Credit Matters

Invaluable Reading From Australia and Around The World

Contributing to our position as Australia’s premium Financial Risk Management resource, our management globally explores and surveys relevant and valuable articles published by respected professionals, academics and organisation. The articles offered here are suggested reading for any Business Owner and Financial Risk Management professional.

Invaluable Reading From Australia and Around The World

Ingraining an environmentally sustainable mindset in-house

Jerome Doraisamy

27 Jul 2019

Jerome Doraisamy reports on a presentation by Katrina Bullock on how important that lawyers be aware of the issues regarding a sustainable approach to business in case their customers approach them for advice on the subject.

Ms Bullock's theme is that a business needs to understand how the evolving issues relating to operating a sustainable business are so important for directors and owners these days. Operating a business sustainably is so much more than just a marketing ploy. There are many other issues at stake when operating a competitive business in today's business environment. It also important when seeking legal advice, you always should seek a lawyer with the appropriate qualifications.

This theme of operating a sustainable business is nothing new as I came across an article from 2007 where this subject was raised in an article from BusinessWeek Online. It is an interesting article in itself because you are able to compare the history of the businesses quoted which said they were looking at operating sustainability. You can find the article at https://www.bloomberg.com/news/articles/2007-01-28/beyond-the-green-corporation however you may have to become a subscriber to view the article in full.

I suggest that if you still doubt the value of operating a sustainable business, reading Ms Bullock's article may be help you understand how important it is and to also have access to the right advice.

Late Fees: The Hows and Whys of Charging Them

Dean Kaplan

10 Jul 2019

Dean Kaplan raises a useful idea to help collect outstanding the funds owed on unpaid invoices which is to charge interest for late payments. Obviously, you will need the customer's authority to charge this interest and you must only use an allowable interest rate.

There are many rights you can include on your credit agreements, like this right to collect interest for late payments. The key point of this article is to have negotiation tools to help you recover the funds owed for late invoice payments.

It is not mentioned in this article, however if the customer refuses to sign your agreements which includes rights to protect your business, this is an indication the customer may be untrustworthy. You can also find more information about the importance of having a properly signed credit agreement in our Members area at www.creditmatters.com.au under our Red Flags feature.

In the meantime, Mr Kaplan's article provides useful information about one of the key rights which may protect your business. The right to charge interest for late payments is a useful tool when collecting monies owed for unpaid invoices.

 

Banks rejecting SMEs for finance

Loren Webb

25 Jun 2019

This article provides the basics of the facts that the banks are reluctant to lend to SMEs and points out that there are other sources of finance available. Nothing in business is ever that simple, however. For instance, where is the cheapest form of finance? B2B finance of course.

The trouble for B2B credit providers is that now as the number one target for credit poor business customers. As a result, they have to be ever more vigilant and disciplined. Of course, with every negative, there are also positives. It is up to the B2B credit provider to work out and structure their business to take advantage of these developments.

The first place to start however, is to do some research and then decide how to move forward with confidence. One such source of information which may provide some useful data and promote critical thinking, may be this article.

 

Australia: what can businesses expect?

Atradius Report

17 Jun 2019

Atradius have produced a brief report on the Australian business environment today regarding payments, bad debts and the state of credit management strategies.

The report is brief. I suggest however it is worth a read for all business owners, managers and associated professionals interacting with Australian businesses, particularly if your business is offering B2B credit.

Pick up the phone!

Ingrid Maynard

30 May 2019

The author Ingrid Maynard, highlights one of the key elements of good business, being able to use the telephone. Ingrid further articulates the reason why telephone calls are so effective.

Today, it is not just salespeople which seem to have trouble picking up a telephone and talking to another person. This issue is across the whole business spectrum from management down. Too often, it seems people at all levels of business are almost frightened about making a telephone call. We also note that too many business websites appear to lack a telephone contact number or if you do make the call, speaking with the correct person is also a challenge.

Yet picking up the telephone and saying, "There seems to be a problem with ... can you please help", making a warm contact for a sale or trying to close a sale, is so effective.

Irrespective of whether you are in management, sales, accounts receivable or customer service, the telephone remains one of the most useful tools in business. If you have trouble understanding why a telephone call is so valuable, I suggest reading this article may prove helpful.

10 Critical Lessons for Compliance Officers from the New DOJ Evaluation Guidelines

Kristy Grant-Hart

20 May 2019

Although the author's article is based on US experiences and dictates, there is a lot of value in this article when considering effective compliance programs for your business.

This article provides guideline that all businesses can use to implement an effective compliance program which is effective, and suitable for their business. The people in your who will most benefit from a compliance program, are business owners and managers, directors, risk management professionals and middle management.

If you are unsure how a compliance and compliance program might add value to your business, reading this article may be helpful.

Directors'​ duty to consider the interests of creditors

Michael Murray

30 Apr 2019

Mr Murray's article is based on a case in The English Court of Appeal which has examined the question of whether the duties of directors include considering the interests of creditors in the face of their company’s insolvency.

In Australia, we are also starting to see discussions on where directors might have a duty of care in relation in how their business deals with climate change issues.

It would seem then, the responsibilities for all directors are being examined in ways not previously anticipated. If you are unsure as to your responsibilities as a director, this article could be of value in helping you understand how protecting your interests needs to be reconsidered.

The Overlooked Risk You Should Be Addressing: Your Suppliers

Lance Rubin

10 Apr 2019

When we talk about completing due diligence, the focus is usually on our customers and whether they should be granted credit. In reality, as the author advises, we should also be completing due diligence on our suppliers.

After all, our businesses rely on the proper supply of goods to on-sell successfully and services to ensure our business can operate successfully. A risky supplier from any perspective, causes problems and additional costs which we may not have allow for or can absorb.

If you have not thought of, or carried out proper due diligence on your suppliers for some time, this article may be of value in understanding the issues.

'If you want to worry about something ... this is it': Central banks, investors sound alarm

Paul Colgan

27 Mar 2019

Paul Coglan drew our attention in October 2018 to issues of available finance and the types of finance providers which were then available. The issues raised by Mr Coglan have not gone away. In fact, they are more important than ever before.

As 2019 year has shown, world-wide there are signs that a down turn in business fortunes is increasingly obvious. When businesspeople are desperate for funds to keep their business going, they do not always pay enough attention to all factors involved in obtaining the finance. For instance, they rarely pay attention to the ethics of the finance providers, the price of the finance and the potential negative consequences if things go wrong.

In these circumstances, it is not only the financial viability of your customers which is at stake, the financial well-being of your own business is also at stake. If any of your customers have resorted to finance providers even further down the reputation and cost ladders, there are even greater risks.

In case you are unsure of these issues and you wish to learn more, this article may be worth a read to help you comprehend the risks to your business.

From haven to hero: The role of tax transparency in good corporate governance

Tony Kinnear

14 Mar 2019

As the author Mr Kinnear points "Fuelled by financial crises, shareholder disputes, geopolitical and social upheavals, the guidelines governing business models, practices, and behaviours have and will continue to evolve."

As he points out, today poor governance is deemed a negative factor which affects all stakeholders involved in your business, in addition to general public perceptions. There are also severe penalties for directors and senior management caught out by not showing any concern for their responsibilities and the proper governance of the business.

Tax issues have not always been one of the factors of general concern to the general public. In later years, increasingly paying tax has become another of those issues which helps to define your business standing in the community. Today, not only is the tax department paying increasing focus on how your business pays tax, the general public has also become involved.

In view of these issues in business today, and if you wish to review your own responsibilities, this article may be of value as a starting point in the process.

Ten Principles of Opportunity and Crime

Ticon Solutions

26 Feb 2019

Rutger’s School of Criminal Justice professors Marcus Felson and Ronald V. Clarke developed "Ten Principles of Opportunity and Crime" which describes how opportunities, or vulnerabilities, are the root cause of crime.

If you take the 10 principles and re-apply them to your business, it is another method to help you reconsider the risks to your business from another perspective.

In order to manage risks to our business, we need to understand these risks from different perspectives and keep reviewing the risks periodically. This article may be of value if you have not thought about the risks to your business lately. When you are managing risk, it also means you are working on your business and not just in it.

 

Keeping your clients’ assets safe

Ivan Glavas

18 Feb 2019

In today's business environment, too many directors and business owners fail to understand their duties and responsibilities. The world has changed considerably in recent years. The protections once offered to business owners and directors have changed over the few years.

Today, there is little escape for directors and business owners who flaunt their duties and responsibilities. Ignorance is no excuse if you are caught acting contrary to your obligations.

This article therefore may be worth reading to refresh your understanding of your duties and responsibilities as a business owner or director. It is also a timely reminder that you may wish to take action to protect your commercial and personal interests.

Better A Year Early Than A Day Too Late

Adam Taggart

5 Feb 2019

As the author, David Taggart suggests, trying to predict the timing of disruptive events is a fool's errand. Very few people can predict the exact time of a future disruptive event. We can predict what might happen by looking at the causes of historical events and what is happening around us. In such cases, even if our predications do not eventuate in full, those that acted early can gain an advantage.

Mr Taggart offers the following example of people who paid attention in the years leading up to 2008. These people had arrived at the conclusion that bad policies and overly-loose lending standards had resulted in bad situation which would eventually lead to real problems. Did these people know the date of the tipping point? No. But they knew the probability for a major financial crisis was a certainty.

He goes on to suggest, the people who positioned themselves early avoided the losses that everyone else suffered and a few, even made massive profits.

Today we face a similar situation with an expected business down turn in 2019 and 2020. There may even be a recession. Do we know when this downturn or recession will actually be declared? No, but that does not stop the more prudent of our fellow business and social acquaintances starting to take precautions to protect their business and other assets.

Waiting for the exact date of a disruptive event is never wise. Irrespective of whether you believe we are about to have only a downturn or a full-blown recession, it is better to consider a more cautious approach in the coming year. On that basis, reading Mr Taggert's article may be of benefit in helping you decide whether to start taking action before the effects of any downturn impact negatively on your own situation.

 

Every 3.5 Days a Solar Company Ceases Trading

Greg Ferrett

14 Jan 2019

Greg Ferret has written an article on the demise of solar companies in the current environment. He also has provided tips on how to try and pick the business which is recognised as a quality and reliable supplier and best suited for your needs.

This article demonstrates when a supplier is selling a product or service which is in demand or a "must have", a bit of due diligence and common sense does not go astray in picking the supplier.

In business, when a product or service becomes so popular it becomes "must have" care is required. Fraudsters, dodgy operators and poor business operators will also not be far away. A good example of what may occur can be been with the issues associated with bitcoin. As many people lost money due to the collapse in price, so did the losses accumulate to fraud and dodgy operators. 

Whether you are a consumer or business buyer, it makes sense to choose your supplier wisely. On that basis, I suggest that this article is worth reading as a reminder of the pitfalls of buying the "must have product or service". 

How to identify a bad client: 5 warning signs to look out for

Patrick Coghlan

13 Dec 2018

The author Patrick Coghlan has prepared a brief introduction on five warning signs that indicate you may be dealing with a potential bad debt.

One of the key issues in business is to understand the signs which indicate a potential or existing customer may leave your business with a bad debt.

If you are unfamiliar with the indicators of a bad debt, or just need a refresher on the indicators of the causes of a bad debt, this article may worth reading.

What Do You Want Your Code of Conduct to Do? Three Things to Think About

Jim Walton

5 Dec 2018

The author Jim Walton puts forward the proposition; to create an effective Code of Conduct you need to start with what you want the code to do.

He says when creating a Code of Conduct your aim is to affect behaviour by reinforcing good behaviour and discouraging bad behaviour. But HOW to do that? Mr Walton suggests there are three key words which answer that question – inspire, guide, and enable.

If you do not have a Code of Conduct for your organisation or wish to review your existing Code, this article may be of value.

The Best Payment Reminder: Top 10 Strategies

Jan Reeves

14 Nov 2018

Jan Reeves is a proven credit management professional. She has prepared a list of 10 strategies that have worked for her over the years when following up on unpaid invoices to improve cashflow.

Like Jan and myself, we never stop learning. We are therefore always on the lookout for new strategies on how to deal with our customers regarding unpaid invoices.

 If you are looking for new strategies to use with your customers and improve your business's cashflow, reading this article maybe of value.

Does Your Sales Team Work With You or Against You?

Nancy Seiverd

9 Nov 2018

Nancy Seivers is an experienced debt collector from the US who has written an article focused on helping business people understand the importance of sales and credit people working together. Irrespective of which country you operate in, building a business team that works together is essential. Building a business team, is like building a sporting team where everybody understands their role in helping the organisation achieve its maximum potential and "win the game."

Equally important, as Ms Seivers points out, is the role of management in developing cooperation between different groups within the business. Likewise, effective credit management and sales cooperation starts with support from senior management. Without such support and endorsement, a team-like relationship is unlikely to develop. 

This article may be of value for those managers and team leaders wishing to create cooperation between credit and sales employees to assist their business to maximise sales, cashlfow and profits. After all, that is the end game of operating and managing a business.

Why People Engage in White-Collar Crime

Robin Singh

30 Oct 2018

The author Robin Singh has provided useful insights on why people engage in white-collar crimes.

As you read through this article, you will note there are many complex issues which make white-collar crime a fascinating subject in its own right. This is notwithstanding its horrendous cost to the community, organisations and to individuals who might be both victims and perpetrators.

As the article covers a number of topics with appropriate stories, I suggest this may be a valuable read for those interested in the concept of white-collar crime and coming to grips with its complexity.

Organisational culture and leadership is at the heart of any defence against corruption

Cheryl Batagol

9 Oct 2018

Cheryl Batgol has written on the value of a positive culture in the public sector and how a positive culture helps in its fight against fraud. The author also believes a positive culture assists to reduce decisions which could reflect badly on the public sector organisation and lead to negative consequences for the organisation in the future.

In addition, the author has put forward the proposition that organisations with positive organisational cultures are more focussed on long term thinking and strategy. In these environments, not only is innovation valued, people and relationships are also seen as vital elements in the success of the organisation.

The issues raised in this article for a positive organisation culture, are focused on the public sector organisation. The fact is, a positive culture also applies for a business. As is well documented, one of the key aspects of why fraud is possible in a business, is because of poor organisational culture.

Therefore, this article may be of value to those business people who wish to work towards creating a positive culture in their business to reduce fraud and poor decision making.

 

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