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

HSBC and ING complete world’s first trade finance transaction using blockchain

Spandan Sharma

12 Jul 2018

Blockchain technology is so much more than about cryptocurrencies. The fact is, the full potential for blockchain technology to be of value in other industries and functions, is still unknown at this time. For instance, one such use of blockchain technology was in its use in a recent financial transaction.

Spandan Sharma's article provides information on how HSBC Holdings Plc and Dutch bank ING completed a financial transaction for food and agricultural group Cargill and was completed in only 24 hours instead of the usual 5-10 working days.

If you are interested in the development of blockchain technology for purposes beyond cryptocurrencies, this article may be worth reading.

Accountants say elder abuse spike as mortgage stress sets in

Miranda Brownlee

26 Jun 2018

Miranda Brownlee advises that service providers are starting to see a greater number of elder abuse cases.

Of course, the fleecing of elderly people by children, family, carers and friends has always occurred, and regrettably always will. The difference is today. many more people are aware of what elder abuse looks like and its effects on the welfare of the elderly.

The causes of elder abuse exposed appear to be mortgage stress, to cover business costs or where the perpetrators of elder abuse suggest there are better investment opportunities. If you look beyond these factors, other problems may become more obvious. For instance, the economy may not be in as good shape as some commentators maintain, financial pressures are building up for consumers and finance for business and consumers alike, is increasingly difficult to obtain.

These factors should also be noted by business people as their business is not isolated from what goes on around them. When times are tough, the business's customers and their customers may have limited finances, customers may be willing to increase slow payments and employees subject to financial difficulties fraud may be tempted to commit fraud and theft from their employers. It is suggested therefore the reading of this article may be of value as you plan your future business strategies.

Norm Grill: How to make accounts receivable pay off

Norman Grill

12 Jun 2018

If you sell goods and services on credit, you must ensure your customers pay your invoices within agreed terms. Unfortunately, not all customers pay promptly within agreed terms.

No longer can a business afford to have invoices which should have been paid, sitting in the Debtors Ledger waiting until the customer decides to pay. A proactive mind-set and proven strategies are required to ensure you get paid in a timely manner. As cash is the lifeblood of your business, it does not help to have your cash sitting in your customer's bank account.

Norm Grill's article provides information about developing the right mindset and strategies to assist with getting unpaid invoices paid more quickly. If you need help in developing the mindset and strategies to get your outstanding invoices paid, this article may be of value.

Compliance Programs vs. Compliance

Roy Snell

26 May 2018

Roy Snell discusses the actions of ethicists who advocate that compliance programs are not worth the effort when it comes to managing bad and unethical behaviour.

He suggests the critics of compliance programs are doing a great deal of damage with their criticism of organisations which are developing a culture of compliance and avoidance of bad behaviour. Roy Snell believes their argument about compliance programs is patently false. Whilst he does understand their thoughts about the importance of ethics, he does not believe their efforts to discredit compliance programs is helpful in the fight against bad behaviour.

It would seem Mr Snell believes that ethicists are putting their vested interests ahead of the common good by advancing the theory that compliance programs are not worth the effort and a focus solely on ethics would be more beneficial.

You may find value in reading this article from several perspectives, one of which is; compliance programs do have a valid place in the fight against bad and unethical behaviour.

ASIC v Godfrey: another cautionary tale about the financial literacy required of directors

Geoff Hoffman and Cecile Bester

17 May 2018

This article focuses on one aspect of being a Director, the need to be financially literate.

As ASIC has reinforced, Directors need to ensure they are financially literate and do not rely solely on management or external auditors to ensure that the company meets its financial reporting requirements.

Another feature of the reported case was, even if you did not intend to act dishonestly, this does not excuse you from being held responsible for any issues which conflict with the duties of a Director.

If you are an inexperienced Director or intending to become a Director of a company, you may find value in reading this article.

 

Contract Terms that Stop Payment Problems

Dean Kaplan

26 Apr 2018

Ask any credit management professional, debt collector or lawyer collecting a debt or trying to manage a dispute, what are the most important aspects of success?

Without doubt, their answer will include a properly prepared and signed credit or trading contract, plus supporting documentation.

Dean Kaplan, an experienced debt collector from the US has written a blog on these aspects.

Another important aspect is that properly prepared contracts and good paper trails also provide excellent evidence for purchase and sales fraud investigations.

If you are starting up a new business, reviewing your credit or trading contracts, or need to be convinced on the importance of good contracts and documentation trails, this blog may be of value.

World's largest asset manager says get ready to 'stomach complete losses' in cryptocurrencies

Evelyn Cheng

3 Apr 2018

Evelyn Chen's article presents information on whether cryptocurrencies could be purchased as an investment. Based on the evidence to date, it is suggested currently, cryptocurrencies are best suited to those investors who understand the risks and are prepared to lose their entire investment.

The information suggests on the evidence to date, it is probably not a good investment currently for the average investor.

The article covers a number of risks associated with cryptocurrencies and blockchain technology currently which limit the potential of cryptocurrencies ability to offer a degree of security. These risks may be overcome in time has regulators create a regulatory framework and the blockchain technology improves.

Although the information is based on US data and circumstances, the information is still valuable. The date and experience by most investors in other countries are bound to be similar.

If you have thought of investing in cryptocurrencies as an investment, this article may be of value in helping you understand the risks and when the circumstances may make it a suitable investment for you.

28 Days Without a Bunnings Sausage: The Impact of a Cashless Society on People and Business

Dave Deveny

13 Mar 2018

Dave Deveny tried an experiment on living without cash. One of the key aspects of this short term experience was it was conducted by a convert to the digital world.

There were many useful insights on what it means to go without cash in this article. If there was aspect which was not covered properly is the question which Dave does not propose or answer. "How would I survive in the long term without complete access to cash?"

As Dave rightly points out, although he managed satisfactorily for the 28 days, he pointed out there are a number of costs and disadvantages in cashless environment. One of the most striking aspects was to note how many simple pleasures he was denied in his "cashless world".

I suggest this article raises more questions about the negatives of a "cashless world" than perhaps was intended. On that basis, perhaps there is much more to gain from this article than simply accepting the story as told at face level. For instance, at the end of 28 days, Dave could go back his normal world with a mixture of cash and digital access. In the future, we may not be so lucky.

The 7 signs that your company is in serious trouble

Tim Miller

2 Mar 2018

We have seen a number of announcements lately about major businesses which have entered in to insolvency administration. Tim White's article is a timely reminder therefore, not every one of your customers or suppliers could be in a good operational state. If your customer or supplier is no longer operating effectively, there is likely to be negative consequences for the well-being of your own business.

Mr White provides seven indicators which help to identify whether your customer or supplier is in good operational health. On sighting any indicators of poor health, it would be wise to consider further due diligence or to re-evaluate your business dealings with that business.

If you have noticed that your trading relationship with any customer or supplier has recently become troublesome, this article could be of value in helping you understand why this has happened. Once you have identified the issues, you can proceed to take action and to protect your business.

To weather reputational storms, get caught doing the right thing

Julian Friedland

9 Feb 2018

Julian Friedland's article is a timely reminder that maintaining your personal and business reputation is always important. In fact, it is worth dollars in the bank. Maintaining your good reputation in today's hectic business environment requires strong discipline and vigilance on what you do and say.

This article also a good follow up on a previous article highlighted recently on Credit Matters on why arrogance is a corporate sin. The link to this article is https://www.creditmatters.com.au/invaluable-reading-risk-management/#112

The loss of reputation affects the individual or their business across a whole range of different aspects, including cashflow, access to finance, sales, customer respect and referrals etc.

I suggest there are a number of useful reminders in this article of how easy it is to lose your reputation. As such, it may be of value in helping you protect your reputation.

Why arrogance is a corporate sin

CPA Carerer Mentor

27 Jan 2018

There is a fine line between confidence and arrogance. This article is focused on arrogant people within the organisation and why an arrogant attitude causes so much damage. The truth is everybody needs a certain level of confidence and self-assertiveness to survive and succeed.

Likewise, the owners and managers a business also need a positive business culture of confidence and self-esteem to survive in business over the long term. However, just as it is for the individual, nothing is as destructive for the business as the development of an arrogant attitude towards its stakeholders.

The factors of why arrogance is so dangerous for either an individual or a business are briefly explained in this article. Accordingly, I suggest there may be a benefit in reading this article for those in business, which may not understand the difference between confidence and arrogance.

The hacking community is evolving but the security basics still apply for businesses

Jim Cook

9 Jan 2018

Jim Cook's article is a timely reminder of one of the main issues facing all business people and their management teams today, cybercrime. With the increasing use of technology in the business environment, it is an issue that will not go away.

Mr Cook's article provides a snapshot of how hackers learn their trade, how they look for targets and on what you can do the help protect your business.

This article could be of value to those people who wish to know more or are yet to adequately understand the issues involved with cybercrime. As always, you should consult a suitably qualified professional if further assistance is sought.

Time for ‘prudence’ to make a come-back?

Alistair Kay

24 Nov 2017

Consumer debt is on the rise globally and this situation has potentially negative implications for all businesses.

Alister Kay's article, originating in the UK, could well be written by an author from any country today as the basics are similar.

The focus of the article is about a change in lending practices of the banks and finance companies which offer consumer finance products. However, this article is also a sign that organisations offering B2B credit to their customers, would be wise to rethink their own lending practices. Yesterday's lending practices in both the consumer and B2B worlds, are often no longer applicable or practical.

This article may be of value therefore, if you are looking for the clues that would encourage you to review your own lending practices to meet the future business environment.

Easy Techniques to Prevent Being a Victim of Business Fraud

Dean Kaplan

16 Nov 2017

Dean Kaplan's article is a timely reminder that fraud is an ongoing issue for everybody in business. Irrespective of whether we are a business owner, manager, or employee, we must all be vigilant about the possibilities of being ripped off by fraudsters.

I say this article is timely, because although fraud is an ever-present problem throughout the year, it is a major problem at Christmas. Many fraud professionals consider this is the worst time of the year for fraud because people are distracted by an increase in business, the social events associated with Christmas or are tired and looking forward to the year-end holidays.

Dean's article is also accompanied by a second article advising of eight free or low-cost methods for detecting fraud.

Irrespective of whether you are an experienced business person or a business novice looking for insights on how to beat fraudsters, I suggest this article has something of value for everybody.

Growing threat to lenders: Synthetic identities

Hannah Lutz

26 Oct 2017

One of the fastest growing type of identity theft, synthetic identity fraud in the auto finance industry in the US, is on the rise according to Hannah Lutz. In reality, synthetic fraud is occurring in every industry and to some extent, in many professions.

Ms Lutz explains how synthetic identity fraud takes place in the US. However, fraudsters operate similarly in every jurisdiction.

If you wish to know more about synthetic identity in order to improve the identity checks in your industry, Hannah Lutz's article could be worth reading as a starting point.

The Consequences of Inadequate Due Diligence

Austeja Kibildyte

21 Oct 2017

Many business people are encouraged to consider exporting as a way of increasing their sales. This is a fine thought. Unfortunately, whilst being encouraged to consider the positives of exporting, rarely are business people properly cautioned about the associated risks.

Austeja Kibildyte's article introduces a number of risks which a potential exporter would be wise to consider.

If you are interested in exporting, now would be would be a good time to explore both the positive and negative aspects of exporting. It is very easy to spend a lot of time, energy and money and wish you knew what was involved if your exporting ventures turn nasty. This article may be of value to help you come to grips with a number of the issues when exporting and help you minimise any adverse consequences.

 

Many ways that employees steal

Martha Myron

8 Oct 2017

Martha Myron's article is a timely reminder about an issue many business people would rather not consider, the enemy or fraudster within their business. Unfortunately, it is a sad fact, not all your employees will add value to the business. Incidentally, we are talking about all employees within the business, including those in management.

As you read the article and start to think about the implications, it soon becomes obvious, that all businesses can be negatively affected if the wrong employee is employed. How do you try and employ the right type employees to avoid such stealing from happening in your business? That is a question which is for another time, but certainly worth exploring.

If you would rather not think about your employees stealing from your business, sadly this head in the sand concept could well cost you badly. Now is great time to consider this issue if you have been avoiding the issue and reading Martha Myron's article could well be worth reading as a starting point.

Wiping sensitive data from connected devices is imperative: considerations for your business

David Higgins

2 Oct 2017

We live and work in a world that is predominately promoting positive attitudes and thinking about the future. In doing so, we sometimes forget about the lessons of the past and the fact that being risk aware, has its place in business. There are many risks associated with using our technology devices, and with technology in general. All too often, in our enthusiasm to use and adept our business practices to the latest technology, the associated risks are minimised.

David Higgins article therefore, is a timely reminder that our technology and the associated devices must be used and maintained carefully. Irrespective of whether you are risk aware or not, I suggest this article maybe worth a read as a reminder of how technology tools need to be maintained in good working order to protect your business.

What An Experience

Paul McCarthy

26 Sep 2017

Too often, business people only think about marketing their business when selling goods and services. If you only market one part of your business and not the business as a whole, it is similar to somebody dressing professionally from the waist up and if they are on holiday from the waist down. It is not a good image.

The marketing of your credit, accounts receivable and payable management as professionally operated and an asset to your business is worth dollars in the bank. Too many business people however, fail to see the importance of these areas to also reflect a positive holistic image of their business.

Paul MCCarthy's article is worth reading from too perspectives. The first is to create a test to verify the image perceived by suppliers and customers of your business. Every business needs suppliers and customers to survive and grow. Second, if your test suggests your business could do better, this article is a useful guide on how to improve your business's image.

Borrowers be Aware & Beware

Neil Slonim

12 Sep 2017

Neil Slonim's article is based on the Australian banking environment. Many of the themes he writes about in this article however, are applicable to some degree in all countries.

The most important aspect of borrowing is to realise that banks are not your friends. In truth, no finance provider is your friend. These businesses are designed to make a profit for themselves. If they can help you achieve your goals, well and good.

Borrowing money for a home or to grow your business is not necessarily a bad thing if it helps you progress in life. The fact is; the only way forward for some people is to borrow. Borrowing for what you want immediately which is not essential or for an asset which decreases in value and are not prepared to save for, is often deemed to be bad borrowing.

Irrespective of why you borrow, a debt must be repaid. There is no such thing as free money. If you don't pay the debt, you may lose a lot more than just a few dollars. It is wise therefore, to ensure you are aware of all the negative consequences when going in to debt, not just the "feel good" aspects.

Neil has provided Six Tips To Safeguard Your Borrowing Arrangements. Remember, these are only tips, not guarantees. Borrowing always has been, and always will be a risky process if you are unable to complete the loan repayments in terms of the finance agreement. However, there is still value in reading these guidelines which can help if your circumstances should change after the loan is obtained.

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