There were 4,107 business bankruptcies in 2015 at a value of over $6 billion in Canada alone, and that number continues to rise. 50% of those companies are insolvent.
Unfortunately, as a business person, your clients don’t enter your place of business with a hat on that says ‘BANKRUPT' across the front. Of course that is a silly example, and our society operates by giving people continued opportunities. Yet, as a business person, you need to also hold your self and your business practices to a different standard lest your life’s work gets dragged down due to your client’s personal troubles.
So why worry about credit? First, providing credit can be fraught with financial peril. Credit causes a great deal of worry and stress upon business owners as they try to find the cash flow to keep moving forward while dealing with their outstanding receivables; this is on top of the time wasted trying to collect, and the expense of carrying receivables and the expense of lost time.
Secondly, today’s privacy laws make it difficult to obtain any information about potential client’s spending habits, or financial history. Therefore, for some small businesses, providing credit has become akin to an ongoing game of Russian roulette, never knowing if this next client is going to be the one to bring them down.
So if offering credit is a psychological hassle and financial expense, then why worry about it at all? The fact is our society has become so dependant on credit, that making credit available to clients is a necessity of running a business; credit is truly a cost of doing business. In many industries, if you don't provide credit, you may as well not be in business at all.
The secret is to know how to manage the credit side of your operation. That’s where DMG Commercial Credit Consulting comes in. With 30 years experience in the industry, DMG helps small to medium sized businesses minimize their risk, time, and expense by offering full credit management services. DMG will walk through your entire credit process and do everything from making recommendations, to writing proper credit policies, running credit history checks, and receivable management and collection.
For today’s businesses, offering credit is a necessary evil; DMG Commercial Credit Consulting can turn that evil into a friend.