How to mitigate risk in your business by using the right tools
by Kevin Vlietman – Transaction Capital Business Solutions.
With 2017 already in full swing, businesses are likely to be cautious about the outcomes of the National Budget – where additional pressure on operational cash is likely. As a result, many businesses are likely to relook their credit management processes to ensure they are able to improve business efficiencies and very importantly, their cash flow.
Unfortunately, a sale is not a sale until the cash is in the bank and countless businesses spend as much time, if not more, focused on managing debt collections than on sales and strategy which is detrimental in the long run. In fact, effective credit management often requires a dedicated resource which can be scarce and costly. However, a professionally executed credit control process is critical not only in terms of managing risk, but also in terms of managing cash flow.
It is for this reason that many companies look at an outsourced credit management and collections service that not only takes the stress out of debt collections, but also ensures they have a proper credit policy in place which goes a long way in opening up the business to debtors but mitigating risk as well.
In fact, did you know that affording your customers risk-free credit terms is one of the best ways to stimulate and grow your business? Providing credit to your customers can be a scary and risky undertaking, as there are a number of factors that fall out of your control once you decide to go this route. Risk-free credit can only happen when you have the right credit risk management strategy in place and a full understanding of your rights in terms of collecting outstanding money from your clients.
So it is advisable to look for a partner who not only understands credit risk and the strict corporate governance data security and legislative requirements associated with it, but also a company that understands your unique business and is able to help you set up the right credit risk management process for your business.
Growing your customers to acceptable risk levels while having a dedicated team of credit risk, strategy and account receivable and recovery specialists, can go a long way to ensuring a successful business. So know what options you have available to you, use the right tools and partners to mitigate risk – and keep your cash flow healthy through 2017.