In these difficult times the “hard nose” approach has merit

  

As funding issues continue to bite more and more customers are actively employing various tactics to delay payment to suppliers. Credit control and the monitoring of payments is an increasingly critical element of every business.

By exceeding the agreed payment terms customers are in effect using their supplier as an alternate (unsecured overdraft).

This situation if left unchecked can spiral out of control. In a worst case scenario the supplier is in reality forced to keep “trading” with the errant customer for fear of realising a bad debt.

Think of the parallels to the Greek debt situation and the Eurozone “bail outs” – it is a slippery path.

Slack policing of accounts receivable will have serious consequences. At best tardy payments damage cash-flow and at worst can often be the precursor of a company failing with the end result of a total write off.

 

Take a long hard look at your accounts receivable – are you comfortable to see 30 days drift into 60 and beyond?

 

Consider the damage that is being done to your company’s financial position and respond accordingly.

Commercial post mortem – now the problem is clear

 

The results of commercial post mortems leave the management and shareholders of troubled organisations asking “how did that go wrong?”

It is an incontrovertible fact that many companies fail to address problem issues early enough to avoid an oncoming crisis.

In reality the causes of the problems were readily visible.

The signs of a troubled business are all too apparent – these include lack of controls, lack of strategic vision, a demotivated workforce and obsolete or valueless stocks etc

Instead of grasping these nettles, often the preferred option is to engage in a variety of exercises ranging from ill judged acquisitions (think RBS/ABN), totally pointless projects such as rebranding or the launch of another product range destined to fail for the above reasons.

Inevitably the harsh realities come into play but for many companies it is at that stage too late in the day.

 

Multichannel marketing

The retail sector is facing particular challenges at present with the survival of many outlets resting upon the results of their Christmas trading.

Much talk in recent times has focussed on the demise of the traditional British High St. There is a tendency to feel that all would be well if instead of the plethora of Charity shops, Discount Retailers and Pay Day Loan outlets they were to be replaced by Butchers, Bakers & Candlestick Makers.

In reality there is no going back to this perceived “Golden Age”. The new buzz word in retailing is "multichannel", loosely defined as a strategy that involves selling through stores, websites, mobile phones, catalogues, social networking sites, et cetera. Basically it is an all encompassing process designed to maximise sales revenues.

Not all business models can embrace this system but there has rarely been a time when the old adage of “work smarter” has been more relevant.

As more and more obstacles are thrown up to threaten operating margins everyone in any commercial organisation must ensure that they are operating at optimum efficiency.

Whilst many retailers are pinning their hopes on “multi channelling”, they are not the only sector having to radically re-think strategy in these times of austerity.

The inability to adapt to the requirements of the changing market place will inevitably see many companies joining the ranks of corporate failures in the months ahead.

Respect geography or face the consequences

One of the most valuable commodities available to any organisation is local knowledge.

How many times has a venture ended badly owing to a basic failure to understand and deal with local market conditions?

The UK is a mature and sophisticated market and though offering different challenges to operating in a 3rd World destination there are still obstacles in trying to establish a presence.

Operating overheads present a crucial challenge and this is where we can assist you to achieve a cost-effective solution to marketing your products in the UK.

Take a look at our website www.glbconsulting.co.uk

or check out our video link http://youtu.be/ruUtQnlJwVM

 

Unserviceable debt – who carries the can?

 

“If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem” the famous quotation from JP Getty neatly sums up the dilemma faced in dealing with unserviceable debt.

 

Last year the “Greek problems” took centre stage. In the interim the problems in Southern European States such as Italy and Spain have still to be resolved.

Austerity has failed to bring public finances and debt under control. Increases in taxation and cuts in government spending have led to sharp contractions in economic activity, reducing government revenues and increasing welfare and support payments as unemployment rates increase. Budget deficits, while smaller, persist and debt levels continue to rise.

 

The fact is the international community will have to learn to accommodate the spectre of countries failing to grapple effectively with their debt burdens. In turn this will inhibit growth and limit the speed and strength of global economic recovery.

 

It continues to be an uncertain time but one undisputable outcome of the above will be the hard ball attitude of the Banks towards companies seeking funding.

 

Now more than ever it will be necessary to demonstrate effective control over all areas of cost and exposure as the banks will undoubtedly remain reluctant lenders.

 

Taking the pitcher to the well once too often

 

The most important component in any business relationship is the question of trust.

The ultimate demonstration of trust and good faith is when a supplier delivers goods to a customer on Credit terms.  

It therefore is incumbent on the buyer that they acknowledge this act of trust and observe the agreed payment terms.  

Faced with the current pressures it is easy to understand the temptation of “pinching” a few days extra credit but this type of behaviour soon begins to pall.

Once a supplier feels that their buyer is taking undue advantage, the relationship is damaged sometimes irreparably.  

For any relationship to be sustained there has to be mutual benefit.

When a buyer gains a reputation for persistently crossing the line the merit in maintaining the account is called into question.

 

The value of the human touch

Companies have traditionally thought of customer service as a cost centre, which made it a ripe target for cuts during the downturn. That has contributed to increasing frustration among consumers who have suffered with poor service in recent years.

 

Although many operations are completed electronically in this virtual world we should never forget that essentially commerce is about people trading together.


The reality is that goods need to be moved from point of production to point of consumption and obviously the diverse elements which make up this chain cannot be achieved solely via a computer terminal.


It makes sound economic sense to foster and maintain good customer relationships as it has been determined that it costs up to five times as much to win a new customer as it does to retain one.


There is an old adage “value your customer,” this dictate has never been more important than in these uncertain and challenging times.