It used to be…that a simple handshake or gentleman’s agreement was sufficient formality for anyone entering into business agreements.  The underlying foundation involved personal trust based on reputation and good faith between all parties.  But how things have changed. Life simply isn’t what it used to be. No longer is one’s word good enough in business but rather guarantees, references and letters of credit rule our business domain. We are governed by bureaucracy, compliance and never-ending form-filling whether we like it or not and whether it be good or otherwise the simple fact remains that the way we do business has changed and we all have had to embrace change in order to survive.

The racing community is not immune from these changes and the obligations that go with such change. However there are some within the racing community who have not identified the need to change and as a consequence have suffered as a result. None more so than in the area of financial management.

Over recent months NZTR has received an increased number of complaints regarding the level of unsatisfied debt that many industry sectors have had difficulty recovering. This is monies owed to trainers; and monies owed by trainers to industry affiliates. Both the number of debtors and the aggregate of debt are significant. Simply put, there are industry stakeholders running up debt and not satisfying this debt when obligated to do so.

However when looking for reasons as to how much of this doubtful debt was created a great deal can be directly attributable to the reluctance of many to embrace change and adopt many of the business practices that characterise our modern times.

Trainers and industry affiliates alike are service providers, and in many respects no different whatsoever from other professional operators we deal with in day to day life.  The fact remains that racing is a business and those within the industry need to ensure their financial stability is maintained.  This is assisted through the adoption of sound business and management practices.

With regard to debt – prevention is easier than collection and listed below are some steps that can be taken to mitigate the risk of having to write-off monies owed by non-paying clients.

CREDIT CHECKS
An increasing number of businesses now require prospective customers to fill out an application form, and while in most cases existing customers are known these applications usually include consent for a credit check. What will a credit check tell you? Sometimes, the people who spend the most money are so heavily leveraged that they do not have cash left over to pay their trainers, and a credit check will reveal if a prospective client appears to have too much debt. And running a credit check can be as easy as a few clicks on the Internet. The cost of the credit check is very inexpensive when you balance it against the cost of having a non-paying client in your stable.

DETAILS FROM PREVIOUS TRAINERS
Your training application could ask the client to list their previous trainers and their reasons for leaving those trainers. Even if you don’t know the trainers well enough to contact them and ask about the prospective client, what the prospective client says about why they left can reveal useful patterns.

GOOD BILLING PRACTICES
All fees and services must be billed on time. You are an equine professional, not a finance professional, so consider hiring a bookkeeper to handle your business’ finances. It can cost very little per month, and the bookkeeper will likely pay for him or herself. Your bookkeeper will send your client invoices out on time, even if you are away.
If you are too busy to send out bills consistently every month, your clients will suffer from sticker shock when they get one big bill, leading to arguments about the bill amount and slow payments.

CREDIT CARDS
Clients like credit card payments because they are quick and easy and they do not require cash. Credit card companies do charge fees to process credit cards, but those fees should be balanced against the benefits of being paid on time and regularly.