Profit Management

The single most important asset of any company must be its customers. From this source both the immediate and future wealth of the business is generated. In the transitionary period from making sales to the ultimate realisation of those sales into the crystalised form of money, an invisible erosion takes place during its journey from your customer to your bank account. The section of your business that oversees this crucial journey is also the one that in many companies is the least understood and in most instances is given the lowest priority. A reassessment of attitude and a widening perspective is long overdue in respect of the Credit Control Department. Such is the importance of the function in today's economic climate that its title should be renamed as the Profit Management Department. Yet regrettably many firms today still regard the credit function as a means only of collecting overdue accounts. They ignore the potential of the function as both a source of increasing sales and as a profit centre in its own right

Risky Business!

Any transaction that involves giving credit must also involve the taking of a certain amount of risk. The risk is impossible to eliminate but it can be greatly reduced by the introduction of a credit management policy and a systematic collection cycle. Whilst employing such methods flexibility must exist to allow for the exceptions that will occur from time to time. Consideration to a number of points must be exercised when forming a policy, particularly in relation to debtors who have historically good payment records. Other factors involve assessing future sales potentials, settlement terms being offered by your close competitors and any special considerations that exist in your particular industry

What Are You Collecting?

Overdue accounts are a fact of business life. Ironically the more you have, subject their quality and the speed with which they can be collected, the better your business is performing. And not only that what are you actually collecting - debt or profit?

Let's look at this logically and dispel a myth. The money you collect could be either capital or profit but based upon the fact that only a few debts become difficult to collect the last little bit is undeniably 100% pure unadulterated profit.