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

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.

 

Compliance Programs and the Butterfly Effect

Alexandre C. Serpa

3 May 2017

Compliance programs are becoming increasingly important these days when issues such as bribery, cartels, the seeking of favours by gift giving and ethical behaviour are at the forefront of good business behaviour. All businesses are affected, and the size of the business being immaterial. It is the behaviour of business woners, managers and employees which is the critical factor.

Creating a program suitable for your business and employees may not be as simple as you imagine. After all, creating a compliance program is one thing. Ensuring your employees understand how the program works in practice, and then adhere to the program, is another issue.

Alexandre Serpa has prepared this article in an effort to explain some of the issues when setting up a compliance program and in overcoming employee concerns.

You may wish to create an effective compliance program, or want to ensure the program you have operates effectively. In either case, this article may be of value in helping you understand the issues involved.

Comply or Explain (to the Judge)

Richard F. Chambers

1 Mar 2017

Richard Chambers discusses a number of factors which should be carefully considered by all directors and senior managers when establishing a compliance program for their business.

Long gone are the days when directors and senior managers could fob off concerns when compliance programs were found wanting. Today, the penalties against directors and senior managers of a business with a failed compliance program are professionally embarrassing, personal and often severe.

As a director or senior manager, if you are unsure of your responsibilities on whether your business's compliance program protects you, reading this article may be of benefit. As always, the material in this article is only a starting point in the evaluation and production of your business's compliance program. If in doubt, it is always wise to use properly qualified professionals when building or evaluating your compliance program.

Millennials and Compliance: Their Perspective

Mark Dorosz

19 Jan 2017

This article focuses on how Millennials may view compliance differently to what we might expect, especially in regards to the use of social media.

It is true they been raised in times different to the older generation and as a result, been exposed to other lifestyles and experiences. As such, they bring another perspective on how and why they use social media.

The issues of compliance in these circumstances, can be challenging. Your business may have to find interventions that can instruct the younger people on what is and what is not acceptable in a manner they can understand.

This article may be useful in helping you begin the journey on how to incorporate their experiences into your compliance training. At the end of the day, you do need your compliance education to be effective.

The Secrets To Building A Strong Business Credit Profile

Ty Kiisel

22 Jan 2016

Ty Kiisel from the US explains the importance of keeping a good business credit rating as well as a personal rating. In Australia, the same situation exists for people who also are in business. Even in this day and age, many people do not understand that when in business, your creditors and potential creditors will seek to have the authority to access your consumer and personal business file, as well as that of your business.

When operating a business that relies on the good will and credit of other organisations, maintaining all your credit related files in good order is of critical importance. With a bad record in one file, this record could easily preclude you from credit facilities on the best terms and interest rate for your consumer and business needs.

Ty's article includes a number of valid reasons on why a good business credit rating is so important. If you were unsure on how to maintain a credit rating in all your accounts, this article may be worth reading.

Red Flags Of Potential Collection Problems

Dean Kaplan

11 Jan 2016

Dean Kaplan is an experienced business professional and debt collector from the US. In this article, Dean provides a number of red flag indicators which may indicate future cashflow problems for your customer.

These same indicators are observed and applicable within the business environment of any country. For instance, I suggest other experienced credit professionals, debt collectors and insolvency practitioners from all countries would have seen similar red flag indicators during their careers.

Dean points out there are other indicators which may be useful in specific situations which he has not detailed. Educating yourself to be on the alert for any unique red flag indicators which are applicable for your industry, is just as important.

A useful aspect of this article are the explanations which are included to illustrate the problems behind the red flag indicators.

In the turbulent business world of today, being aware of the indicators of customer cashflow problems is an essential component of business survival and to reduce unnecessary costs and bad debts.

If you are unaware or would like to refresh your knowledge of the red flag indicators of cashflow problems, this article may be of value to you.

Four Important Questions To Ask When Choosing A Recruitment Consultant

Vic Careedy

10 Nov 2015

The task of taking on a new employee is no longer as simple as it once was. Today and into the future, undertaking due diligence on all prospective employees, will be the new norm. One of the parties best placed to assist you in this process will be recruitment agencies or consultants. Again however, you must choose your recruitment agency or consultant with care.

Vic Careedy puts forward a number of issues to be considered when choosing an employment agency or consultant based on his experiences and perspectives.

"Having been a client, a candidate and, for several years now, a consultant in the recruitment industry, I've learned there are some starting issues you need to be clear on."

The four areas worthy of investigation and questions in Vic's opinion are:

1  Who will doing my work?

2  What background experience does my consultant bring?

3  What is the process?

4  What will I pay?

If you have never used a recruitment agency or consultant before, or a dissatisfied with your current service provider, reading Vic Careedy's article may be of assistance. As is always the case, care is required when employing anybody these days and having a professional service provider who understands the issues may well be your best assistant in this process.

 

2015: The rise of impersonators

Debbie Fletcher

4 Sep 2015

Debbie Fletcher presents a number of key issues relating to the bots which are visiting your website. Not all of these bots will be visiting with the right intentions. Unfortunately we live in age when the internet is both our window to the world and a wonderful research facility. However the internet also allows unwelcome visitors to visit our site.

These unwelcome visitors are designed to seek advantages for their own business enterprises. The advantages which are sought include, finding out the weaknesses in your security systems, website designs, seeking to over-ride human operating disciplines and stealing your IP and other work.

Any business which is deemed to be profitable, or rich in ideas and IP, will be targeted. It is not about if, it is about when. It would seem therefore to be sensible to build a website which has been designed by professional website designers who understand and use appropriate security measures. Any alternative over the long-term is a recipe for disaster.

In today's world, if you have a website, it would be wise to understand these issues. If you are interested in knowing more about the visitors to your website, this article may be a good place to start.

 

Why ROI is a Bogus Number

Vincent W. Mayfield

9 Jul 2015

As Vincent Mayfield writes:

"No other term is more overused in the business world than Return on Investment (ROI), except perhaps “The Bottom Line.”  Armies of well-meaning managers throw out superfluous business jargon like ROI to demonstrate they are good stewards of corporate finances. ROI was originally used to evaluate financial transactions by calculating the return of profit versus the capital investment. Over time, ROI has become the de facto measure used to evaluate one-time capital projects."

Whist Mr Mayfield is writing about the use of ROI within software operations, the issues raised in his article, apply across many other different business operations.

The use of ROI as a measurement term is used as much to confuse people as it is used properly and within the context originally conceived. Too often ROI is used to shut down conversations by those people with a hidden agenda, those who do not understand your concepts or because your concepts threaten their own position within the proposal.

When the term ROI is used, many business people do not fully understanding its concepts or do not believe the outcomes presented by the ROI exercise. Irrespective of your current understanding of ROI, I suggest this article is worth reading if you are interesting in learning more about the ROI concept.

10 questions you need to ask your accountant

Jason Smith

15 May 2015

Jason Smith is right you know. As business owners, we are often so busy working in our business, we forget to take the time to work with our Accountant on the business. As is usual, we rush to prepare the figures required for essential returns, drop them off with the Accountant and rush back to work. Rarely do we take the time to actually review the figures to ascertain whether we can make improvements to our business.

There are a number of parties you could consult on various aspects of the business to improve your business. For instance you might consult with your credit management adviser or debt collector, the marketing firm which you work with, etc. Your accountant is another person you should liaise with regularly to ascertain whether your business can be made more efficient and profitable.

If you have not taken the time to discuss your business affairs with your Accountant for some time, Jason's article has 10 topics you can use to prepare background information before starting that conversation.

Cloud Accounting Yes or No?

Peta Schimming

9 Jan 2015

Technology offers wonderful applications and tools for use in our business. One of the more interesting concepts is the use of cloud based products.

Peta discusses the possible benefits and negatives of using cloud based accounting systems. However many of the issues raised by Peta apply across all cloud based products and services.

If you are still wondering about using cloud based products, Peta's blog is worth reading as a start.

Don't Turn A Contract In To A Handcuff: The Boardroom Report

Adrian Kitchin

9 Jan 2015

If your business completes projects on a regular basis, you will probably already be aware of the importance of taking out an insurance policy on the major projects.

On the other hand, if you are a business owner or manager with little experience of the possible pitfalls of projects, you may not have thought of taking out an insurance policy for your next project. After all, not all projects are equal and many include significant risks for the unwary.

This blog raises a number of issues associated with projects which are worth considering. For instance, the importance of seeking professional assistance in understanding the terms of conditions of the contract associated with the project.

If you are inexperienced with the risks which may occur when planning your next project, this blog is worth a read as a starting place to begin the process of understanding project risk. You would also be wise to consider the benefits of obtaining insurance if there is any possibility of a material loss if the project does not go to plan.

Know your competition: Learn from their mistakes

Colin Porter

28 Nov 2014

Knowing your competition is one of the keys of operating a successful business.

Colin Porter in this article explains how you can learn about operating a better business from your competitors. In his view, you can learn a great deal about works and does not work in your marketplace.

Colin also provides his 5 tips for staying competitive.

I suggest this article is worth a read as a starting point for understanding why studying your competitors can help you operate and grow your own better business.

Good client bad client, how to tell

Jacqui James

21 Oct 2014

The point of entering a trading relationship with a customer is to make a profit. Unfortunately, too many business people are seduced by the concept of raising an invoice. Therefore when a new customer comes along they too often think of raising an invoice, not the nature of the future relationship and whether a profit will result.

However as Jacqui James points out, not all customers lead to a profitable trading relationship. Jacqui's list of what makes a good customer combined with her second list of what makes a bad customer, are therefore worth reviewing. You will be surprised how valid these lists are when you study the behaviour of your own customers.

I heard a quote many years ago which said "every mistake is a fruitful learning opportunity". Therefore I do like Jacqui's comment of  "Even a bad client turns out to be a good client. They teach you what it is you don't need."

The fact is, despite our best efforts, we all still get caught with an occasional bad client. When this happens, it is a good reminder; not all customers will add value to our business. However, these bad clients also teach us something more about our business process, if we take a positive perspective.

If you are interested in doing good business with the right type of customer, I suggest Jacqui's article is worth a read.

Here is What the Bank of England Thinks of Bitcoin

Alen Mattich

1 Oct 2014

Bitcoin has been with us for some time now. There are people who are really enthusiastic about its use, whilst others are less than impressed. Lately, there have been a number of articles about Bitcoin, almost as though it is the current flavour of the month.

I will not make a comment on whether Bitcoin is an appropriate payment methodology or not. However I suggest, this article is one source of information for you to update yourself on the current status Bitcoin.

Once have read the article you can make your mind up whether to do further research and ascertain whether it is a suitable payment methodology for your business.

Is Your Credit Policy Costing You Money?

Dean Kaplan

24 Aug 2014

Many years ago, when I first became involved with lending and advancing credit, I was advised that a reasonable level of bad debt write offs, was sign that you had maximise selling and profit opportunities. This case was put to me during my years involved with both consumer and business to business lending.

An open slather policy on advancing credit, is usually a good way of going broke and is not advocated. However a balanced approach about why you are in business, what it takes to succeed and how you should extend credit are questions should lead you to understanding why a level of bad debts is not always a sign of a business in trouble.

Therefore Dean Kaplan's article raises a valuable business question; "Is your credit policy costing you money?"

On that basis, Dean's article is worth reading as start for re-evaluating your credit policy and or learning about advancing credit.

 

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