Unfortunately, we can’t supply you on credit today due to instructions from the company credit controller, message from your supplier. Does this sound familiar? I am sure your immediate response will be why?
If the supplier is kind enough and wants to maintain the relationship, they may drop the bombshell and inform you as to why their company sees your business as a big credit risk. In simple terms, you are not covered by their credit insurers. Meanwhile, you have customers waiting to buy from you. Not a nice experience. This reaction from suppliers is usually not personal, although it may seem like that at the time. Your business can be ahead of the curve and get their act together by following the steps below.
1. Check your own credit scoring through credit checking agencies.
There is numerous software that checks and keeps the company updated with their credit scoring of the business. The software can also check on the credit scoring of clients before they sell to them. In order to boost and maintain your credit rating, the business has to pay your suppliers on time. Paying suppliers on time can be managed effectively if customers also pay on time. The scoring can help you see areas affecting your score and offer help on how to work on the areas you have fallen short. See the report through the eyes of your lenders and what they look out for. Check any information that isn’t right about your business and ask the credit agency to correct it. Be prepared with answers when you are asked any questions regarding the finances of your business. Set up notifications and alerts when significant changes affect your credit scoring. Act quickly to reduce any impact on your business before lenders get any wind of it. Get ongoing support to ensure that your business finances stay at its best. To have a no-obligation discussion about maintaining your credit score please get in touch.
2. Open a business account in your business name 
Some small businesses do not have business accounts, but rather continue using their own personal account. Good practice of a business recommends that a business separates personal transactions from that of the business. It makes it easier to analyze the business profit and distinguish business transactions from personal. It also protects your privacy when it comes to the public scrutinizing your business account. “Do not mix business with pleasure”. Business bank accounts are easy to set up, opening an account in the business name means any good references associated with how the accounts is run will boost the credit rating of the business. Banks offer to change free services for a limited period to entice businesses to save with them. Go get a business account immediately if you do not have one. Get in touch with us if you need help to set one up. Make sure the business account is in the business name. Overdraft on the account will be displayed on your credit scoring and not your personal bank account if you have a business account in the name of the business.
3. Taking credit improves your credit scoring
Endeavor to pay on the due date if you have any outstanding debts, to prevent incurring extra charges which are costs to the business and will reduce your profit. Take up a business credit card and use it purposely for business purchases. Set up a quick direct debit and pay off the balance when it is due. With our intelligent software, you can link your business credit card statement to the smart bookkeeping software. This way you will easily code transactions in your financial accounting system and not miss an entry. All your business costs are captured, the days of failing to account for some of your business costs is now a thing of the past.
4. File accounts on time
In the UK at the end of your financial year, you have 9 months grace period to file your accounts. So to the lender you have had plenty of time to file your accounts. Any delay signals a problem or you just couldn’t be bothered. The credit agencies cannot update the financial health of your business or the credit scoring if they can’t see an updated version at companies house. This is especially important when your financial health has improved. You will score better if you can get the accounts filed on time updating your lenders of any improvements. For businesses thinking about going for a huge bank loan, it will be worth employing the services of an auditor to certify the fairness of the accounts. This gives lenders the needed confidence that the reported finances can be trusted. The credit scoring of the business will also improve as a result.
5. Pay your bills on time
Delays in bill payment are becoming a problem in the UK. This has led to the involvement of the Government. From April 2017 large companies in the UK have a duty to report publicly on their payment policies, practices, and performance. Soon credit agencies will have access to accurate data on this information and it will be part of their criteria for credit scoring. Delays in payments are seen as a sign of weak cash flow. Pay your credit card bills on time. Set up a direct debit to prevent delays and charges. Worries about fraudulent transactions through your bank can be mitigated by setting up a link from your credit card and bank accounts to our smartbooks. There is the likely chance that payments will be processed faster by the bank if fraud is detected early.
6. Keep all your bank and credit card accounts in check 
All bank accounts including credit cards should be kept in check. This way you have full control of the transactions of all your transactions. Cancel any idle bank and credit card accounts. Simply get rid of it. There is no benefit associated with having many banks or credit card account. It is usually difficult to keep it all under check. There always new and tempting promotions advertised by the banks to get market share. Keeping numerous bank accounts may weaken your credit scoring. It sends the message that you need more money to finance your debt or get into future debt. Review the benefits you get from your existing banks and move to favorable banks if they offer what you want. The disruption of Fintech banks has made traditional banks more competitive these days which is good for the customer.
7. Limit your credit applications
Any rejection from a credit application looks bad on your scoring. Numerous applications make you look desperate for money. Resist from applying for credit immediately you are rejected. Most lenders use the same credit agencies. In the unlikely situation that you are not successful in your credit application, find out why you were rejected. Check your credit scoring and drill into reports published about the financial health of your business. Look out for any reported errors and Identify them immediately. Any errors on the company can be corrected by contacting the credit agency. Do this before you proceed to apply for another credit. Lenders look at the credit scoring of different agencies, it will beneficial to find out which agency’s credit scoring your lender is looking at. Try to see your own scoring through the lens of the lenders.
8. Ensure that customers pay on time
The health of the business is reliant on the cash flow of the business. If your customers don’t pay you on time you may be forced to apply for a loan to meet your daily operational costs. I have seen clients who are prepared to leave their £100k overdue receivable balance and go for loans to pay suppliers. It is highly important to be in control of your credit. Having a good credit controller or bookkeeper who will take ownership of customer payments is important. You want your customers to pay on time so that you can pay your suppliers. Collecting outstanding debt quickly prevents debts going bad. You don’t want the debts to become a cost to the business instead of cash inflow. Online business has been successful because of the no credit facility they offer and so has retailers. Operating a business that offers credit is not an easy task, ensure you have an organized bookkeeping system which will easily record sales anywhere, generate credit notes, allocate payments and keep customers updated on the state of their account in real time. You will gain a lot of trust from your customers if you consistently update them on the state of affairs.
9. Check other credit agencies
The UK uses 3 main agencies.
i. Experian
ii. Equifax
iii. Call credit
Your lender may be using one of these to check your credit scores. Unfortunately, the scoring of the agencies can differ from agency to agency. Directors can also check their credit scoring from the agencies and register to keep themselves updated with their credit scoring. The good news is there is software that consolidates all the data from the different agencies into concise reports that depict the health of the business.
10. Check terms of contracts and loans
The emergence of loan sharks in the business world is been prolific in recent times. The loan sharks are capitalizing on the gaps created by the traditional banks who are still tight on lending money to small business. Spend time to read the interest payments on these loans and make sure you are comfortable with the payments. I have recently seen loans with 30% plus annual interest payments. I have also seen some smart offers where the company pays you an upfront amount and take payments from your monthly credit card receipts. It is still worth working out the interest payment. Taking loans is not just about receiving lump sums, companies need to evaluate how much they will pay back from the loans received. Will you make enough money from your investment with the loan? Can you get a competitive rate from another provider?
Conclusion
The points mentioned shows there are steps in place to ensure that the business credit scores are kept in good standing. A good business credit rate keeps your suppliers happy and gives them the confidence to do business with you. Good credit scoring can get you ahead of your competitors. Not all bad credit scores are the fault of the business. All credit scores need to be investigated upon and the necessary measures need to be taken to rectify it as soon as possible. Ensure that you have the right systems in place for good credit scoring by getting in touch with us for a no-obligation meeting.
By Joseph Nsiah
Parizma Systems
Efficient tools for Business
PS. This also applies to individual credit scoring.
4 Ways profit breakdown can benefit your business
/0 Comments/in Uncategorized /by adminProfit breakdown by the customer – Sales by customer less cost of sales by the customer gives you the gross margin of the customer excluding any overheads. The breakdown helps the business to review and evaluate which business customer is profitable. Research shows that in most businesses 20% of the customers make up 80% the profit of the business. Financial data alone is not the basis for which decisions should be made to evaluate the profitability of the customer. Knowing your customers and their industry together with the buying trend can help you make an informed decision on the growth of their business. Some customers are also pain-free and do not cost much to manage their account. Although they don’t buy much they pay on time and have a few queries. To keep up to date data on customers my suggestion is to keep notes on customers on your customer accounts on your applications. This keeps a diary of communication queries that have come up on your customer within the trading period.
Product profitability breakdown. Important to know how much profit is made on the various products. This helps when the company decide to do away with certain products and also help review their product offering over a period of time. Again the statistics alone is not enough to make an informed decision. The availability of the product, the environmental and social impact which is a big news subject these days, all help in making decisions.
Supplier profitability breakdown – It is handy to know what are the profit numbers you are making per supplier. Your application will have to track sales made from suppliers products and the cost of sales of the products plus shipping from the suppliers. This gives you the profit of supplier A, B, etc. The question is, is it profitable to keep receiving supplies from supplier A or is it worth finding another supplier and stop making losses or despite the loss from supplier A you are making enough the profit from supplier B which also covers the loss of supplier A, besides supplier A’s product is complementary product for supplier B. Important strategic decisions for your business giving you an advantage over your competition.
Department or sub-business profitability. It is worth knowing how the different parts of the business are performing. Transfer pricing may come into play here but once you use a fair system you have nothing to worry about. Different part of the business profitability helps makes a decision on which part is doing well which is not. The successful part of the business can be emulated on other parts of the business for the same success. It also helps make decisions about which parts to get rid off.
Track recruitment process
/0 Comments/in Uncategorized /by adminData is driving a lot of businesses forward these days. It is ideal to have a trace of how you employed Kay who is the exemplary staff that you so much would love to recruit about 10 of her. Make the entire recruitment process seamless. Involve the entire team in the recruitment process. many colleagues complain they were not part of the recruitment process which affects the relationship between new recruits and existing employees. Make informed and data-driven decisions.
Create your own job web opening website that reflects your brand and collects resumes. There is the option to create a web page to list jobs and collect resumes or create an application form to collect resumes only. You can also include the URL on the 3rd party job boards (Indeed, monster etc) and direct candidates to your portal. Post jobs on social sites by sourcing via your company’s social page.
Create your own recruitment business from scratch with the best software to help you run your business seamlessly.
Please get in touch and if you are in the recruitment industry or looking to enter into the recruitment space. HR personnel get in touch and make the recruitment process easy.
Integrate reports from different platforms
/0 Comments/in Uncategorized /by adminThere is currently hundreds of software being sold. Contemporary developers are trying to develop applications in a particular niche so that they could establish a market share. Notwithstanding there some very good applications out there which are close the all rounded product but are not quite the full product yet. In order to meet certain pressing needs, businesses use a combination of applications to satisfy their needs.
At PS we do a due diligence and find out what will work for the client before we advise them on the best software to use. There also uses of some theses software that is very good for corporations despite their huge investment in-house applications. In-house applications require substantial investment and become complex over time. The amount of accumulated data over time makes it difficult to migrate. Their complexity needs another huge investment to move to a contemporary or cloud-based application. However, this doesn’t mean that some of the needs of the business cannot be met by modern applications. I once used an outdated bank reconciliation application that required careful download and uploads and manually monitored the final balance on the bank reconciliation statement. By the time the process is over, you are physically drained. This is not the way applications should work. At PS we believe in the software doing you the mundane work whilst the individual spends time running and strategising the business.
We provide applications that bring the reports from different application together to one location. This makes it easier to find the various important data in one place. The report can locate inventory, contacts, sales and profits and show trends helping management in their decision making.
Use these 10 amazing methods to quickly improve your credit score
/0 Comments/in Cashflow /by Joseph NsiahUnfortunately, we can’t supply you on credit today due to instructions from the company credit controller, message from your supplier. Does this sound familiar? I am sure your immediate response will be why?
If the supplier is kind enough and wants to maintain the relationship, they may drop the bombshell and inform you as to why their company sees your business as a big credit risk. In simple terms, you are not covered by their credit insurers. Meanwhile, you have customers waiting to buy from you. Not a nice experience. This reaction from suppliers is usually not personal, although it may seem like that at the time. Your business can be ahead of the curve and get their act together by following the steps below.
1. Check your own credit scoring through credit checking agencies.
There is numerous software that checks and keeps the company updated with their credit scoring of the business. The software can also check on the credit scoring of clients before they sell to them. In order to boost and maintain your credit rating, the business has to pay your suppliers on time. Paying suppliers on time can be managed effectively if customers also pay on time. The scoring can help you see areas affecting your score and offer help on how to work on the areas you have fallen short. See the report through the eyes of your lenders and what they look out for. Check any information that isn’t right about your business and ask the credit agency to correct it. Be prepared with answers when you are asked any questions regarding the finances of your business. Set up notifications and alerts when significant changes affect your credit scoring. Act quickly to reduce any impact on your business before lenders get any wind of it. Get ongoing support to ensure that your business finances stay at its best. To have a no-obligation discussion about maintaining your credit score please get in touch.
2. Open a business account in your business name
Some small businesses do not have business accounts, but rather continue using their own personal account. Good practice of a business recommends that a business separates personal transactions from that of the business. It makes it easier to analyze the business profit and distinguish business transactions from personal. It also protects your privacy when it comes to the public scrutinizing your business account. “Do not mix business with pleasure”. Business bank accounts are easy to set up, opening an account in the business name means any good references associated with how the accounts is run will boost the credit rating of the business. Banks offer to change free services for a limited period to entice businesses to save with them. Go get a business account immediately if you do not have one. Get in touch with us if you need help to set one up. Make sure the business account is in the business name. Overdraft on the account will be displayed on your credit scoring and not your personal bank account if you have a business account in the name of the business.
3. Taking credit improves your credit scoring
Endeavor to pay on the due date if you have any outstanding debts, to prevent incurring extra charges which are costs to the business and will reduce your profit. Take up a business credit card and use it purposely for business purchases. Set up a quick direct debit and pay off the balance when it is due. With our intelligent software, you can link your business credit card statement to the smart bookkeeping software. This way you will easily code transactions in your financial accounting system and not miss an entry. All your business costs are captured, the days of failing to account for some of your business costs is now a thing of the past.
4. File accounts on time
In the UK at the end of your financial year, you have 9 months grace period to file your accounts. So to the lender you have had plenty of time to file your accounts. Any delay signals a problem or you just couldn’t be bothered. The credit agencies cannot update the financial health of your business or the credit scoring if they can’t see an updated version at companies house. This is especially important when your financial health has improved. You will score better if you can get the accounts filed on time updating your lenders of any improvements. For businesses thinking about going for a huge bank loan, it will be worth employing the services of an auditor to certify the fairness of the accounts. This gives lenders the needed confidence that the reported finances can be trusted. The credit scoring of the business will also improve as a result.
5. Pay your bills on time
Delays in bill payment are becoming a problem in the UK. This has led to the involvement of the Government. From April 2017 large companies in the UK have a duty to report publicly on their payment policies, practices, and performance. Soon credit agencies will have access to accurate data on this information and it will be part of their criteria for credit scoring. Delays in payments are seen as a sign of weak cash flow. Pay your credit card bills on time. Set up a direct debit to prevent delays and charges. Worries about fraudulent transactions through your bank can be mitigated by setting up a link from your credit card and bank accounts to our smartbooks. There is the likely chance that payments will be processed faster by the bank if fraud is detected early.
6. Keep all your bank and credit card accounts in check
All bank accounts including credit cards should be kept in check. This way you have full control of the transactions of all your transactions. Cancel any idle bank and credit card accounts. Simply get rid of it. There is no benefit associated with having many banks or credit card account. It is usually difficult to keep it all under check. There always new and tempting promotions advertised by the banks to get market share. Keeping numerous bank accounts may weaken your credit scoring. It sends the message that you need more money to finance your debt or get into future debt. Review the benefits you get from your existing banks and move to favorable banks if they offer what you want. The disruption of Fintech banks has made traditional banks more competitive these days which is good for the customer.
7. Limit your credit applications
Any rejection from a credit application looks bad on your scoring. Numerous applications make you look desperate for money. Resist from applying for credit immediately you are rejected. Most lenders use the same credit agencies. In the unlikely situation that you are not successful in your credit application, find out why you were rejected. Check your credit scoring and drill into reports published about the financial health of your business. Look out for any reported errors and Identify them immediately. Any errors on the company can be corrected by contacting the credit agency. Do this before you proceed to apply for another credit. Lenders look at the credit scoring of different agencies, it will beneficial to find out which agency’s credit scoring your lender is looking at. Try to see your own scoring through the lens of the lenders.
8. Ensure that customers pay on time
The health of the business is reliant on the cash flow of the business. If your customers don’t pay you on time you may be forced to apply for a loan to meet your daily operational costs. I have seen clients who are prepared to leave their £100k overdue receivable balance and go for loans to pay suppliers. It is highly important to be in control of your credit. Having a good credit controller or bookkeeper who will take ownership of customer payments is important. You want your customers to pay on time so that you can pay your suppliers. Collecting outstanding debt quickly prevents debts going bad. You don’t want the debts to become a cost to the business instead of cash inflow. Online business has been successful because of the no credit facility they offer and so has retailers. Operating a business that offers credit is not an easy task, ensure you have an organized bookkeeping system which will easily record sales anywhere, generate credit notes, allocate payments and keep customers updated on the state of their account in real time. You will gain a lot of trust from your customers if you consistently update them on the state of affairs.
9. Check other credit agencies
The UK uses 3 main agencies.
i. Experian
ii. Equifax
iii. Call credit
Your lender may be using one of these to check your credit scores. Unfortunately, the scoring of the agencies can differ from agency to agency. Directors can also check their credit scoring from the agencies and register to keep themselves updated with their credit scoring. The good news is there is software that consolidates all the data from the different agencies into concise reports that depict the health of the business.
10. Check terms of contracts and loans
The emergence of loan sharks in the business world is been prolific in recent times. The loan sharks are capitalizing on the gaps created by the traditional banks who are still tight on lending money to small business. Spend time to read the interest payments on these loans and make sure you are comfortable with the payments. I have recently seen loans with 30% plus annual interest payments. I have also seen some smart offers where the company pays you an upfront amount and take payments from your monthly credit card receipts. It is still worth working out the interest payment. Taking loans is not just about receiving lump sums, companies need to evaluate how much they will pay back from the loans received. Will you make enough money from your investment with the loan? Can you get a competitive rate from another provider?
Conclusion
The points mentioned shows there are steps in place to ensure that the business credit scores are kept in good standing. A good business credit rate keeps your suppliers happy and gives them the confidence to do business with you. Good credit scoring can get you ahead of your competitors. Not all bad credit scores are the fault of the business. All credit scores need to be investigated upon and the necessary measures need to be taken to rectify it as soon as possible. Ensure that you have the right systems in place for good credit scoring by getting in touch with us for a no-obligation meeting.
By Joseph Nsiah
Parizma Systems
Efficient tools for Business
PS. This also applies to individual credit scoring.
10 Ways to easily track employee business expenses in 2018
/0 Comments/in Cashflow /by Joseph Nsiah