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.
6 Nov 2019
In the "good old days" a director could protect their assets, and to some degree their reputation, by creating a company when going in to business. Today, this protection is being reduced by regulations, legislation and legal action.
It is the wise person these days who therefore takes the time to understand the role and responsibilities of being a director. The world is changing around us all the time, and you can no longer rely on what was acceptable in earlier times.
If you are an inexperienced director or thinking of becoming a director, this article may be of value in helping you understand some of the responsibilities which you will face as a director.
10 Sep 2019
The author Damien Battersby has listed four basic reasons why email scams are often successful. They are because of:
(1) our willingness to trust brands;
(2) they exploit our emotions;
(3) the focus on the exploitation of our trust;
(4) they are structured in a way to distract us of their intention.
Mr Battersby also suggests that if you remain vigilant however, you can usually spot the flaws in almost every email scam.
If you have not thought about reviewing your understanding of how and why emails scams are so successful, this article may be a useful reminder.
2 Sep 2019
It might seem that the core purpose of a business is to produce a profit. After all, a business which does not produce a profit cannot survive for long.
A profit is therefore a necessary requirement for all businesses. The questions now being asked relate to how is that profit earned, under what circumstances and who should benefit?
There are no simple answers to these questions in today's environment. There is the added complexity as it appears there is a pending slowdown or recession looming. The earning of profits will be even more critical for your businesses if it is to survive the next downturn or recession.
This article is one of many on the subject which discusses the purpose of a corporation. The information is geared towards larger corporations but applies equally to smaller sized businesses. On that basis, I suggest this article is of value for all business people and their management teams.
21 Aug 2019
Daniel Effron has written an interesting article which provides a number of strategies which can help reduce the opportunities for good people to do bad things in the business environment.
The introduction for this article sums up what many of us think when we see that good people have been caught out doing bad things.
"Why do good people do bad things? When we know someone to be a fine and moral person in other respects, we are flabbergasted when they get caught for dodging their taxes, fiddling their expenses, or abusing their positions of power."
There is much to learn from this article. I suggest it may be of value to read this article if you would like reduce the opportunity of good people doing bad things in your business.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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".
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.
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.
If you are a specialist supplier of financial risk management products and services, then you need to be listed in Credit Matters Better Business Club.Read More