Better communication around financing between VARs and their business partners was top of mind at CRN’s inaugural Finance Forum this year. Improved communications on both sides were necessary if the channel is to benefit from the best credit and finance arrangements possible, according to all speakers at the half-day event.
Mark Ancell, general manager for credit services at Computer 2000, said it is primarily about forming and developing strong relationships between resellers and service providers such as trade credit insurers and distributors.
“It is all about relationships. Work with us to develop your business. We can and we will support your business if we are kept informed and you commit to us,” he says.
Last year saw C2000 put an additional £40 million of credit into the marketplace, and this year already it has added another £20 million. But for it to make the right calls about which companies get credit, it needs the most up-to-date information – not just about late payers and the like, but about business strategy and market plans generally, he says.
With the right information, C2000 can better target and customise the assistance it provides, Ancell says.
Pete Davies, country manager at Atradius, agreed, saying that the market has become more unpredictable, with payouts growing from £132 million in 2007 to £320 million in 2009. With such unpredictability came a need for VARs to provide better and more timely information to its insurers in order to get the best deal possible.
“The large insurers have not made a profit from underwriting activities in the last two years,” Davies says. “Our job is to try and create virtual credit circles – we want everybody to keep on going if possible.”
Alison Hopkinson, regional director at the FD Centre, gave a talk on the finance directors and how they can help VARs. Banks have not loosened their purse strings again when it comes to SMBs, so smart, objective financial advice – whether from a part-time consultant or full-time finance director – is important.
When SMBs are seen to be managed well, they can get more favourable finance from all partners, she says.
Christopher Harlowe, partner at legal firm Speechly Bircham, says VARs should protect themselves from financial fall-out from failed business partners by having documentation around liability and Retention of Title as watertight as possible.
One’s losses in such situations may be slashed by having the right documentation and sending the right emails – especially if a partner enters administration and the administrators look at selling your inventory to recoup costs.
“If you don’t, the administrator can argue that you allowed him to continue to sell,” Harlowe points out. “And if they do sell them for a profit, it might be due to you.”
Nitin Joshi, chair of the event and founder of Channelmoney, says it was all good advice.
Many channel players have found struggling out of the economic doldrums of 2009 stretching into 2010, with effects expected to reverberate into 2011 and beyond, Joshi says.
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