ukwa 2 cover - United Kingdom Warehousing Association

32 Money Matters
In the current recession, the need to investigate the credit worthiness of both existing and new clients
has become an increasingly crucial function, says Julia Lucas, Financial Controller of Hellmann
Worldwide Logistics and Chair of the UKWA’s Finance Committee
Giving credit
An efficient credit control department is
absolutely essential for any company
hoping to escape the jaws of the current
recession. But credit control isn’t just
about making sure your invoices get paid
on time. For 3PLs, the need to investigate
the fiscal worthiness of both existing and
new clients has become an increasingly
crucial function.
“It is important to run financial checks
on a new client before you start to do business
with them, but it is equally advisable to
run regular checks and keep up to date
with the state of the balance sheet of long
term customers,” says Julia Lucas, Financial
Controller of Hellmann Worldwide Logistics
and Chair of the UKWA’s Finance
Committee.
To ensure that exposure to risk is limited,
it is advisable to build up a picture of your
client – or potential client’s – financial position.
Credit checks, such as those offered
by Experian, are a simple and cost efficient
way of doing this. The checks can also be
supported by research at Companies House
to ensure that the client is up to date with
the necessary paperwork.
But what if your investigations throw up
doubts about the customer’s status “If your
research indicates that the client’s financial
position is marginal, you should take a
closer look at the company’s full accounts,”
says Julia Lucas. “The accounts should give
you a better understanding of the firm’s
position but, if the figures don’t give you
any comfort, try talking to the financial
director or managing director,” she adds.
Julia Lucas continues: “Personal interaction
is important. If key personnel are
February 2010
Of course, in the current climate particularly, it is
hard to turn business away and any decision to
forego a new account or restrict credit to an
existing one for financial reasons often leads
to confrontation between credit control and
the sales department
www.ukwa.org.uk
happy to talk and are open about their
financial position and seem on top of the
company’s strategy, you get a more positive
picture of them. As with so many other
aspects of business life, the personal relationship
you have with your clients can be
very useful in helping to manage the effects
if they encounter difficulties in paying their
bills to you. Keeping the lines of communication
open can make it possible to set up
alternative payment patterns to support
your client’s cash flow while ensuring you
collect your debts within a reasonable
time.”
Of course, in the current climate particularly,
it is hard to turn business away and any
decision to forego a new account or restrict
credit to an existing one for financial reasons
often leads to confrontation between credit
control and the sales department.
“Sales people are always keen to do the
deal but it is important that they realise that
if the new client doesn’t pay, then the company
doesn’t make any money. It is as simple
as that. At Hellmann we are starting to
encourage the sales staff to spend a day
with credit control to give them a greater
understanding of what we do – and why we
do it – and to build a really positive working
atmosphere between the departments.”
Contact Julia Lucas at jlucas@gb.
hellmann.net
For full details of the extensive range of
services offered by Hellmann Worldwide
Logistics visit wwwhellmann.net