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It seems to have been something of a “buzz word” for a few years now. We first came across the term “big data” back in 2014. That may not be the time about which it became popular, but it was the first time we come across it. We wondered what on earth it was. Still now, were not 100% sure, but we suspect it has something to do with more efficient ways of managing large volumes of data.
However, what it also told us is that there is an interest in data. Surely, this is nothing new to business though, right? How can a business be run without it? It seems as time passes it becomes harder and harder to imagine that as a reality, but a generation or two previous, we are dutifully informed that this was rather normal.
Perhaps not in all industries, however for some professions we have heard anecdotes of “Bill” losing his job on a Friday and meeting his mate in the pub on Saturday, having a telephone number written on a bit of a cigarette box by his mate and then ending up back in work Monday morning for the lucky owner of the telephone number written on said cigarette box.
There is now, if done properly, quite a lot to do when it comes to employing members of staff and following the introduction of the workplace pension scheme which was introduced in 2012, it is a list that is getting bigger. Furthermore, employment legislation is changing all the time, so it is important for employers to ensure that they keep on top of their employee’s data. A checklist to help with that can be found here.
We understand that such a casual approach to data is not limited to the employment of staff for certain businesses and that sometimes it, still today, can apply to the way that some businesses manage their own customer's data. Efforts by UK regulators to protect companies from misusing people’s personal information were introduced with GDPR which was an EU law passed in 2018. However, since Brexit, the UK has adopted GDPR into UK law so that it remains much the same.
However, having had the experience of working for businesses of all sizes and shapes, we at JSP Credit Management know for certain that merely complying with DPA 2018 and UK GDPR is not going to guarantee your business success. As sports fans, we have been watching the Snooker World Championships over the last couple of weeks and one of the Commentator’s said something which could apply here. He said, “You cannot win a match in the first 4 frames, but you can lose it”.
What we mean is, complying with data protection laws will not guarantee your business success but it can certainly contribute to a business’ failure if not complied with. We understand that fines for data protection breaches can be set as high as £17.5million. Not the kind of money anybody wants to have to sacrifice were sure. Not to mention the reputational damage which occurs through media coverage of data leaks and it seems the bigger you are, the more coverage it gets.
However, when given the right amount of respect we have seen how well a company controls the data of its clients be the difference between a high performing team and a low performing one. We want to reiterate that point. We have seen teams bogged down by systems that are not kept up to date with their customer's information. We have seen it impact every area of their business and yet it is so often overlooked. We have a theory on why. Here are some reasons we think are relevant:
Ø It is mundane
Ø There is not enough time to do it
Ø It is not important enough
Ø A system that is not fit for purpose
Ø A lack of financial investment in it
Ø An unmotivated team
Sadly, some companies are suffering from all of the problems above at the same time! Perhaps you have witnessed it yourself. A poorly managed database is both the cause and effect of a wide range of problems (some of which are mentioned above) but in terms of the causes from a financial perspective, allow us to give you the benefit of our experience.
Cash collection for the month is low. You're concerned. You want to know why. So, it gets brought up in the next team meeting. The credit controllers go through the ledger with you. Time and time again, you hear the same line, “waiting for a call back”, or “awaiting a response to an email”. Hardly any confirmed payment dates from some of the bigger accounts, a few promises to pay from your most loyal customers who never let you down on payment.
The issue is data collection starts from the very moment that you first interact with a potential customer, but some companies do not want to talk about data, they would rather talk about how much the project is going to be worth to them so they can try and predict how much of a bonus they will be due next payday if they land the deal. It may be they are fearful of inconveniencing the prospective buyer who they suspect does not have the answer to the questions they need to know the answer to.
In some sectors talking about payment terms is seen as taboo. It certainly would not crop up during tender or in a kick-off meeting. But there is a price to pay for not agreeing on the exact process which needs to be followed to ensure prompt payment and some customers will not need an excuse to delay payment and yet by avoiding this stage of the data collection process that is exactly what they are getting. Ask the difficult questions. Where do you get your POs from? How long will it take to get a PO? How will it be sent?
We have seen hundreds of thousands of pounds tied up in unpaid invoices due to problems that can have been easily avoided by establishing these facts before the work was done. The next step is to ensure that this vital information is stored on your system so that this can be used to support the cash collection endeavours of your credit control team. Some companies will only talk to a credit controller who is armed with a PO number, but if your system does not have anywhere to store it, then they are already facing an uphill battle.
Our years of experience has taught us to be extremely vigil
ant around the intricacies of different companies’ various requirements. Sometimes effective debt collection has got very little to do with forcing companies to pay who are struggling with their own cash-flow problems and more to do with the almost forensic level investigation into the minute details which might have been missed throughout the sales cycle which are the key to unlocking payment.
If you have been struggling to get an invoice paid and would appreciate another pair of eyes to look at it for you then visit our website at www.jspcreditmanagement.co.uk or give us a call on 07842869015
to discuss your needs. We operate on a no-win-no-fee basis for bad debt recovery and our credit control and credit risk services can be ordered via our website with the littlest of hassle.