What's New At Credit Matters?

Welcome to our February newsletter. The focus this month is on building resilience plus focusing on dealing with unpaid invoices.

This month’s quote and blog focuses on negative criticism received and how to help you become more resilient, think more deeply about your work and make you a better business owner or professional.

The conundrum this month focuses on whether to send your unpaid invoices to a debt collector or for legal action, or just keep trying to get them paid.

Our inconvenient truth is that emails sent regarding any outstanding invoices does not guarantee the invoices will be paid.

The Special Topic is based on article titled “X marks the spot. I was at the centre of and Elon Musk storm – and survived.” By David Swan.

The Brochure attached with this newsletter is for Whaite Partners and Associates based in the US. If you are an Australian interested in doing business in the US, or an American interested in doing business in Australia, I suggest Michael Whaite is worth contacting. Michael can assist from the smallest start-up/small business to the largest corporate business in either country.

Kim is available to help with your questions and concerns if you need any assistance, and as always, the first chat is always free of charge or obligation.

Quote Of The Month

Saul Eslakes responds about criticism received, “It helps me redefine his arguments.” In The Great Divide by Myriam Robin, AFR Magazine August.

Monthly Business Observation

Whether it be in our business or private lives, we are all going to encounter criticisms which can be perceived as an attack against self and/or our professional strategies and ideas. A number of criticisms will be outlandish, others will be as a defensive reaction to your comments or actions and others will be justified.

The issue however is to identify the nature of the criticism in order to understand what type of criticism it is and how to deal with it appropriately. A review of the nature of these different criticisms reveals the following.

The outlandish criticism needs to be taken for what it is, a distraction or a basic attack against you and/or your beliefs. Careful and thoughtful analysis will reveal whether it can be ignored, or needs a measured and unemotional response with relative facts.

The defensive response to what you said or acted, again requires careful consideration. If you believe you were in the right, your rebuttal should be as above, an unemotional response with relative facts. On the other hand, if you have inadvertently made a mistake, an apology should follow as soon as possible after checking the facts and finding that you were in the wrong. This situation can also lead to a valuable lesson which will serve you well in to the future.

The justified criticism is one where you were wrong or provided incomplete information and requires you to review the situation unemotionally. This situation can be emotionally difficult to accept at first. However, if you take the emotion out of the situation, and understand the intention of the person providing the criticism, you can actually learn something new.

A typical example of developing a positive level of self-esteem is when dealing with a potentially large dollar order or customer. Often management or salespeople will only see the potential dollars which might be made if the customer pays within agreed terms, and not all do. Consequently, they may succumb to temptation and fail to complete due diligence properly and/or fail to ensure that the terms and conditions are equitable and reasonable for their business and the customer.

As a result of the above, the supplying business entity is then subject to the whims, desires and financial needs of the customer. Inevitably when this situation occurs, the supplying business often faces a loss situation, which may even lead to the demise of the business.

In order to deal with all criticisms properly, we need to develop three sets of skills. First is to manage our own feelings of outrage or negativity, second is to take the time to analyse what was actual said, and third is to respond in a positive fashion. If you can achieve these skills, it will help you build a positive level of self-esteem and resilience. In other words, you will have dealt fairly with the response and become a stronger individual or business owner/manager as a result.

This Month's Business Inconvenient Truth

One of the many benefits of modern accounting and account receivable systems is that you can organise an email to be sent automatically for any unpaid invoices. What this sales pitch doesn’t tell you, is that even if you send these emails, there is still no guarantee that you will be paid.

After all, you still don’t get paid if:

1. the customer has no money,
2. doesn’t want to pay,
3. has a problem with the invoice or
4. simply uses their own technology against you by authorising your emails to be treated as spam, etc.

It also comes down to timing and the dollar size of the invoice(s) outstanding as to when you should follow up for payment. It is not unusual in these situations to make contact before the invoices are actually due to find out what issues may prevent payment as per terms.

In either of the above situations, no matter how many emails you send for unpaid invoices, will you may note receive a contact or payment. Consequently, a phone call or calls will still be required to ascertain why the invoice(s) remain unpaid.

At the end of the day, most causes for non-payment of invoices are resolved by an initial phone call and any issues raised, can be dealt with immediately. So, why delay making the phone call in the first place?