS. All your work culminates with a project/practicum course to gain real-world experience with a GIS employer.

Applicants must have completed a university degree, BC associate’s degree or have a diploma of technology before entering the program. Applicants with an international degree will need to submit for a full evaluation of credentials. In applying, students will also need to provide a resume and write a letter explaining their interest in the program and how they will prepare for the challenges it will bring. This is because the program is highly intensive with 30 hours per week in labs and lectures and a further 20 to 30 hours per week in coursework.

Past graduates explained to me that BCIT enabled them to stay within their particular fields of geology and marine biology respectively because they developed GIS as an extremely marketable skill through BCIT’s program.

BCIT’s relationship with employers for the final project/practicum can be extremely valuable because newfound GIS skills can be combined with a degree discipline which can lead to employment in the student’s chosen niche.

It should be noted that BCIT offers several GIS programs. They offer many of their introductory level GIS courses to people that are just looking to gain a working knowledge of how to use GIS applications by taking one or two courses. BCIT also offers a Bachelor of Technology Degree in GIS, aimed at students who, when they enter the program, have an Associate Degree or a Diploma of Technology and do not yet have a Bachelor’s Degree. The B.Tech in GIS consists of the same technical courses as the Advanced Diploma. As well, to earn the degree, the student must complete additional Management and Liberal Arts credits, and also complete six months of employment in the GIS field. Furthermore, in the fall of 2012, the Advanced Diploma program was offered in its entirety online through distance learning.

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