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

Due Diligence & Compliance

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.

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.

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.

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.

 

This 'old-fashioned' identity theft is just as dangerous as the cyber kind

Kelli B Grant

4 Sep 2018

We are regularly advised to take care of the information we post on the internet or when we deal with others via email as cyber-crime is one of the leading forms of criminal behaviour today. As a result, we can tend to forget the more traditional forms of information where sensitive information can be accessed.

The theme of this article is to remind us that our personal (and business) information can be accessed from many sources and we need to take care of this information.

We can obtain an idea of the information contained in this article from the article's summary points, which also includes the perspective of one victim. 

  • 53 percent of thefts of consumers' identity data are "non-digital," meaning they don't involve — or at least, don't start with — the thief exploiting some cyber vulnerability.
  • That includes physical theft like a stolen laptop or mail, and insider theft, where family members and employees at companies where you do business exploit their access.
  • "Somebody, somewhere, has all this information," says identity theft victim Amy Wang. "We don't know when they're going to pull the trigger and use it."

If you have not thought about the protection of your personal information and business information lately, this article may be of value in helping you review how this information may be protected from being used for fraudulent purposes.

 

 

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.

 

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.

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