Credit Management – the healthy living plan for business   Leave a comment

USA national credit rating down-graded – should we worry?  You bet!  The writing was on the wall in giant neon letters visible a mile off – but it seems no-one could read.  Companies too of all sizes ignore warning signs and try to work through periods of over-trading everyday, hoping that by disregarding the symptoms, their problems will disappear.  We’ve seen what the results of this behaviour can be.

Parallels can be drawn between the health of a business and personal health.  We all know how vital it is to stay fit, eat a balanced diet and watch our weight, but modern life makes it all too easy to be lazy, and the healthy option is often seen to be too boring or bothersome.  The same is true in business.

Cash is often described as the life-blood of business and is required for corporate fitness.  Restrict blood-flow and there’s a serious danger to health.  Poor cash-flow can be likened to the hardening of arteries – circulation is affected, symptoms start to appear, health dwindles and the risk of heart failure soars.

Credit management is the business fitness programme.  With the right attitude to risk, a strategy of constant review and reaction when warning signs appear, youthful vigour can be maintained along with the ability to withstand even serious financial ailments.

Anyone wondering how some companies seem to be riding out the current economic crisis with little sign of ill effect should examine their credit policy, and the attitude to cash-flow management.

It’s not rocket science, to coin a phrase; it’s a question of establishing a clear strategy, supporting it with a documented policy and procedures, equipping personnel with the required skills and sticking with it.

In life, we are tempted to over indulge, or miss a few exercise sessions, but as long as our basic day-to-day routine is sound, we are able to withstand ailments and bounce back quickly.

Why not apply the same approach in business?

Posted August 16, 2011 by Julie in General information

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