CAPÍTULO IV ÍTER LEGISLATIVO ÍTER LEGISLATIVO
B) LA MATERIA DE SOCIEDADES MERCANTILES POR ACCIONES, ¿ES OBJETO DE RESERVA DE LEY FORMAL? EN ACCIONES, ¿ES OBJETO DE RESERVA DE LEY FORMAL? EN
Marketing is defi ned as the commercial activity prior to selling, that is, identifying markets for products, fi nding the substantial customers for those products, ad-vertising and promotion plans, seeing how the competition operates, including their credit terms, and early discussions with prospective customers. Selling is best defi ned as persuading customers to buy products and the whole process of taking and servicing orders.
At various early stages, well-organized companies assess the viability of pro-spective customers, as well as deciding what investment will be needed for the possible volume of sales and their credit periods. For example, planned sales of
£100 000 per month to customers enjoying 60 days’ credit will mean an invest-ment in unpaid sales of £200 000 plus, for an eleinvest-ment of overdues and disputes of say 20%, a further £40 000, making a total of £240 000. If any contracts need special, or non-standard terms, the invested amount will alter.
It pays, therefore, to identify prospective customers for, say, 80% of planned sales and have them credit-checked:
1 Early warning: As possible prospects are identifi ed by sales or marketing staff, their names are passed to the credit manager to assess for credit. The expense and effort may be wasted if orders do not materialize, but delays are avoided when they do. In addition, the company feels better equipped for strong sales when it knows the good, average and poor risk accounts up front. It is also less likely that the poor risk accounts will place orders anyway.
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2 Sales planning meetings: The credit manager attends when names of pro-spective customers are being bandied about. He may already know them, and in any event is in a position to move quickly to check them. This involve-ment can help direct sales plans to the right customers.
3 Visiting prospective customers: A joint visit with the sales or marketing person, before the business becomes fi rm, provides a good opportunity of assessing the people and the premises. This can help in two ways: it adds depth to the written credit reports; and it is the chance to start building strong personal contacts for future collections.
It is of the utmost importance for customers to see sales and credit as a united and money-conscious team, and it is equally important for personnel throughout the selling company to recognize that too. When this team approach is not pro-moted, the wrong kind of customer can easily play off one function against the other in future negotiations, for example, alleging concessions and ‘old’ agree-ments.
Actually opening new accounts should begin with the requirement for new customers to complete an ‘application for credit’ (see Figure 5.1 and accompany-ing notes). Apart from providaccompany-ing more accurate details than those given verbally, or on orders, the customer is reminded of the terms of payment and his com-mitment to paying them. The form should also provide the name of a contact for payments. If the business is deemed to be too fast-moving to wait for form-fi lling, a fi rst order can be taken up to an agreed maximum – that is to say a value that, if lost, would not be too painful for the seller, say £1000. The credit application form should then be completed before a second order is taken.
The decision to open the account should be communicated with enthusiasm to the customer’s fi nancial contact by a credit person. This is a good opportunity to fi rm up the relationship and restate the payment terms. As a control for this step, it is benefi cial if only the credit department is authorized to allocate new account numbers, without which the business cannot go ahead.
Newly opened accounts should be placed in a special section of the sales ledger for a period of three months or so. Then, regardless of value or the stand-ard collection system, every new customer should be telephoned and followed up personally for that period in order to try to ensure that no bad habits develop.
It is extremely valuable to make immediate contact with the customer’s pay-ment person by sending a new account letter, a friendly version of which is illus-trated in Figure 5.2. The letter should always be signed personally, and should of course look like an individually prepared letter for that customer only, rather than what appears to be a standard computer print-out. A good tip is to make a follow-up call a few days later, as the customer’s reaction may indicate their at-titude to prompt payment.
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Name and address of applicant State FULL name of proprietors/
partners and home addresses State FULL trading style, if any:
__________________________________
__________________________________
__________________________________
__________________________________
____________ Postcode ______________
Address for invoices/statements if different from above:
(Please attach a copy of your letter heading) Credit references:
* Not to be completed by customer – names to be supplied by salesperson
[seller company name] will make a search with a credit reference agency, which will keep a record of that search and will share that information with other businesses.
In some instances we may also make a search on the personal credit fi le of principal directors. Should it become necessary to review the account, a credit reference may be used and a record kept. We will monitor and record information relating to your trade performance and such records will be made available to credit reference agencies who will share that information with other businesses when assessing applications for credit and fraud prevention.
I/we agree that this information may be used to support a request for credit facilities with [seller company name], and associated companies (a list is available upon request) in accordance with their credit vetting procedures.
Customer signature__________________________
Position__________________
Estimated purchases £_______ per month. Credit rating required £____________
(e.g. 2 x monthly purchases).
We note your Standard Conditions of Sale, and agree to all clauses and will pay for any goods/services supplied by you on the stated terms, i.e. ALL invoices are payable 30 days from invoice date. In addition, our attention has been drawn to the clause relating to Retention of Title, which we have duly noted.
Customer signature__________________________
Position__________________
Figure 5.1 Application form to open a credit account
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Notes for the credit risk assessor on the Credit Application Form (Figure 5.1)
•
Name of applicant: This defi nes the type of customer (person, sole trader, partnership, limited company or non-standard), which is essential to decide the risk, the type of collection approach and to capture the precise name and style for possible need.•
Address for invoices and statements: Sometimes the payment address is different from that for deliveries. Invoices sent to the delivery address may suffer delays before they are passed to the payment offi ce.•
Full name(s) of proprietor or partner(s) and home address: The customer should know that anything less than limited liability means personal liabil-ity of owners or partners for debts. There is every reason to contact home addresses if no satisfaction is achieved at the place of business. In credit checking, the home premises may well represent wealth for future recovery if needed. With partnerships, unless limited by deed between the partners, or by limited liability statute, there is joint and several (that is, separate) li-ability on the part of all partners.•
Limited company registration number and offi ce: This is needed for legal ac-tion, where writs and summonses are required to be served on the offi cial address. Registered numbers are unique and useful when requesting credit reports, to avoid confusing similar but different fi rms.•
Length of time established: Firms less than two years old have a high failure rate – possibly 50% of businesses fail within the fi rst two years. Good policy is to restrict credit until a relationship has matured, or obtain third party guar-antees for higher credit. Longer established fi rms have track records which can be checked.•
Name of payments contact: This is extremely useful for future collection ef-forts, but may not be obvious at this early stage involving salesperson and buyer.•
Letterheading request: This is a useful check on the name, address and style data given. Customers can be inaccurate when completing forms, and sales-person may use abbreviations.•
Credit references: Bank details and trade references are often undervalued, but as a quick and cheap source they can help to establish basic details. Data protection legislation now makes it imperative to be clear as to what will, or will not, be done in respect of credit enquiries; sellers should ensure that their intentions are clear to the customer and accepted by him or her.•
Estimated purchases: This must be the customer’s estimate, not the sales-person’s, which may be optimistically higher and frustrate the real credit rating needed.•
Credit rating requested: This must be a multiple of monthly sales, since the second month will be delivered before the fi rst month is paid.•
Acceptance: It is important to give the customer sight of the conditions of sale (even on the reverse of this form), and get agreement to them here – in particular the credit terms, but also any specifi c special terms which it will be the seller’s intention to enforce.89 On receipt of the credit application form, the credit manager should organize the required credit checks (their depth according to value) and, if acceptable, allocate an account number.