At Red Rabbit Credit

We Customise a DEBTOR Solution to Suit Your Needs


Cash Flow

A strong cash flow is the life blood of all businesses.

Poor debtor control leading to poor cash flow is a key contributor to small business failures.
Alternatively, excellence in managing debtors provides the cheapest and best source of increasing cash to grow your business.

Bad Debts

Please don’t accept bad debts as a constant business expense. Trying to judge when customers are in payment trouble is a major part of maintaining cash flow. Watch for warning signs – for example, if a customer suddenly starts paying 45 – 60 days late, then this is a red flag moment. You need to investigate why ASAP.

Sales & Credit Teams

The power of Sales and Credit working in tandem to grow and protect what is typically the company’s single largest asset – debtors, cannot be under estimated. The alternative of working independently in ‘silos’ risks poor credit assessment decisions leading to increased risk of slow payments or default.

Credit Trading Terms

Management of trading terms is a Sales function, not a Credit function, driven by gross margin profit earnt from Sales’ negotiations with individual customers around price, volumes, product quality et cetera. High margins allow flexibility of extending terms, low margins require tight terms to ensure the sale remains profitable.

Reduce Credit Risk, Increase Profits, Increase Cash to Grow

Providing credit trading terms

Is giving your customers interest free, unsecured loans.

Time is Money

Collecting money from debtors more quickly provides cash at a faster rate to grow a business or retire debt.

Trading Terms

Agreed with your customers – why then do so many companies allow their customers to significantly s-t-r-e-t-c-h contractually agreed terms?

Lack of Cash

There is nothing more important than getting paid for your product or service given many businesses fail through lack of cash despite making profits.

Late Payments

Erode profits, and if you don’t manage debtors they will begin to manage you, gradually taking away your flexibility to manage your business.

Days Sales Outstanding

A correct financial measure of your business’ investment in credit sales, but NOT the correct measure of your Credit team’s performance if trading terms are varied.

Quick Facts

Did You Know…

In a recent survey, respondents identified the greatest challenges to small business profitability as follows:


34.0%

Maintaining adequate cash flow

18.1%

Outstanding invoice collection

15.2%

Bank lending restrictions
(Source: Atradius Payment Practices Barometer – November 2014)

At a 5% net margin – to replace a bad debt, you need to find 20 times the value in new sales.

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