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Credit Kills Profit – Part 1

Australian businesses are currently being observed to be frequently expanding their credit terms from 60 to 90 days. The natural assumption is that this will foster better relations with their client base – but the big question is: is it worth maintaining customers who seemingly are unable to pay you?

This question is one that appears to be barely discussed in open forums – almost as if it were a taboo topic and not one to be addressed. Having bad debts frequently come with the accompanying symptoms of decline in cash flow, over drafting, cutbacks on staff and limited chances of internal- and external development. Hence every company should have a procedure at hand to protect itself from this often incurable scenario since indeed the business wellbeing is endangered by the increase of extensive outstanding debts to be claimed continuously.

To prevent this potentially fatal situation: the solution is to develop a strategy on credit control, to secure the risk of going into business with clients who might be unable to finalise financial commitment.

Credit control could be taken as a formal weeding process that comprises of a Credit Application Form and Terms and Conditions presented to all possible clients before going into business. Potential first customers with in-depth know-how will appreciate your sound business sense and be ready to fill out the form with its few simple questions, which will save you from a possible headache in the future if establishing a new business relationship. At the same time challenging customers will turn their backs on this procedure and look for an alternative provider to avoid filling in such form.


The standard Credit Application requires the following information:

  • Proprietor’s details (such as sole trader, partnership, corporation)
  • Trading name
  • Address
  • ABN (Australian Business Number)
  • Trade references
  • Amount of credit required
  • Personal guarantees (corporations)


The Terms and Conditions section should contain:

  • Jurisdiction – to eradicate interstate matters, with his signature the potential customer agrees to the laws of the company’s home state.
  • Payment terms – for example, seven, 14, 30 days.

When the Credit Application has been filled out, and the Terms and Conditions agreed to, it is now possible to investigate the credit quality of the potential customer. This evaluation process does not have to be time – nor money consuming if applied to a methodical checklist:

  • Control if the potential client has filled in the complete form and agreed to the Terms and Conditions by signature.
  • Undertake a search to verify the business name is registered to the holder’s name as listed in the Credit Application.
  • Verify trade references with other companies working in your potential client’s industry, considering suppliers already late with their payments might not have been specified in the given form.
  • Investigate in financial data if asked for a large credit. In the event of companies calling for credit, personal guarantees of directors should be standard such in case of omission, and he can individually be rendered liable at the same time as the company.
  • Review other printers trade history to assess if such business is viable in that region.
  • Implement a search through a Credit Report Agency. The results will certainly be dependent on the number of credit already requested.
  • Always procure security if the debt is large. This can be reached through various methods, one of them could be consulting a Trade Debtor Insurance.


Our next blog in this series will discuss controlling the credit.


If you would like to learn more about the debt collection services we offer, feel free to contact us now. We have 30 plus years of experience in providing professional and discreet debt collection solutions for clients of all sizes and across all industries. With debt collection agencies in Sydney, Melbourne and Brisbane we have the east coast covered.


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  • I have worked closely with Boston Commercial Services for over twenty years across four different companies and would not work with anyone else in regards to helping me with my outstanding accounts. Whenever I have started a new role, the first thing I am asked is, “How would you go about cleaning up our accounts receivable ledger?” My answer is always the same – “The first thing we need to do is call Boston Commercial Services”.

    Voytek Bradford

    Freedom Foods Group Limited (National Credit Manager)

  • I have known the principal of the BOSTON Group (Derryn HARRISON) as well as key staff members (including Ben GOWER) for well over 2 decades and have been using their professional services for myself as well as for Powerhouse Logistics Pty. Ltd. on a regular basis, not only in Sydney but on a national basis.

    At all times BOSTON have been extremely pro-active, attentive, courteous and professional with all matters we threw at them. Their advice has always been extremely sound and commercial and I find them to be a "breath of fresh air" within the legal fraternity and have no hesitation whatsoever to highly recommend them.

    Peter Brueckner

    Powerhouse Logistics Pty Ltd (CEO)

  • Expect A Star has worked with The Boston Group for 10 years. In this time we have appreciated the ongoing support of Boston for all of our collection and legal requirements. Like most businesses cashflow is critical to ongoing success and growth, with Boston we have found a partner who are an extension of our business and play a key part in our cashflow management. The Boston Group bring a level of expertise to our business which is valuable and coupled with their excellent customer service we look forward to continuing to work with them for many years to come.

    Ryan Meldrum

    Former CEO

  • I have been using the services of The Boston Group and their legal entity for over 11 years. During this time I have found their service to be impeccable, delivered with the utmost professionalism and integrity. The vast majority of cases that I have placed with Boston were far from straightforward, requiring legal acumen and delicate handling. Having used all methods available without success to procure payment, I confidently placed these matters into their safe hands. In all instances a successful outcome was achieved.

    Mark Parish

    Credit Manager

  • SNP Security has had the pleasure of working with Boston Commercial Services for the past 11 years. Boston has played an integral part in the continuing success of SNP Security’s low DSO’s, 90 Day % Debt & of course Bad Debts Written Off.

    Amanda Griffiths

    National Administration Manager

Boston Commercial Services prides itself in offering specialised, professional services, through a highly experienced team of debt collector, with personalised client attention.