Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

POINTS TO YOUR CREDIT

POINTS TO YOUR CREDIT Finance amazed by the number of companies that grant virtually unlimited credit to a customer. Full balance sheet information is vital. It should also be POINTS TO backed up with both bank and trade references. Agree your terms of trade: Don't just let your customers assume that your terms of trade are 10 days, 30 days or YOUR CREDIT whatever. Write and tell them. And get them to write back acknowledging their acceptance of your terms of trade. After that, they've got no excuse what­ At a time when several major companies are bringing in soever. Issue your invoices and statements tougher credit measures, Paul Brooks — chairman of promptly: If you are going to invoice British Debt Services — offers advice to smaller on delivery, do it. If you are going to companies on the problem of unpaid bills. invoice at the end of the month, do it. Don't say one thing and do something else. It lets your customers see that, maybe, there is room for negotiation BE warned. Over 3,000 companies maintain their cash flow. on your credit terms. Once that have already crashed this year. And it's That is why it is vital that they happens you are lost. going to become more and more should move now. And move fast, Up-date your accounts receivable on a difficult for small and medium-size while they still have time on their side. weekly, if not daily, basis: Just as it is companies to survive. For those It's no good thinking of credit manage­ important to issue your invoices and standard terms of payment you see at ment when you turn the corner into statements on time, so it is vital to keep the foot of your suppliers' invoices are Carey Street. an up-to-date record of accounts about to be enforced — with a As one of the largest credit manage­ receivable. That way you are vengeance. ment organisations in Europe, we are completely in the picture. Nobody can Already the giants are beginning to perhaps in a unique position to see slip through the net. get tough. And when the giants get both sides of the picture. We are also in Move fast if the money doesn't come in tough, small and medium-size com­ a good position to judge the effective­ on time: Don't wait a couple of days panies have virtually got to give in. Or ness of different companies credit because the cheque might be in the give up. management policies. post. It probably isn't. If you've got to Take ICI, for example. They have My advice, therefore, to companies settle your own accounts with your already given notice to their UK thinking of strengthening their credit suppliers by the 20th of the month, customers that they are going to cut the departments is quite simple: Get a your own customers have got to learn length of credit by around ten days good manager. Give him full control. to move fast as well. from the end of the year. And stick to it. Similarly Alcan Booth and Alcan My own advice is that if the money Ther e is nothing worse than (UK) have imposed a credit limit of has not arrived on time, send out one establishing a credit department and reminder letter threatening to hand the only 30 days from invoice date. refusing to listen to their recommenda­ Shell Chemicals UK are also account over to a debt collector for tions. collection within 10 days unless the considering similar moves. Next, ensure that your credit depart­ money has been received by then. A And who can argue with them? ment talks to your sales department. ICI maintain that if their customers prompt follow-up works wonders. And that your sales department talks Move decisively if the money has not pay them by the 20th of the month to your credit department. come in on time: Hollow threats are following the month of invoice, rather There is little point in selling your than the end of the month as at pre­ useless. Once a company realises you products, if you're not going to get don't mean what you say, you've got sent, this will give them a once-and- paid for them. problems. for-all cash injection of at least £25 "Any sale is worthless unless it is million. Which, you must admit, is If the money hasn't come in by the paid for," is a motto worth pinning on worth the effort. time it should have done, put the the desks of both your sales manager Shell Chemicals, by comparison, account out to a debt collector and let and your credit manager, especially have estimated that if their customers them get on with it. If they feel the only over the next few months. were just one day late in paying their way is to go to court, go to court. It That's the management structure. bills this would cost them an extra might not appeal to you but, don't for­ Now, the policy. £600,000. The once-and-for-all saving get, you've got no choice. Your cus­ Get the facts: Before you open up a tomer freely entered into a credit for them, by bringing their credit credit account, get all the information period back 10 days, would be around agreement with you. You kept your you can about the company con­ £6 million. side of the arrangement. He didn't cerned. The best way to do this is to keep his. And the same story applies to all the draw up your own credit application It's a simple matter of you or him. giants of British industry. forms and get your customers to fill it But that is only one side of the coin. And, let's face it, you don't want to in — in full. On the other side are all the smaller add to that list of company failures — Check their credit worthiness: or do you? ■ companies desperately fighting to Obvious, perhaps, but you would be DECEMBER http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Industrial Management Emerald Publishing

POINTS TO YOUR CREDIT

Industrial Management , Volume 76 (12): 1 – Dec 1, 1976

Loading next page...
 
/lp/emerald-publishing/points-to-your-credit-ohKdbQVdrd
Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0007-6929
DOI
10.1108/eb056695
Publisher site
See Article on Publisher Site

Abstract

Finance amazed by the number of companies that grant virtually unlimited credit to a customer. Full balance sheet information is vital. It should also be POINTS TO backed up with both bank and trade references. Agree your terms of trade: Don't just let your customers assume that your terms of trade are 10 days, 30 days or YOUR CREDIT whatever. Write and tell them. And get them to write back acknowledging their acceptance of your terms of trade. After that, they've got no excuse what­ At a time when several major companies are bringing in soever. Issue your invoices and statements tougher credit measures, Paul Brooks — chairman of promptly: If you are going to invoice British Debt Services — offers advice to smaller on delivery, do it. If you are going to companies on the problem of unpaid bills. invoice at the end of the month, do it. Don't say one thing and do something else. It lets your customers see that, maybe, there is room for negotiation BE warned. Over 3,000 companies maintain their cash flow. on your credit terms. Once that have already crashed this year. And it's That is why it is vital that they happens you are lost. going to become more and more should move now. And move fast, Up-date your accounts receivable on a difficult for small and medium-size while they still have time on their side. weekly, if not daily, basis: Just as it is companies to survive. For those It's no good thinking of credit manage­ important to issue your invoices and standard terms of payment you see at ment when you turn the corner into statements on time, so it is vital to keep the foot of your suppliers' invoices are Carey Street. an up-to-date record of accounts about to be enforced — with a As one of the largest credit manage­ receivable. That way you are vengeance. ment organisations in Europe, we are completely in the picture. Nobody can Already the giants are beginning to perhaps in a unique position to see slip through the net. get tough. And when the giants get both sides of the picture. We are also in Move fast if the money doesn't come in tough, small and medium-size com­ a good position to judge the effective­ on time: Don't wait a couple of days panies have virtually got to give in. Or ness of different companies credit because the cheque might be in the give up. management policies. post. It probably isn't. If you've got to Take ICI, for example. They have My advice, therefore, to companies settle your own accounts with your already given notice to their UK thinking of strengthening their credit suppliers by the 20th of the month, customers that they are going to cut the departments is quite simple: Get a your own customers have got to learn length of credit by around ten days good manager. Give him full control. to move fast as well. from the end of the year. And stick to it. Similarly Alcan Booth and Alcan My own advice is that if the money Ther e is nothing worse than (UK) have imposed a credit limit of has not arrived on time, send out one establishing a credit department and reminder letter threatening to hand the only 30 days from invoice date. refusing to listen to their recommenda­ Shell Chemicals UK are also account over to a debt collector for tions. collection within 10 days unless the considering similar moves. Next, ensure that your credit depart­ money has been received by then. A And who can argue with them? ment talks to your sales department. ICI maintain that if their customers prompt follow-up works wonders. And that your sales department talks Move decisively if the money has not pay them by the 20th of the month to your credit department. come in on time: Hollow threats are following the month of invoice, rather There is little point in selling your than the end of the month as at pre­ useless. Once a company realises you products, if you're not going to get don't mean what you say, you've got sent, this will give them a once-and- paid for them. problems. for-all cash injection of at least £25 "Any sale is worthless unless it is million. Which, you must admit, is If the money hasn't come in by the paid for," is a motto worth pinning on worth the effort. time it should have done, put the the desks of both your sales manager Shell Chemicals, by comparison, account out to a debt collector and let and your credit manager, especially have estimated that if their customers them get on with it. If they feel the only over the next few months. were just one day late in paying their way is to go to court, go to court. It That's the management structure. bills this would cost them an extra might not appeal to you but, don't for­ Now, the policy. £600,000. The once-and-for-all saving get, you've got no choice. Your cus­ Get the facts: Before you open up a tomer freely entered into a credit for them, by bringing their credit credit account, get all the information period back 10 days, would be around agreement with you. You kept your you can about the company con­ £6 million. side of the arrangement. He didn't cerned. The best way to do this is to keep his. And the same story applies to all the draw up your own credit application It's a simple matter of you or him. giants of British industry. forms and get your customers to fill it But that is only one side of the coin. And, let's face it, you don't want to in — in full. On the other side are all the smaller add to that list of company failures — Check their credit worthiness: or do you? ■ companies desperately fighting to Obvious, perhaps, but you would be DECEMBER

Journal

Industrial ManagementEmerald Publishing

Published: Dec 1, 1976

There are no references for this article.