a.b.e.® Credit Services

At a.b.e.®, the Credit Control Department is an extension of its overall commitment to service excellence.

a.b.e.® is now offering a Credit Service exclusively for the use of our Employees and our Customers.

Our Credit Service offers you:

  • Free credit advise and guidance through our question and answer facility,
  • Access to quick and practical credit control tips,
  • And the option to call on us for your Credit consultation and training requirements.

Frequently Asked Credit Questions

What is the best way to secure payment from a client across the border?

There are two simple options:

a) Secure the debt through an underwriter (A credit insurer such as credit guarantee)

b) Arrange a letter of credit through a reputable bank, which will play middle man to the transaction, securing your payment from the purchaser, but paying it over to you only once the required stock, quantity and paperwork is delivered. Thus protecting your client and yourself.

How do I protect my business from people who send my clients fraudulent bank detail change notifications?

If you had asked me this question 3 months ago it would be different to the answer I give you today. The fraudsters come up with a solution to every protective measure we put up, and keeping up with their next scheme is nearly impossible.

The first time this happened we asked our clients to ensure the changed banking detail change request is accompanied by a bank stamped confirmation, but this was defrauded. Then we asked our clients not to accept requests that come from an e-mail address which does not have soandso@abe.co.za mail address, and this was then also defrauded. Then we asked the clients to refer to our statements and invoices for the banking details, and this too was defrauded!

However, no situation is hopeless. Our biggest protection against fraudsters has come from good relationships, and open communication with our clients. We are in constant contact with them regarding such issues and have asked them to check such information with us in writing and via telephone – before paying into a “new” bank account. This has enabled us to stop the fraud from ever happening.

Therefore in a nut shell:

  1. Have the practical step in place to make defrauding your company difficult. I.e.: Detail must be submitted on a letter head, with a bank stamped authority, from a proper e-mail address.
  2. Tell your clients to be aware of fraudulent e-mails and let them know on what documentation they will find your banking details and whom they can contact to verify them.
  3. Ensure that your relationships are good, and that communication lines with your clients are open.
Why is abe so difficult when it comes to crediting settlement discounts, especially when payments are received only a day or two late?

Let me begin this discussion by assuring you that every department of abe is focused on customer service. We spend much of our resources ensuring that our people and products are able to service (you) our clients at exceeded quality levels, with reasonable prices.

We also work hard at running our accounts and creditors book with a high level of integrity. We do our best to collect and pay our accounts, on time and according to terms.

Maintaining these values however, requires a healthy cash flow level, and failure to maintain it will increase credit and interest costs substantially, which will force us to increase our prices, which will in turn negatively impact our clients, the economy and ourselves.

The intension behind offering a settlement discount is to assist a business with its cash flow, by securing payments before they are due. It is an expensive form of raising funds and if allowed on late payments, causes two major complications:

It drives admin and interest costs higher than budget, because one is then paying for early settlement (in the form of discount), AND late settlement (in the form of overdraft interest). Most companies do not have surplus cash and depend on credit for the running of their day to day business; thus every cent used to pay for a creditor account that is not received from its debtors, must be paid out of the overdraft.
It sets a precedent that late payments are acceptable and even rewarded, it is not fair towards clients that do pay early, and is not in line with our sales agreement.
Abe have been very conscientious in communicating the early settlement discount terms, even setting out when payments must be made in order to reflect in our account on time. We do this in our welcome letter (sent when the account is opened) and on our interim statements that are sent every month.

We are honestly not “difficult” about giving settlement discount on late payments. The terms of settlement discount is well communicated and reckless allowance of undeserved settlement discount raise our costs, which at the end of the day hurt you, in the form of raised prices.

If My Spouse and I get Divorced, and we were married in Community of Property and he / she has a Bad Credit Record. Does it affect me?

Being married in community of property, means that anything you own, and any debt you make, belongs to you both of you equally.

If you marry in community of property and any bad debt, or default information occurs during the marriage, both parties will be listed.

All debt in a community of property marriage is made “jointly and severally”, meaning that both parties are 100% liable for the debt, and in the case of non-payment, both parties are 100% liable for the debt – irrespective of who uses the purchase, or in who’s name the purchase is.

If however, the bad debt or default data occurred before or after the marriage, it will not affect the other member.

How important is it for your company to have a good credit score?

Credit plays a big role in the functioning of most businesses today. It is used to:

  • Purchases raw materials or stock for re-sale and thereby plays an integrate role in the cash flow of a business.
  • It is used to purchases high value assets such as buildings, machinery and equipment.
  • It is used for the day to day running of a business, for example for telephones, stationary, maintenance, but to name a few.

A successful company will require short, medium and long term credit to operate to its optimum potential. Without a good credit score, a company will not be-able to grow and develop to the same capacity that companies that are able to use credit to be make it more efficient, will. The end result is they will lose market share, if not close completely.

How often does a credit score change?

When you borrow money, your lender sends information to a credit bureau which details, in the form of a credit report, how well you handled your debt.

From the information in the credit report, the bureau determines a credit score based on five major factors:

Previous credit performance,
Current level of indebtedness,
Time credit has been in use,
Types of credit available, and
Pursuit of new credit.
Although all these factors are included in credit score calculations, they are not given equal weighting. Here is how the weighting breaks down:

As you can see by the pie graph, your credit rating is most affected by your historical propensity for paying off your debt.

Your credit score can change whenever you improve or slack on your payments; or when you increase or decrease balance owing, and when you apply for additional credit.

The amount of times the score will change is therefore dependant on your credit activity.

Our credit policy states that we offer 30 day terms only, although I have noticed a hand full of 60 day accounts. How do we correctly handle a customer’s requests for 60 day account, particularly referring to the below points?

On what grounds do we know if it is a valid request?

Every request for credit, irrespective of terms requested, according to the consumer protection act, must be properly investigated. Every request received is therefore a valid request.

What does a customer need to give or have, to get such an account?

Terms of sale refer to the terms which the company is allowed to offer, according to its Credit Policy. (A Credit Policy refers to the companies’ policies surrounding the granting of credit)

If a client requires terms that are longer than the terms noted in the terms and conditions, the request must be submitted in writing, on their company letter head, as this will form an “annexure” to the credit agreement.

When do you approve such a request?

If ones Credit Policy states that credit terms at 30 days, it means that the company’s successful cash cycle (Time between purchasing of stock/raw materials, manufacturing and/or delivering it, receiving payment for it, and paying creditors) has been carefully calculated on the receiving of payments on such terms.

The required profit margins vs. prices are calculated accordingly, and the giving of extended terms can cost the company profit, (Creditors are then paid with overdraft money which costs interest etc.) as well as leave you in a negative cash flow situation (where you can’t pay creditors, get stock, produce and deliver again!)

Before approving such an account, talk with your sales, creditors and financial managers and find out:

  • Can you get extended terms from your supplier?
  • Is there enough overdraft facility to cover the extension and still pay your creditors?
  • Are you charging a price high enough to cover the extra costs of extra terms and still make the necessary profit?
  • Is the profit margin on the bulk sale sufficient to cover the cost of the extension?

Then it is also important to ensure that your client has the affordability needed to carry a 60 day account, which requires a higher credit limit than a 30 day account.

The Credit policy is in place for a reason, and breaking its terms should be the exception to the rule.  Be careful to do so as it usually brings with it financial consequences.  At the same time however, no request should be ignored, as the client is always king and you don’t want to lose him to a competitor who will indeed give him the extended terms, especially if you can indeed afford to facilitate him.

Why is a Bank Code important in opening a credit facility, and what is Delphi Score and how does it affect my credit rating?

A bank code is requested from ones banker, when an application for a credit limit, or credit limit increase is requested from a client.

This gives the credit lender an indication of the applicants ability to pay the account in accordance with the credit limit requested.

For instance, if a client applies for a credit limit of R20,000-00, we will request from our bankers a code, which could be returned as an a-o, referring to the amount requested.

The meanings of the codes are as follows:


Undoubted for all business engagements


Good for all business engagements


Good for all normal business engagements


Good for moderate business engagements


Figure to high


Financial position unknown & unable to comment


Occasional extensions and dishonoured paper


Numerous extensions and dishonoured paper


Account not on file


Code not received


Loan Account


No Code: Bank decline


No Code: Savings account 

A Delphi score refers to a credit bureau’s statistical scoring model that is designed to predict the likelihood of business failure over a twelve-month period.

Scores are band from 1-100 (The higher the less risk) and aligned to 6 risk bandings ranging from very low risk to maximum risk.  These grades are updated real-time, and gives us the latest risk profile available on a client.

We use this in conjunction with other credit information we gather, (such as bank code, trade references and financial statements) to determine an applicant’s willingness and ability to pay their accounts, and accordingly grant them a credit limit.

Please list the 10 most important aspects regarding the CPA that you believe are important to anyone wishing to ensure they comply

Direct marketing:

> Consumers can now cancel any direct marketing agreement within five business days, allowing you to change your mind about a purchase.

> You can also now make use of an “exclusion register” whereby you can register a pre-emptive block against receiving any electronic communication.

> The act now outlines that you may NOT be contacted for direct marketing on:

Saturdays before 09h00 and after 13h00;
All other days between the hours of 20h00 and 08h00,
On Sundays and public holidays.
> From now on a salesperson visiting a consumer must wear an identification device such as a badge.


> Ordering online? Goods will have to be delivered at an agreed date, time and place. If not, you will be free to accept or cancel the agreement – it’s your choice.

> Companies are also obliged to deliver goods that match the sample or description of the product. You have the right to examine your purchases before accepting them, and reject them if you’re not happy.

> If you didn’t get a chance to examine the product and are unhappy with it, it can be returned at the supplier’s expense.

Returns and refunds

> Consumers have six months to return faulty or unsafe goods.

> You will have a choice between the supplier repairing or replacing these, or refunding you in full.

> If the product fails again within three months, the supplier must replace it or refund you, barring gross negligence on your part.


> A producer, distributor, importer or retailer can now – in certain instances – be held strictly liable for any harm or damages suffered by a consumer using a product, irrespective of whether negligence can be attributed to them.

> You will need to approach the courts to institute any claim for damages based on “strict liability”.


> Companies have to provide you with an estimate for the work – which you must approve – and cannot charge you more than that estimate.

> If more work is required above and beyond the estimate, they first have to get the go-ahead from you.

> Companies also can’t charge you for preparing their quote, unless you agree to this.

SMS competitions

> Companies can no longer charge you an exorbitant R5 or R10 to enter an SMS or MMS competition, but will have to stick to the usual network rates.


> Automatic contract renewals will be no more. Companies will have to contact you – in writing – between 40 and 80 business days before your contract expires. They have to give you the option to continue your contract, change its terms or cancel it.

> Note that the contract will continue on a month-to-month basis until you make your choice.

> You will also be able to cancel contracts at any time. If you’re unhappy, give the company 20 days’ notice and you’re home free.

> You still have to pay anything you owe the company up to the date of cancellation, and you might also be charged a cancellation fee.

> Suppliers have to use understandable language in contracts.


> You will be able to return and claim refunds for poor-quality goods because there is now an implied warrantee of six months for any goods purchased – irrespective of other warranties.

> However, you can’t insist on a refund because it is cheaper at another store or the design no longer fits in with your décor. Also, if you have tampered with the goods in any way, then a demand for a refund or replacement can be denied.


> No longer is it a case of what you see, or don’t see because it is hidden, you get. The act identifies the consumer’s rights to good-quality products in good working order and fit for their purpose.

> Suppliers must let you know of all defects.


> If you cancel a booking or reservation, the supplier is entitled to charge you a reasonable cancellation fee.

> If the booking is cancelled because of the death or hospitalisation of the person who made the booking, no cancellation fee can be charged.

Frequently Asked Credit Questions