E-BANKS
15 Year
Old E-Bank
Did you
know that
net
banking
has been
going on
for 15
years? The
Bank of
Scotland
has
operated a
net
banking
facility
since
1985. The
system,
called
Hobs,
'currently'
has
350,000
users. Not
bad for a
bank that
launches
it's
'first'
day of net
banking
Monday
21
November.
Source:
Financial
Mail
Egg on
Egg's Face
Egg, the
ones who
pay more
in
interest
to
depositors,
than they
charge
borrowers,
has
had to pay
out lots
of
compensation
to their
new card
holders.
The new
card
holders
have
been
joining
Egg
and having
their
balances
transferred
from their
existing
card
companies.
However,
as with
many
rushed and
ill-conceived
launches,
egg's
administration
has been
unable to
settle the
balances
due on the
other
cards -
resulting
in loads
of
interest
(egg say
they will
take
responsibility).
Makes you
wonder how
much value
is
placed on
each new
customer
(or how
much they
are going
to make
out of
them).
MILLENNIUM
BUG
Y2K
Collection
Action
The
'Better
Payment
Practice
Group'
have
issued the
following
points
concerning
revenue
collection
for the
end of
year
paralyses:
-
Identify
customers
that owe
you the
most -
and also
those
that you
cannot
afford
to lose
-
Check on
'their'
progress
with the
Y2K
project
and
contingency
plans -
and
review
the
level of
risk
with
each
customer/client
-
Ensure
you are
paid on
time in
November
and
December
- and
consider
ways of
encouraging
early
payment
-
Ensure
invoices
due in
early
2000 are
correct
and sent
out
promptly
-
Check
with
major
customers
(and
also
with
your
bank) in
early
January
that
their
systems
-
are OK
and
discuss
alternative
arrangements
if they
have
problems
CREDIT
MANAGEMENT
Fergie's
Under Rich
Men Again
Credit
Managers
and
visitors
surveyed
at the
recent
Credit
North
event were
asked to
rate
a number
celebrities
and their
credit
worthiness
out of 5.
Source
'Credit
Finance'
01. 4.84
Paul
McCartney
- (once a
singer)
Winged his
way to the
top
02. 4.67
Cliff
Richard -
(never a
singer)
Always
close to
those
above
03. 4.60
Richard
Branson -
(opportunist,
sorry
entrepreneur)
being 3rd
went down
like a
lead
balloon
04. 4.59
Bill Gates
- (a
victim)
Claims
everyone
else has
monopoly
money
05. 4.36
Eddie
George -
(legitimate
bank
account
robber)
Can go up
or down
once a
month
06. 3.76
Tony Blair
-
(President)
Should
have spent
a penny
and a £1,
13 weeks
ago
07. 3.75
Jeffery
Archer -
(unemployed)
- 'A Great
Man' [he
told me to
say that]
08. 3.65
William
Hague -
(ditto)
credibility
has always
been a
problem
09. 3.60
Gordon
Brown -
(The real
PM) what a
waste of a
girlfriend!
10. 3.49
Bill
Clinton -
(Artefact
explorer)
Did not
pay for
cigars,
the
creditor
will not
repossess
11. 3.05
Michael
Portillo -
(I'm
b*******
if I know)
Bank
manager
stands
firm
behind him
12. 2.53
Peter
Mandelson
- (A
bandit
dealing
with
terrorists)
uses a
money
belt, and
dog
collar
13. 2.30
Boris
Yeltsin -
(Madame
Tussauds
back-up
for the
dummy)
hic!
14. 2.25
Sarah
Ferguson -
(Royal
thorn
'bush')
makes
money out
of royalty
- a true
royal
Source:
Names and
figures
'Credit
Finance' -
Comments:
I'm not
saying.
INTERNET
Children
Get
Telephone
Porn Shock
Parents
could soon
be
automatically
paged or
called on
their
mobile
phone if
their
children
try to
access a
pornographic
site. The
program,
Cyber
Sentinal,
can block
sites, as
many
do at
present,
but will
also page
a parent
if a site
requests a
credit
card
number.
The
software
will let
you
browse,
but not
buy.
(Ed: I'm
sorry, but
this is
too good
an
opportunity
not to
state the
obvious.
This
software
sounds
great for
anti-female
shopping.
Mind you,
she might
think the
same for
him!
(let's not
bother
with the
software -
and the
children
sigh with
relief)
TOPIC
(Request
from Alex
in Stoke)
We have
covered
the
subject of
discounts
in our
database
however.
Discounts
for Early
Payment
"A two
(2)%
discount
of the
invoiced
amount
will be
allowed if
full
payment is
received
within
seven (7)
days of
the date
of the
invoice."
In the
above
example we
have given
a common
discount
figure and
a less
than
average
number of
days to
take the
discount
option.
The
figures
you use
must be:
affordable
(to you
the
supplier),
profitable
(after the
discount
is taken),
controlled
(after the
7 days, no
discount
can be
taken).
The
supplier
and the
customer
must both
benefit
from a
discount.
supplier’s
benefits:
* faster
cash flow
* can be
used as a
sales aid
* reduced
finance/bank
charges
* improved
probability
of
receiving
payment
customer's
benefits:
* genuine
savings
* improved
margins
* can
off-set
price
increase
* can
negotiate
higher
discount
rate for
large
orders
Some
companies
enter the
amount of
discount
allowed,
together
with the
discounted
balance on
the actual
invoice.
The
problem
with this
is that
the
customer
in seeing
the
discounted
invoice
total,
after the
allowed
period, is
always
tempted to
send you
the
reduced
payment.
It is not
unusual
for
customers
to take
discounts
even when
paying 30,
40, 50
days late.
You need
to make
your
customer
aware that
you will
not accept
such
action.
Discounts
are viable
when you
need fast
cash flow,
or have
sufficient
working
capital,
or your
own
financing
is
inexpensive.
However,
if you
cannot
afford
discounts
you must
resist the
temptation
to do so,
unless
your
customer
wants a
large
order.
Some
customers
would
never
consider
paying
late,
therefore,
by
offering a
discount
you
are
drastically
reducing
your
profit for
a small
gain in
days. You
should use
discounts
as
a
strategic
option, be
that to
increase
sales or
improve
cash flow.
Once you
start
offering
discounts,
trying to
stop them
will seem
like a
price
increase
to the
customer.
In fact,
after a
short
period the
customer
will not
even
consider
the
discounted
price as
anything
other than
normal
with the
following
statement
not
uncommon,
"I've
always
paid you
in
time for
the
discount,
and now we
have a few
cash flow
problems
you want
me to pay
the
full
amount",
it
happens,
often.
The
Basic
Discount
If you get
an invoice
totaling
£900
including
vat,
offering a
2%
discount
if settled
in 20 days
this means
2% from
the vat
inclusive
figure (in
the
absence of
any other
comment).
£900
divided by
2
multiplied
by 100 =
£18.00
discount.
Invoice
Discount
or Delayed
Payment
If you
currently
pay your
supplier
invoices
at 60 days
from
invoice
date, and
your
supplier
is now
offering a
discount
of 2% if
you settle
in 20 days
from
invoice
date. You
need to
work
out
whether it
is in your
financial
interest
to take
the
discount,
here's how
to do
this:
Discount
offered 2%
divided by
100, less
the
discount
amount
(100 - 2 /
98) =
0.020 x
365 =
7.448
divided by
the
difference
between
your
current
payment
period '60
days'
and, the
number of
days to
qualify
for the
discount
'20' (60 -
20) being
40
= 0.1862
being
18.6%.
Not to
confuse
you, or
me,
further,
the final
figure of
18.6%
means that
if you can
borrow
money for
less than
this
figure you
should
accept the
discount,
even if
this
means an
overdraft
at less
than
18.6%.
If you
borrow
from your
bank at
12% per
annum and
you give
your
customers
a 2%
discount
if paid in
20 days,
the cost
of the
discount
equates to
waiting 60
days for
every
invoice to
be paid,
but you
will get
your money
40 days
quicker.
