commercial – Severn Valley Business Group
 

Tag: commercial

Getting Paid (My View)

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We’re all in business to help others, provide services or goods, be the best in our field and for many other reasons, but at the end of the day we still have to pay our bills, thus we need to make a profit and to help us do this, we need to get paid.

There is no one solution to getting paid that fits all kind of businesses, however some of the points below, may in part or in combination, create a scenario where we at least have a fighting chance.

Firstly let’s be clear on the mechanics of getting paid, there are four basic ways of receiving monetary remuneration (i.e. we’ll exclude all forms of bartering):

The Cheque: This requires either a leap of faith from the customer or the vendor, in as much as goods / services are handed over in exchange for a cheque that then needs to clear, or the goods / services are withheld until funds are cleared, then the customer has to have the faith that the vendor will fulfil his commitment.

Plastic (including the likes of PayPal): Here payment is instant and the customer has an array of guarantees on top of their statutory rights, however there may be charges associated with this transaction, which can either be passed on to the customer or absorbed by the vendor.

Bank Transfer: With this system the customer can arrange to transfer money directly from their accounts into yours, this is clean and quick, usually doesn’t take long to clear those funds and doesn’t usually attract any charges.

Cash: We all know about cash and is usually used where goods are exchanged directly to the customer, assuming that you haven’t been paid with forged currency, then you know that you have been paid, the only downside is the vendor now needs to make a trip to the bank or buy a bigger mattress.

For most businesses one of the above will be more suitable than the others, or a combination of them (i.e. cash and credit card is common amongst retailers) but this is where the solution of the mechanics of getting paid is down to the business you are running.

Secondly there are three ways of being paid, which again depending on the business you run, will have a preference as to how you make this happen:

Payment in advance: This is where the customers pay for the goods or services prior to getting them, we touched on the cheque earlier, this would be cleared prior to the goods being dispatched, but could also cover services in as much as a retainer could be charged for future events (servicing, professional services etc.)

Payment at point of sale: No matter what the mechanics of payment are, there is an exchange of funds for goods or services at that specific event (mainly used by retail outlets, but can equally be applied to services if required)

Credit: This is where the goods or services are supplied in advance, then payment should follow according to the conditions that have been laid down for payment (this is mainly used where a credit facility is offered to the customer, in order to allow for deferral of the payment and is mainly used in the service industry)

No matter what method of payment you adopt, payment in advance or at point of sale will not give any problems with getting paid, however the main issue is with credit, in that the vendor will always have to trust that the customer will fulfil his part of the agreement and make payment when due.

It’s apparent that the main problem to getting paid is where we allow credit facilities, accordingly this is where we need to put certain processes in place in order to limit our exposure to this problem and prevent the reasons for non-payment.

Let’s be absolutely clear as to what the transaction is and what are the goods or services on offer?

We must make it clear as to what is being offered, a vague reference to “widgets” is not good enough; how big are they, what colour, which model, what is the end product. In other words there can be no argument as to what ends up being supplied, make sure that this is written down and that both parties have access to this.

How much will the goods or service on offer actually be? Saying it’ll cost about £XXX will not do, give a price for the complete service, or break it down into its components or give a price per item (whether this be product or time) whichever way you split the costs, make them clear, including the currency in which you want to be paid.

Make clear as to whether or not there may be discounts available, for additional services or for supplying larger quantities, but be specific as to how these discounts will be applied.

Are there any optional extras to be had? This is the point that can be used to upsell, if the products or services can come with “bells and whistles” then say so and how much these variations will cost. By giving this information in advance it will avoid confusion later on, especially when it comes to the value of the final value.

What are the terms of payment for this arrangement, 7 days, 14 days, 28 days or nett monthly, whichever you chose to give your customer make it clear, never say from receipt of invoice as you do not have control on when this is recognised (unless you use registered post etc.) but better from date of invoice. Avoid nett monthly as this could lead to 60 days of credit, which is not good for cash flow.

Make it clear as to how you want to get paid, Cash. Cheque, Plastic or Bank transfer, for example a bank transfer is instant, a cheque will delay payment for a few more days depending on when it is issued and the working arrangements of your bank

The above constitutes an offer or quotation, this does not mean that you proceed, but you should await an instruction of some form that refers directly to this, at this point confirm the instruction giving any additional information, such as confirming attendance dates, delivery dates or specifications.

Once the goods or services have been supplied, then issue your invoice, which must reflect exactly what was in the accepted quotation or any agreed variations to this, make sure it is dated (tax point), when payment is due (payment terms), detailed value of the transaction, how payment should be paid, any references that the customer has asked for (order number) in other words don’t allow any confusion or space for questions.

The problem arises when the above is still not adhered to and payment is not received on time, in which case you should follow these steps:

Chase your payment at a fixed time after the due date (this may depend upon you relationship with the customer) make sure that this is polite, as they may be having problems and an offer of help will be received better than a threat.

If payment is still not received, then chase again at a set time after the first chase, include a copy of the first one, still be polite but request that payment be made without any further delay

At a set point after the second chase, a third chase will be required, again include a copy of the previous two, but insist that as the previous ones have not been actioned, that immediate settlement of the account be made.

If these chases do not have the desired effect, then it’s time to bring in the solicitors, start by getting them to issue a “7 day letter”, receiving a letter from a solicitor usually has the effect of getting a result and is not costly.

If this fails then you will have the right to seek judgement against the debtor, the costs of which will be added to the debt as well as interest on the debt, failure to meet any judgement will allow you to take one of the following actions:

Seek a warrant of execution: whereby you can get bailiffs or the sheriff to seize goods to cover the debt

Get an attachment of earnings: where you can get a sum of money taken from the debtors pay at regular intervals until the debt is cleared

Take out a third party debt order: this will allow the debtors accounts to be frozen until the debt is cleared

Take out a charging order: whereby you are allowed to register a legal charge against any properties owned by the debtor

All of this assumes that the debtor is able to pay, should you believe that this may not be the case, then a judgement call needs to be made as to whether to pursue any action or cut your losses. In addition to the above you could apply for a statutory demand (this really should only be pursued when you know the debtor has sufficient funds, but is deliberately withholding them) whereby after 21 days you could start winding up proceedings, but don’t forget our friends at HMRC and the banks will get first dip into any pot.

The main point of the above is you must have a procedure in place to deal with debtors and stick to it, there is no room for sentiment when you have a mortgage to pay, but the most important thing is make sure that everything is in “black and white”.

 

 

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Risk and your business

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Here we will be looking at the physical risks that need to be accounted for within any business planning, but hopefully will cover the general areas necessary to give you an idea of what to look out for.

Before we move on let’s be clear what we are talking about.

   What is Risk?                                           

“Risk is the likelihood of a body or event to cause harm.”

This should not be  confused with Hazard.         

 What is Hazard?            

“Hazard is the ability of a body or event to cause harm.”

From this we can see that in order to reduce the risks to our businesses we need to remove, reduce or protect against the hazards we come across. The way we do this is by carrying out a Risk Assessment

 There are five steps to carrying out any risk assessment.

 Step 1: Identify and record the hazards that are present, these fall broadly into five categories

Physical: such as pressure, heat, damp, noise, radiation and electricity

Chemical: such as dusts, fumes, chemicals, toxic materials and gases

Biological: such as infections, viruses and contagions

Ergonomic: work conditions, stress, RSI and man-machine interaction

The fifth one we’ll come back to as it’s covered under specific legislation

 Step 2: Identify the people that may be affected by the hazard

Paying particular attention to those groups that may be especially vulnerable such as the elderly, blind, young and disabled.

At this point it is possible to rank the severity of the risk, giving it a more tangible identity

 Step 3: Remove, reduce the severity or Protect against, the Hazard.

The preference here is always to remove the hazard completely (rearrange items to avoid trips and impacts), if this cannot be done then reduce the severity of the hazard (use low voltage equipment or less aggressive chemicals) and as a last resort protect against the hazard (provide warnings or personal protective equipment).

Once again assuming that all the measures have been put into place, it will be possible to rank the severity of the residual risks. You can then establish whether the remaining risks are acceptable or if they need further action.

 Step 4: Record, Plan, Inform and Train            

Record the significant findings from steps 1 to 3 and what actions have or need to be taken as a result.

Prepare any plans or procedures that may be required in order to facilitate the actions

Inform and instruct all relevant people, co-operate with all concerned.

Provide any necessary training that may be required as a result of the assessment.

 Step 5: Review

Having carried out the assessments they must be kept relevant, which means that they should be reviewed on a regular basis or when conditions change (such as work practices, new technology, legislation or results of monitoring)

Remember any revisions to the assessments must be communicated to those that need to know the results of those revisions.

 Why have we gone to the trouble of doing these risk assessments and putting whatever precautions in place, is it because of our genuine concern for our fellow workers safety, is it because it makes financial sense to do it or is it our legal duty?

 The answer is all of the above!

 From a humanitarian and moral point of view, we do not want to cause or allow to be caused, harm to anybody

  1. Research shows that investing in risk reduction leads to better company performance.
  2. A good working environment is good business.
  3. Staff feel that they are valued.
  4. Your customers see a company that does it right and cares.
  5. You avoid costs associated with disruption, sickness, investigation, down time, compensation claims, increased insurance premiums and loss of goodwill
  6. And for those companies that cannot see the benefit, there are legal requirements, with quite hefty penalties for non compliance

 Remember under step 1 of the risk assessment we said there was a fifth hazard, which was covered under its own legislation, this is Fire!

 Potentially this one can be the most destructive, obviously to your staff, the public and visitors, but also to a business and as such should be carried out by a competent person.

 If your stock and premises are all destroyed, how are you going to trade?

 This is why in March 2006 the “Regulatory Reform (Fire Safety) Order 2005” came into force, making it the responsibility of all owners or occupiers of commercial properties, to carry out a Fire Risk Assessment of those premises and put into action any necessary precautions and planning, specific to those risks.

 For the purpose of the legislation “Commercial” means anything non-domestic, so that includes churches, schools, libraries etc. In fact only military and some government buildings are exempt.

 When we carry out our Fire Risk Assessment it’s worth remembering how fire works, for this we use the fire triangle.

  Fire needs 3 elements to exist firstly Fuel (flammable gases, flammable liquids or flammable solids. Secondly Oxygen (The air around us, oxidizing agents and stored oxygen) and finally Ignition (Naked flame, faulty electrical appliances, hot processes and hot machinery)… Remove any one of these and the fire goes out.

 We have seen that there are many types of hazards and therefore risks, surrounding our businesses, it is essential then that we Eliminate these risks, if we cannot do this, then we should Reduce the effect of them, and finally Protect against any residual risk.

 Remember none of this will work if we do not communicate your findings and plans to those who may be affected.

 This way our businesses should be safe environments in which to work, be protected from the disruption and costs that incidents can bring and demonstrate to others that we are responsible and considerate business people.

All of this has to be a cost effective  benefit to all of our businesses, a benefit which you can take to the bank!

 

If you would like more information, then please contact us via www.anchorhands.co.uk

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Photography for Business

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Otherwise called commercial or Industrial photography can be defined as a process that takes place within or at the requirement of an industrial organisation to document a production process, products, work organisation, employees or the layout equipment or culture of an organisation.

It can cover a wide variety of images including still life for product photography, business portraits of employees, new machinery or processes and architectural interior and exterior.

But why do we need it? Our image is important, it is our identity that sets us apart form our competitors. How often have you purchased a product without seeing it first? “A picture paints a thousand words” I believe is the saying. In a shop we can see the product, touch it smell it, what ever floats you boat, but when on line all we can do is see a picture and text. It is for this reason that the picture needs to attract the viewer to read the text.

Commercial photography is perceived to be  eye wateringly expensive, commercial studios are used by large organisations with large budgets and if you want a slot in the schedule you will pay for it. But it dose not need to be this way. New technology and portable equipment will now allow the photographer to travel and it is possible to offer a more personal service at a price that wont break your budget.

Douglas Anderson.

To find out more visit www.douglasandersonphotography.co.uk

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