The need for credit training to increase profitability

Credit management is one of the least understood of all business functions. At senior management level the thinking is often that credit is solely around the collection process and getting paid within a reasonable time. The fact that success is still being measured by DSO and percentage overdue is proof of this mind-set. For the function to progress a number of things must happen:

  • We have to see the function from start to finish as an all-encompassing role that begins with assessing the market to find suitable customers we are prepared to do business with. I see it as pre marketing and definitely pre sales. To avoid wasting time talking to potential customers that we are not prepared to do business with on a credit basis after the order arrives is the wrong way to go about doing business in the first place.

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Saving and budgeting

We have all heard all sorts of advice about saving and budgeting. Experts tell us what we should be doing and how we should be doing it the best way. Family members tell us what we should be doing and how we should be doing it. Friends who seem to be doing better financially than we are will tell us how they have do in and what has worked for them. We should save more. We should save less. We should save three months of income for emergencies. We should have at least a years’ worth of savings. We don’t need savings as long as we have income, investments and credit. We should never rely on income investments or credit to live on. It all gets confusing and overwhelming. As for budgeting, that just plain seems scary and hard to stick to. Let’s look at 5 ways to think about saving and budgeting that will make them seem clearer and less confusing.

1. It’s never too late to start saving – In a perfect world we would have all started to save at age 20 and would have added regularly to it every month from then on. Obviously we don’t live in a perfect world. There are all sorts of circumstances and situations which get in the way of saving. There is nothing wrong with that. There is also nothing wrong with starting to save whenever you can. Starting at age 40 might not be as good as starting at age 20, but it is a whole lot better than starting at 50. The best time to begin is right now.


2. There is no such thing as too little – Some people don’t want to start saving because by the time they have paid all of their other bills they are only left with a little bit of money, so it doesn’t seem worth it. This is silly. Even a little bit makes a big difference. You have to consider that something is better than nothing, that you are benefiting from the interest which is letting your money grow and you are getting in the habit of saving, so you will be able to save more when you start making money. Start saving now, no matter how much you can save!

3. Don’t save too much – This sounds like contrary advice, but it really isn’t. Saving is important, but so is living today. If you are saving so much now that you can’t do or enjoy anything, then you begin to dislike savings. You will resent it and you will quit doing it. You are much better off saving a reasonable and sustainable amount now and continuing at that level for years to come.

4. Don’t think of it as a budget – Budget sounds like a negative word. It is all about constraints. Try calling it a spending plan instead. That sounds so much more positive and will make it easier to stick with it over the long run.

Saving Money in Today’s Rough Economy

Saving money nowadays is more important than never and many households are trying to cut back where possible. Saving money is more than controlling what you spend. It goes into making sure your money is spent wisely and put where it’s needed the most. It’s important to save money for a number of reasons and here are some effective tips that can help you.

Evaluate Necessities and Luxuries

We all want to have nice things, but when you think about what you spend your money on, chances are some items are not always a necessity. Did you really need to spend money on those heels? Chances are you could have lived without them, and even if it was a special occasion if you had to cringe while items were being rung up they were not needed. Consider what you can live without as opposed to making sure bills are paid beforehand.

Plan a Budget

Make a list of all income that comes into the house. Add up your expenses that need to be paid out each month. Stick to keeping bills paid and at the end of the month if there is money left over, it might not be too bad to spend a little within reason. This all sounds simple but in reality people have a hard time sticking to a budget.

Eliminate Credit Cards

Many people that have credit cards find themselves in debt. They think they can put purchases on credit cards but that just adds to your monthly bills that need to be paid every month. Eliminating credit cards eliminates any temptation to spend money.

Cut Back on Driving

If you need to run an errand, try and plan a day when you can run all of your errands rather than one running one errand at a time. This saves money on gas since gas prices seem to be steadily rising.

Plan Accordingly on Groceries

Using coupons may seem like something time consuming. While some coupons are only for a mere few cents, every little bit saved can help. If you plan your grocery list based on coupons you can save more money. Check local ads and see where items are being offered at the best price and consider shopping at one place rather than 2 or 3. Coupons can be printed out from the internet nowadays which can help save more.

Also, buy only non-food items in bulk. Many people think they save money by buying meat, soda, juice, and more in bulk but in fact you go through it faster. This means you’re making added trips to the store and spending more money.

Shop Clearance Sections

If you need clothing for yourself or for your children, clearance sections are a lifesaver. Try not to go overboard and you can shop in the off season to save even more. For example, shopping for winter clothes in the summer can help you save more money.

These tips can help you save money and spend less in today’s economy. There are several other ways that many households are figuring out that have helped put more money in the bank.

The Ultimate Guide to Guarantor Loans


The recent recession has affected almost everyone in one way or another. Some have been forced to take on extra hours at work while others have found themselves without a job at all. The recession has also prompted the banks to make a number of changes, one of the most significant surrounds their loans and more specifically; the lending criteria of their loans.

Prior to the recession, getting a loan via the bank wasn’t particularly tough, however once the recession hit – this all changed. The decrease in disposable income meant that many were unable to pay their loan; leaving banks struggling. This forced the banks to make significant changes to their lending criteria in a hope to reduce the amount of customers that fall into arrears on their loans.

What this means is that someone who would have previously been approved for a loan via their bank, are now being declined, forcing them to look elsewhere. This is where guarantor loans come in.

The basics of guarantor loans

Guarantor loans are a type of unsecured loan meaning they do not require the security of a home or any other physical asset. Instead, guarantor loan lenders will require the applicant to provide a friend or family member to support the application. It guarantor signs an agreement to say that they will make payment on behalf of the applicant if the applicant is ever unable to do so.

The guarantor must be a homeowner who has a good credit history and is receiving an income that is deemed sufficient to afford the repayments of the loan. The age criteria differs from lender to lender however generally the guarantor must be between the age 25 and 75. The majority of guarantor loan lenders will offer between £1000 and £5000 that is repayable over a term of 1 to 5 years.

The interest rates

Guarantor loans were first introduced to the UK unsecured loan market in a hope to bridge the gap between the low rate banks and mainstream lenders and the high interest doorstep lenders. The APR of guarantor loans is generally seen as quite high. Fundamentally, the rates reflect the risk of lending to those who may have missed payments and even defaulted on credit commitments in the past.

Some lenders will offer fixed interest rates, which means that your repayments will stay the same throughout the full loan term (providing you keep up with the repayments). Other lenders will offer variable rates, which means they are subject to change in accordance with the Bank of England Base Rate, however these changes are usually quite insignificant. Fixed interest rates are much easier to budget for as you always know exactly how much you’ll be paying each month.

Repaying the loan

Most lenders will set up a direct debit on completion of the loan application. This will mean your repayment amount will be automatically deducted from your bank account on a day of your choice. It is always a good idea to ensure your direct debit is set up on the day of, or very close to your payday – this means there should always be funds available.

If you’d like to settle the loan early then you are free to do so. Please note there may be an early settlement fee which is likely to be around 1 months worth of interest.

Where can I get a guarantor loan?

All guarantor loan lenders will have their own website on which you’ll be able to make an application. Having filled out the application form and sent in the relevant supporting documentation, the lender will carry out a variety of searches on both yourself and your guarantor. Lenders will look to communicate in various ways; over the phone, via email or even via text.

Some lenders may be willing to send an application in the post, however as it stands none offer an in-branch, face to face service such as the one offered by banks.

Getting into difficulty

If as the applicant you are struggling to make ends meet and don’t think you’ll have the funds available then the first thing you should do is get in contact with the lender to alert them of the situation. It is also a good idea to get in contact with your guarantor too, to make them aware they may be required to make a payment.

It is worth saying that you and your guarantor should be regularly in contact with each other regardless of the situation to ensure that your friendship is never in jeopardy.


With more and more people struggling to gain credit through mainstream sources such as their bank, building society or supermarket – the need for a product like guarantor loans will only continue to increase.

Save Money – Choose an Online Only Bank!

Here’s something you probably already know: we’re a mobile society that’s always on the go. There’s just no getting around that. Yet there does come a point where you have to look at how well things fit into your new mobile life. If you’re on the go, shouldn’t your banking be too?

That’s the subject of debate in a lot of banking circles. Getting account info on your phone is cool, but there are security issues that every banking institution has to think about. It can’t just be a matter of customer convenience. Your sensitive financial information has to be protected at all costs. Hackers could get your information and have a field day. Not what you really want to look forward to at all.

The conversation naturally tilts towards online banking. After all, it isn’t like we don’t know how to protect customer information online. We’ve gotten good at encrypting things. Online banking is full of regulations involving security, so you wouldn’t have to worry too terribly much about your information.

Online banking has been around for a while now, so it’s not like you’re missing out on too much. You can get an online bank account without any stress, giving you a new world to explore. If you bank from a physical location, you probably have online access to your account as well. If you’re someone that travels a lot though, it might be wise to think about an online only bank. The overhead is less which means that you can get better rates than a traditional bank where the overhead is so high.

The nice part about online banking is that it’s available anywhere you have an online connection. So if you happen to move away from that particular location where the physical bank is located, you’re not going to want to drive all the way back just to use their services.

In a troubled economy, cutting costs is a good thing. Services that we like in the online banking sector include ING Bank and Ally Bank. There are plenty of other ones out there, so make sure that you truly explore all of your options.

Separate Your Business From Your Personal Life Now!

Running a business is the dream that many people have, and it’s definitely a good dream. So when you finally get a chance to make it a reality, you’ll probably want to take steps to protect it as much as you can. After all, why would you want to make any type of mistake that’s going to keep you from enjoying the type of life that you’ve always wanted? Thankfully you do have a lot more options than you might realize to protect your business.

It all starts with making sure that your business life is separate from your personal life. Again, this might seem obvious, but we’re always surprised to see people that aren’t incorporated. Incorporation is something that’s pretty straight forward, and it tends to make your life a lot easier than if you were just trying to group everything together. If you aren’t incorporated and you don’t have all of your business life separated out from your personal life, you’re going to end up risking a lot more liability than you should.

This is because when your business life and your personal life have no separation, you’re basically opening up your personal items to seizure if you lose your case! That’s something that no one wants to go through.

The more separation you can build in, the more obvious to the IRS that you’re running a business. This means that the IRS is a lot less likely to throw out all of those expenses that you’ve claimed, or other things that are designed to lower your bill. If they feel that all you’re doing is a hobby, then you’re not going to be able to do much of anything when it’s time for tax season — you’ll lose every time.

Save yourself the trouble — separate things out. Here’s what we suggest:

Incorporation would be the first thing that we suggest. It makes getting bank accounts and even business credit so much easier. If you lump everything together, then you’re going to have the problems that we already listed. However, if you incorporate properly, you’re going to be able to shield your personal assets in case you have to declare bankruptcy with your business or even if you have to deal with litigation.

Make sure that anyone can go back and see what your personal money is and what the corporate money is. If you are incorporating, that means that you will want to have an obvious salary being paid out to you. Once you grow, you can invest in payroll software that computerizes the whole process. This way if you’re audited you have to only go through a few screens and print out exactly what money went where.

Staying organized is just one more facet of running a business — are you ready for you? Start separating your business life from your personal life for the best results around!