Debt Info

Benefits of understanding your Credit Notes

October 5, 2023

If you were granted only two tests to really understand a business, here’s a recommendation. Firstly, look at the bank accounts to see what cash is coming in and going out. And secondly get to grips with the credit notes.

That, of course, is the advice of a confirmed number cruncher – but the reality is that understanding credit notes is often overlooked as a tool for understanding what is actually happening within a business. Unfortunately, the lack of awareness around the company’s debtors book is an aspect in many businesses where incidental credit is extended. And number cruncher or not – your Accounts Receivables book is the bedrock of your business. It acts as a SCORECARD for your financial and operational processes.

Reining in free-hand
How often have you seen credit notes with “free-hand” descriptions as to the reasons they were granted. Free-hand responses make collective analysis impossibly difficult. In Nimble’s experience, the value of analysing credit notes is under-appreciated and because of this attitude – we find it tends to be very unstructured.

At Nimble, when we engage with clients, we have found enormous power in being able to collate credit notes into logical groups in order to discover why people are not settling their accounts. It gives great insight as to what is not functioning optimally in a business, and it focuses a spotlight on operational challenges.

Between the lines
Credit notes quickly tell you whether you have administrative challenges such as: payments not being allocated, pre-invoicing to massage sales numbers, pricing errors and random discounting offers. They will just as easily reveal customer satisfaction and product challenges such as warranty claims, short deliveries, incorrect product and missing PoD’s. A veritable treasure trove of valuable insight can be found in the not so humble credit note.

It is this knowledge that will serve as the first step in fixing troubled front office environments. So when the debtors book is slipping out, take a look at the credit notes – you might just discover that it is not the credit controller’s fault that money is not recoverable.

There’s no doubt that business benefits are experienced immediately – just by placing the correct amount of detailed attention to credit notes.

Devil in the detail
Credit note analysis unlocks real value:

  • The spotlight will immediately highlight areas where there are deficiencies in the business; be it in under-performing branches or regions or where processes are failing.
  • Cash flow is enhanced, as payments on invoices are normally delayed until the credit notes on the account are resolved.
  • Time efficiencies and cost reductions are built-in as resources no longer have to prepare, approve and distribute credit notes – freeing up time for other collection activities.
  • Management reporting is enhanced through a systematic credit note process within the finance function.
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St Agnes Primary School

St Agnes is a public school situated in Woodstock, Cape Town.

Nimble Group actively supports St Agnes Primary School through the Partners for Possibility programme. We dedicate resources to a variety of initiatives aimed at creating an enhanced learning and recreational space, enriched student experience, and optimized day-to-day running of school operations.

Computer room upgrade Our dedicated team of IT technicians has upgraded the school’s IT hardware and software, creating a more user-friendly and modern environment for students and teachers using the computer room daily.

Playground painting and revitalization
Our enthusiastic volunteers devoted their time to painting vibrant murals and interactive games on the walls and paved areas of the playground.

Enriched student experience
Nimble strives to continuously improve the student experience by celebrating academic excellence, sponsoring prize-giving events, and more.

Day-to-day operational support
We also contribute to the school’s operational efficiency by offering administrative support and providing access to Nimble’s HR and Finance functions.

Peak Child

Nimble Group has taken the initiative to establish an Early Childhood Development Centre, which began operating in January 2019 in Woodstock, Cape Town. The centre operates under the guidance of Peak child, and while accessible to the public, primarily serves as a subsidized preschool for the children of Nimble staff.

Peak Child aims to equip children with the best possible foundation for life by providing affordable, high-quality preschools in close proximity to workplaces, catering to the needs of emerging middle-class parents. Since its inception, Peak Child has focused on collaborating with socially responsible employers to support their staff beyond conventional employee benefits.

Peak Child offers comprehensive programmes for children aged 3 months to 5 years. Through partnerships with prominent educational experts and local primary schools they ensure that children transitioning from Peak Child are socially, academically, and physically prepared for admission to any of Cape Town’s leading primary schools. Peak Child currently operates three schools, including Peak Child Nimble.

Nimble has made a significant investment in this project, with plans to replicate this model close to its Johannesburg offices.

Altius et Latius Trust

The Altius Et Latius Trust is a school education initiative aimed at providing bursaries to historically disadvantaged students, enabling their attendance at top schools in Cape Town.

The primary goal of the trust is to promote equitable access to high-quality public education, fostering lasting transformation. Their objective is to support fifty talented learners in gaining admission to high-performing schools.

Nimble Group continually makes a substantial impact on this crucial initiative by providing essential resources for additional student support, such as tutoring, funding for school events or excursions, sporting equipment and more.