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Credit is at the heart of every successful small business. Both accessing credit from suppliers and lenders and providing credit to customers are crucial small business management tools. Here you will find information on how to manage your own credit policies as well as how to figure out what credit products are right for your business.
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Making smarter credit decisions: the bigger picture
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| In today's volatile financial world, making credit decisions can be fraught with uncertainty. Companies are often caught in financial situations that can be difficult to identify by traditional means. Credit providers need the whole picture to make informed decisions to mitigate risk in their business. |
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Growing your business through credit
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| Many SMEs have shied away from the provision of credit concerned that it can result in all sorts of problems for business cash flow. This is absolutely true - extending credit can be a disaster if it is provided to customers that don't have the capacity or willingness to pay on time. It can also be a disaster if SMEs don't take the time to plan and prepare for the impacts that credit terms will have on their business. |
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Need a loan?
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| Looking to start or expand a small business You're going to need funding and for most this will require a business loan. |
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Get those debts paid a little more quickly
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| As a small business there are several things that can make the debt collection process a little easier and perhaps get the debt paid a little quicker. Here are some practical examples. |
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Evaluate your suppliers
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| For a small business, the value of researching and investigating customers before extending credit is well known, but small businesses often don't do the same for their suppliers. |
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Credit checking is still essential
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| With the economy continuing to improve and pressure being put on small businesses to increase sales as interest rates rise, it is important to remember the value of obtaining credit checks. |
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Risky business
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| The ability to identify risks to your cash flow ahead of time is a key factor to long term business success. Find out how to avoid the common mistakes, identify the risks and increase the cash flow to any business. |
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Understanding bankruptcy
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| Bankruptcy is commonly understood as the state of financial insolvency in an individual or a business. If people are unable to reach a formal or informal agreement to repay their debts to their creditors then they can proceed with bankruptcy. In Australia, the law provides protection for the borrower, if they are unable to repay your debts. It also allows them to present a feasible solution to creditors. |
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Making smarter credit decisions: the bigger picture
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| In a volatile financial world, making credit decisions can be fraught with uncertainty. Companies are often caught in financial situations that can be difficult to identify by traditional means. Credit providers need the whole picture to make informed decisions to mitigate risk in their business. |
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Common credit traps
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| Being a small business owner it's highly likely you run a business which relates to something you are passionate about. As a consequence, you probably don't have a background in credit management and, if your operation is quite small, you may not have a dedicated resource specifically for this purpose. For those of you in this situation, there are many traps and pitfalls you need to be aware of. |
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Selected tendering reaps better recovery rates
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| Many businesses are unaware that the way in which you select a debt collection agency and the terms under which you appoint them, influences the way you receive debt collection services. Businesses should opt for a selected tender process as opposed to an open tender process in order to receive better recovery rates. |
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Partnering with your customers' payment processors
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| The difference between getting paid promptly versus 10 or 20 days late may not be liquidity problems or intentional holdups. Instead, it's often bottlenecks and fumbles within the customer's payment processing system. A successful strategy requires not only a good overview but the diligence to deliver on its promise. |
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A how to guide for providing credit
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| In most businesses, the extension of trade credit is a common element of client relationships. It can serve as an effective way for generating regular business and building loyalty among your customers. If customers do not abide by your payment terms, however, trade credit becomes fraught with risk, exposing your business to bad debt and eating into your cash flow. The following tips will help identify the red flags before providing prospective clients with trade credit. |
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Keep clients who cannot pay at bay
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| Over the past year and a half the shake-up of the stock market has sent shock waves through the business community, leaving more than a few companies struggling to stay afloat. In light of these uncertain times, now more than ever the ability of your customers and suppliers to pay their accounts on time requires careful management and attention. |
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Business credit - the myths vs the reality
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| Being a small business you may believe that your credit profile isn't all that important. You may believe that a credit profile only matters for large businesses and isn't really an issue of concern for you. Don't be fooled, your credit profile is critical you your business success. |
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The dos and don'ts of extending credit
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| As a small business owner it is your aim to make it as easy as possible for your customers to purchase your products and services. In most cases, this means you will accept credit cards as a form of payment - you may also extend credit terms to your customers. While extending credit to your customers is like offering an unsecured loan, it's a risk most SMEs are willing to take as it is simply seen as providing goods or services in return for a promise to pay. |
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Clients who won't pay
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| Cash flow is as vital to a business as oxygen. Savvy businesses won't wait for late payments and are proactively reducing their risks. Here are some tips to help your business reduce the risks associated with poor payers. |
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SMEs with established credit profiles have more options
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| More than one third (38 percent) of firms have indicated that they are experiencing difficulties as a result of tighter lending standards - this issue is expected to continue into the New Year and it is a key reason why SMEs need to ensure their business credit profile is in order. |
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When a customer files bankruptcy
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| It's always a big deal when one of your clients files bankruptcy, particularly if you are the one left with outstanding bills. The last thing you want to be doing at that point is scratching your head wondering what your next step should be. |
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Establishing business credit
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| Small business owners are often preoccupied with developing new products or services, but they can neglect something that may increase their odds of financial survival-establishing business credit. Small business owners should take steps to establish credit in the name of their business as a way to preserve cash flow for necessary business operations, purchases and rental payments. |
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Your credit profile
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| Every time you seek funds from a bank or try to sign up for a phone plan, an electricity account or an internet service, the service provider will use a credit bureau to asses your credit worthiness. This means understanding the credit application process and the information contained in your company's credit report is critically important, particularly for SMEs who are often impacted by bumps in the cash flow cycle. |
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Protecting your business from bankrupt customers
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| Being a small business it is likely that you are dependent on a relatively small number of customers and suppliers. As a consequence, if one of these key contacts goes belly up, the impact on your business will be significant. D&B research shows that one in ten Australian firms are at risk of experiencing significant financial stress or failure in the coming year. With that figure in mind, the need to protect your business from potential risk is clear. |
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Get paid on time
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| One of the biggest influences on your cash is your credit risk and accounts receivable function. Late payments and unpaid invoices can have significant detrimental impacts on business cash flow but avoiding the cash flow crunch can be a difficult task. |
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Planning your business finance
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| When you apply for finance with a lending institution they will want to know a lot of detailed information about your business. Being an SME, they will also want to know about your own personal credit history. The best way to tackle this situation is to be prepared - go into that meeting armed with all of the information they could possibly need and more! |
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Types of credit available to small business
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| With all the credit providers and products available it can be confusing to determine what product is best for you. Each can be useful however the key to getting the right finance is to understand what each offer means and how it is best used. |
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Bank overdrafts: are they right for you?
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| An overdraft is a short-term funding option designed to help a business through times when cash flow is low by allowing you to spend more money than you have in the bank. A bank overdraft isn't right for every business or every funding requirement - we examine some of the features that will help you to determine whether an overdraft is right for you. |
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Extending credit
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| Extending credit - to the right people, under the right circumstances - can be a boon to your business. It is generally recognised that extending credit to your customers has many of the following benefits.. |
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Credit Insurance: protection from late payers
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| Credit insurance is one method that businesses use to assist in managing their credit risk. Trade credit insurance can protect firms against the risk of bad debt by insuring them against the possibility that customers will default or become insolvent. |
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