Managing risks through recovery

John Cheney looks at areas where resellers can mitigate business risk

John Cheney: Scrutinise your systems to see where risk may be removed or mitigated

The economic recovery in the UK has begun, but businesses in the channel are still at risk. For example, resellers could look into other areas of the business such as sales and marketing.

Sales and marketing systems are not renowned for their role in managing business risk, but customer service and sales ordering can be controlled within a single integrated system, with CRM.

More focus on the bottom line is required from businesses, rather than the headline sales figure, which excludes such costs as bad debts, interest payments on working capital and foreign currency losses.

Avoiding these aforementioned costs as much as possible and maximising the resources available is as important as driving sales.

When dealing with very large organisations or government agencies, getting paid can be somewhat troublesome. Everything down to the invoicing format and backing detail has to be in a specific format or they simply will not pay.

Time spent worrying about such details eats away margins.

Many resellers now have to worry about foreign exchange rates. The exchange rate available on a particular deal may be the difference between making a profit or not. And then there are the operational activity costs and associated costs of importing and exporting.

Revenue leakage is another issue that businesses in the channel need to address. This can happen when companies fail to charge for the service provided – perhaps forgetting to do so or simply as a result of this not being clear under the contract that has been signed.

Resellers must ensure that after-sales services are provided within the boundaries of the original contract agreement.

Having a full customer transaction history at your fingertips in one system is a good first step. Many companies do not have these details easily accessible.

With multiple teams entering details about customers, some details may go unnoticed, and with tight margins, allowing customers extended payment periods without knowing the full context of the situation may dent any anticipated profit.

John Cheney is chief executive officer at Workbooks.com