SMALL
BUSINESS
More
Holidays
By Law
Employees
are now
entitled
to 4 weeks
paid
holiday a
year, from
23 Nov.
Part-time
employees
who work
one day
per-week
will be
allowed
four days
annual
holiday.
BANKS
Barclays
Double
Blow
The cash
point wars
are
heating
up.
Barclays
offer a
free
service to
it's own
customers,
but charge
other
banks
cardholders
£1.00 per
use. This
means that
Abbey
National
customers
using a
Barclays
cash point
will be
charged
£1.50 by
the Abbey,
and a
further
£1.00 by
Barclays,
a total of
£2.50.
Royal Bank
of
Scotland
allow free
withdrawals
from any
Link cash
point.
(Ed:
Barclays
should
follow
suit with
Lloyds and
get their
own black
horse: and
call it
Black Bess
of course)
COMPANIES
HOUSE
Rag Trade
Blues
The DTI's
latest
figures
show that
over 870
directors
were
disqualified
between
March and
September
this year,
an
increase
of 35 per
cent over
the same
period
last year.
The rag
trade was
the worst
offending
industry
with 10%
of all
directors
banned
working in
this
sector. In
most of
the cases
the orders
had been
made
within
just over
a year of
the date
of
liquidation.
It is this
abuse of
the
privilege
of limited
liability
that the
government
is
determined
to stamp
out.
Source
AccountingWeb
Accounting
has found
that the
URL
Inland
Revenue
belongs to
Harpenden-based
accountant
Hicks and
Company.
Will the
Revenue
have to
pay to buy
it back?
BOOKMARK
Low-Down
on TelComs
OFTEL have
a site
packed
with info
about BT
and 'LocalTel'
type of
companies.
Worth a
look/bookmark
before you
consider
any such
move.
Oftel
SHORT BITS
Hmmm
That's
Interesting
A recent
survey
by
Churchill
Churchill
revealed
the
following
about the
most
likely
first name
of - car
driver:car
make.
Kev and
Sharon =
Ford
Escort (no
surprise
there)
John and
David =
Ford
Granada
(don't
John's
drive a
Jag or
two?)
Sarah =
Peugeot
205, VW
Golf
(middle-class
bourgeois)
Gary =
Ford Orien
(so,
that's who
stole my
car)
Susan =
Nissan
Micra
(lasts
about as
long as
her
boyfriends)
Damon,
Mika,
Eddie =
High
Premium
If you
have a
web site
with
information,
or just
information
that net
users
would want
to see you
can
syndicate
it at
YellowBrix,
you can
also get
info for
your site,
lots of it
professional
and free.
The
site
Amazing
Surgeries
is about
to eclipse
all before
that have
shown live
ops, by
live
webcasting
a
sex-change
operation
on
10/12/99.
(Ed:
Purely
coincidence
that I am
out of the
office
that day.)
TOPIC
This
week’s
Topic is
Credit
Policy,
and is
also the
start of a
three-part
article
giving an
overview
of Credit
& Debt
Management.
Next
week’s
article
will
provide an
overview
to
Credit
Control
Overview
of Credit
Policy
When do
you first
think of
Credit
Management?
A lot of
businesses
start
thinking
of Credit
Management
when their
customers
stop
paying!
When the
customer
stops
paying
this is
called
Debt
Management.
So, what's
the
difference!
Credit
Management,
in broad
but
essential
terms, is
sound
sales,
backed by
effective
and
efficient
revenue
collection
resulting
in
profitable
sales.
Credit
Management,
in more
detail,
starts
with a
reliable
Credit
Policy.
A Credit
Policy
should
outline
your
company's
strategic
and
operational
requirements
from
credit
sales. It
is not
sufficient
to provide
credit to
your
customers
"because
everyone
else gives
credit".
You need
to
evaluate
what your
company
needs from
your
credit
sales i.e.
INCREASED
SALES
IMPROVED
PROFITABILITY
NEW
CUSTOMERS
INCREASED
MARKET
SHARE
You can
see that
all of the
above are
driven
with the
aim of
producing
profitable
growth,
and not as
a service
to be
abused by
customers.
So, you
have
decided
why you
want to
offer
credit to
our
customers
(the
strategy)
now we
have to
implement
systems,
procedures,
limits,
and
authorities
in the
following
areas:
TRADING
TERMS
VETTING
CONTROLS
CREDIT
SUPPLY
LIMITS
INVOICE
MANAGEMENT
CONTROL
SOFTWARE
Some of
you with
the
smaller,
small
business
are
probably
thinking
that you
do not
need to
implement
much of
the above
as you
deal in
small
numbers.
The facts
are the
smaller
your
business
the more
likely you
are to
suffer a
bad debt.
The
reasons:
The larger
companies
have the
‘better’
customers.
The larger
companies
can choose
their
debtors.
The larger
companies
have more
resource
to vet
customers.
The larger
companies
always vet
their
customers
The larger
companies
do not
attract
serial bad
debtors.
The larger
companies
have
dedicated
staff to
deal with
debtors…
I am sure
you
could now
add more
to the
above
list. The
situation
for the
small
business
looks
precarious:
and it is!
The sooner
‘large
company’
credit
policy
procedures
are
adopted
the sooner
you will
have
increased
control of
your
company’s
future.
You must
never feel
that by
insisting
on every
credit
customer
to follow
your
credit
procedure
that you
are ‘over
doing it’
or that
you risk
loosing
the sale
through
being ‘too
careful’.
Your
trading
terms say
as much
about your
company’s
unwillingness
to suffer
professional
debtors as
you could
say in a
thousand
words.
Do you
clearly
state when
payment is
due? Do
you state
that you
will
charge
interest
on
outstanding
invoices –
you have
always
been able
to charge
interest,
you did
not have
to wait
for the 'Late
Payment
Act'.
When
vetting
potential
customers
do you
rely on
any one
piece of
information:
say, a
credit
reference
report, or
a bank
reference,
trade
reference
etc. If
you use
none of
these, I
suggest
you do,
and if you
use only
one, I
suggest
you use
more. Do
you ever
ask for a
'director's
guarantee',
if they
refuse,
draw your
conclusions.
Do you
provide
more than
two months
credit to
any one
customer,
if so, you
are more
likely to
suffer bad
debt? Some
would say
that it is
safe to
supply 10%
of Net
Worth or
20% of
Working
Capital -
however,
this means
you must
trust the
published
accounts!
A simple
Credit
Policy
with
manageable
procedures
will help
build your
business
on minimum
risk
sales:
these are
the sales
that are
numerous
and
provide
guaranteed
profit
levels.
Next Week:
Overview
of Credit
Control
