Purchasing Sales & Marketing

GPI 005 – Create your company’s credit reference handout before you are asked.

When you want to buy something of value, prepare your complete credit reference document to handout.  Prepare a brief professional-looking handout for your sales people to use for conveying information about your company’s solid financial health.  If you are private and the owners will not give out financial information, you have to be able to reassure your customers about your ability to pay your obligations.  Most importantly, you need to demonstrate your ability to fund contracts that customers may give you.  You should be able to publish something short (i.e. printed handout, electronic PDF file, etc.), to give to all your sales personnel that can be disbursed to various buyers to assure them they are dealing with a financially sound company.  You want them to know your firm is well run and also makes money.

Update and offer a current credit reference list that is easy to distribute.  Make this document easy to understand.  Pass it out to customers and vendors both.  It should list 99% of the questions that are normally asked by those potential customers considering granting credit (caution: exclude social security numbers, officers’ home addresses, personal cell phone numbers).

Include standard data found on any credit reference document exchanged between businesses.  This list should include the information which is fairly standard data traded among companies doing business with each other in the marketplace.  Having this ready to be forwarded to potential vendors will speed up the credit approval process.

Being prepared declares your professionalism.  Many times having information prepared, up to date and available insinuates to customers you are most likely a solid customer.  If you can email this to them while they are on the telephone, this will tell them you are well prepared and should be easy to grant credit.  Companies want to be assured.  They will sense there is a problem if they must pry information out of you for a credit purchase.  Make it easy for them by being prepared.

Have information ready for new vendors.  For purchasing personnel, be prepared for new vendors and complete your credit reference material ahead of time with more information than asked.  Vendor credit-granting personnel will appreciate your fast response and be more apt to grant credit if you are quick to respond with more information than requested.  They do not want to spend money investigating you, so, if you seem well prepared and someone they want to do business with, they may see your credit reference listing and automatically approve the credit without any background check.  For example, if a vendor asks for three credit references, give them your credit listing that lists five, six or seven large well-known companies with telephone fax numbers, contact names and titles.  Your response implies you are prepared and do not have any problems.

Do not hesitate giving out information; give it out immediately.  Do not argue with what is requested.  The information may be overkill but you want credit and you want the increased credit that you will seek a year from now.  When you do not send what is requested, it sends a bad signal you may have financial problems especially when you are attempting to establish yourself with a new vendor or customer.

Your company Credit Reference List should include the following pieces of information:

  • Company name, address and other major facility addresses (offices and warehouses)
  • Give a very brief description of what your firm sells, provides.  (i.e.  Canada’s largest yogurt manufacturer, premium real and look-a-like leather goods, importer of choice oriental perfumes and scents, heavy metal manufacturing of bronze, copper, silver, gold and other various alloys, variety of metal plating services, distributor of over $100M worth of brands of personal hygiene care products, professional dance lessons for customers up to 16 years old, classic piano lessons for over 39 years)
  • Physical addresses, remit addresses, warehouse ship to addresses
  • Company telephone and fax numbers
  • Company owners’ names, titles (do not give home addresses), indicate that the owners will or will not sign personal guarantees
  • Bank(s) addresses, loan officers, telephone and fax numbers and email addresses, mention lines of credit that are open and who to call to verify business loans and credit (do not make the vendor have to ask for this because they must have your permission —make it easy for them)
  • Credit references; the more the better – (list name, address, telephone numbers and contact names and titles) for at least seven to ten or more vendors of substantial size who you know ahead of time will give good or excellent credit references if independently contacted
  • Federal identification number (EIN )
  • Dun and Bradstreet number (if applicable)
  • SIC industry code(s) served
  • If you are public, give the trading symbol for your company and stock exchange,
  • If you are private, you may or may not mention audited financial statements are available if necessary (all dependent upon the magnitude of the contemplated purchase and attitude of the owner (s)).

You need to keep customers’ buyers happy and not worried.  They want to be assured about the vendors they choose when drilled by their bosses.  When those buyers know their chosen vendors make money, they will sleep more soundly at night.  Vendors who are losing money will not be vendors for long and buyers know this and do not like the risk.  They want to feel like they will not have to pay a lawyer to get their money out of you.  Reassure them and get the data to them asap.

Give them what they want; they are spending money on your word.  You owe it to them to help them do their job.  Make them relax and give them what they request, willingly and without hesitation, and you will make them happy.  Relaying your positive financial information is another method to reassure the buyer he made the right decision choosing you.  You want credit so do what is necessary to expedite this process.

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