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

Insolvency & Bankruptcy

Proposal to hold directors liable for GST set to pierce corporate veil

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.

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.

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.

'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.

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.

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". 

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.

Directors Beware - Company Assets are not your own

Harvey Bowlt

5 May 2015

Directors are not entitled to use the assets of the business as if these assets are their own assets and available for personal use. Directors must remember, they are always to act in the best interests of the company.

This situation was reinforced recently in a Western Australian case of Weaver v Harburn [2014] WASCA 227.

Too often Directors get in to trouble by forgetting the assets of the company are not for their personal use. The causes for Directors overstepping the mark and using the company's assets incorrectly, usually occurs for one of three reasons.

1  The Directors have inflated egos and treat the company's assets as if they own the assets rather than act as the custodian of the assets.

2  The Director(s) are in financial difficulties and believe there is nothing wrong in "borrowing or using" the company's assets to pay their debts.

3  Director(s) often forget their primary duty of care is to the company not to their own well-being.

If you are in any doubt about your duties as a Director, please seek professional assistance. As easy as it is to step over the mark and act illegally, so it is equally easy to be found guilty of acting against the best interests of your company. The risk is just not worth it in the long-run. 

Remember, ASIC is always there looking over your shoulder to ensure you are acting properly as a Director and doing the right thing by the company.

Statutory Demands

Adam Stewart

8 Feb 2015

One of the weapons available for use against a delinquent debtor is the use of a Statutory Demand. Used properly, it is an effective tool in obtaining payment from your non-paying customer.

However the use of the Statutory Demand must be applied correctly as it is not without certain pitfalls if not served properly.

If you would like to know more, this blog by ADC Legal offers an introduction on the Statutory Demands. Of course, legal advice must be sought to ascertain whether a Statutory Demand is applicable for your situation.

Promote Your Business

Credit Matters Business Club - Professionals When You Need Them

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
Promote your business with Credit Matters
IMA Bronze Member Supporter