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

Operations

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.

 

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.

Avoiding Friendly Fire: Working with Sales People

29 Aug 2018

The author of this article is unknown, however the message advocating credit and salespeople working together is as important today as it has always been.

There is considerable evidence, when the two departments work together, sales increase and additional benefits accrue to the business.

There will be always a level conflict at times between the two departments. It is encumbered on management to ensure that these conflicts do not develop in to adversarial exchanges. It is in such circumstances, which creates a toxic culture which causes negative consequences for the business as a whole.

To assist in avoiding the development of a toxic culture, nine (9) strategies are suggested which can assist in reducing adversarial contacts between the two departments.

If you wish to create a more collegial working environment in your business, this article maybe of value in helping you to achieve this objective in your business.

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.

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.

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.

Internal crime perpetrating through law firms

Emma Ryan

16 Aug 2017

Internal crime is one of the worst types of crimes because it involves the breaking of trust and a betrayal of the people who have provide the employee who commits these crimes, with a job.

Lawyers Weekly and InfoTrack surveyed 216 Australian legal professionals to better understand the perceived impact of internal crime as well as the processes law firms have put in place to protect their business.

Notwithstanding the report involved the legal fraternity, this article is a useful resource for all business owners and their management teams in helping to combat internal crime. If your business has employees, the chances that one of these employees may commit a crime against the business. This potential for such a situation cannot be dismissed lightly, no matter how difficult that thought maybe.

If you have not thought about the issues associated with internal crime or not reviewed your own organisation's procedures lately, this article is worth a read.

German firms lost millions of euros in 'CEO Fraud' scam: BSI

Andrea Shalal

24 Jul 2017

Dedicated and professional account employees are your business's cashflow guardians. The value these dedicated employees and equipped with the right tools and who are committed to the success of your business, cannot be over emphasised. After all, money lost to fraudulent behaviour can rarely be recovered,

Fraudsters and their use of technology are one of the greatest threats against your business today. One of the best tools for any business in combating fraudsters and their use of technology is with dedicated employees. Dedicated employees backed by strong operational disciplines and procedures are best forms of defence from fraudsters.

In this article, we see just how effectively fraudsters have been in targeting businesses in Germany. Make no mistake, this type of fraud is happening to businesses in every country.

If you have not stress-tested the viability and strength of your business's cash protection systems lately, this article may be of value in helping you understand why you need to test your business defences.

Why 60% of business activity is waste: The 2 types of work

Oisín Grogan

10 Jul 2017

Time is wasted by completing work which does not add value to the business. We could talk about this issue forever and unfortunately, all too often nothing would get done. There are some business people who can always find an excuse to avoid confronting these problems in their business.

There are many different ways, plans and professionals which you access to tackle the problem.

Oisín Grogan has put together his thoughts and a work flowchart to help business people identify and understand what work adds value and which does not. By accessing the article, you can print out a copy of the work flowchart to help you work through the issues affecting the efficiency and profits in your business.

If you are unsure on how to identify the work in your business that do not add value, this article may be of value to you.

 

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.

10 Risk Factors Impacting Cross Border B2B Payments - Post I

Leslie Stroh

26 Oct 2016

It seems nearly every government export department and trade professional are advocating exporting as a way for your business to increase sales and revenue. This may be the case for your business.

One of the core problems you will face if you decide to go down the export path, is risk. Too often the advocates of exporting, highlight the benefits and minimise the risks.

In this brief article by Leslie Stroh, there is a list of 10 risk factors to consider when exporting. You may have to access other sources of information to adequately equip you with an understanding of each factor. However, as a starting point, this article may be worth a read if you are interested in increasing your sales and revenue via exporting.

When Tough Performance Goals Lead to Cheating

Colm Healy and Karen Niven

19 Oct 2016

Colm Healy and Karen Niven discuss a recent research project they conducted which tested the goal setting process for organisations. The ethos behind the goal setting within any business, is of extreme importance. In addition, the part culture plays within the organisation is another essential factor in the success or otherwise of the goal setting process.

The subject and of impact goal setting has on employee behaviour, is especially in today's business environment. All too often we see yet another well-known business or government organisation being caught out due to the unethical behaviour of its employees.

Goal setting is a valid and valuable part of the business process, it completed properly. If you get the process right, you can motivate your employees to achieve their targets which benefits all stakeholders. Get the process wrong, and there are big penalties which come in to that will impact on your business negatively.

If you are unsure of the importance in goal setting within your business, this article could be of value in helping you understand the process.

Being a Successful Entrepreneur Is Not Only About Having the Best Ideas

Andy Molinsky

3 Oct 2016

Andy Molinsky acknowledges a great idea is the place to start to make it a feasible business. The main problem which many entrepreneurs have is taking their idea and making it into a commercially viable business.

Entrepreneurs are mainly thinkers and doers and so acting as a business person often causes them difficulties. It is that side of the business, thinking and acting as a business person which brings many entrepreneurs undone.

Mr Molinsky identifies three start-up problems for entrepreneurs once they have the idea for a business.

First, when building a business, the entrepreneur needs to face up to the fact, they may not be good at all aspects of the business. The key is to understand what you are good at and seek help in your areas of weakness.

Secondly is to commit to your plan and accept there may be areas of the business where you need to operate outside of your comfort zone. Many business people have a fear of talking to investors for instance.

Thirdly, a business person needs to find their own way in business. No one business model fits every business.

As a brief introduction in to some of the issues of creating a new business, this article may be worth reading.

Building Good Referral Karma: How to Generate More Business Through Your Happy Customers

Michael Griffiths

23 Sep 2016

Michael Griffith's article is focused on the value happy customers add to your business, particularly in the area of referrals and in providing positive comments on your business.

When you read Michael's strategies on how to keep your customers happy, you start to realise that these strategies are also important for your business in other ways.

Happy customers don't just refer others to your business. They are also more likely to pay on time, forgive occasional mistakes, and continue to make enquiries which you can utilise to improve your business processes. Equally important, they do not go online to berate your business for inefficiencies which damage your business's reputation.

If you have lost your way or had not realised the value of happy customers to your business, this article may be a good start to reinvigorating how you deal with your customers.

BHS losses could have been reduced by good credit management

Credit Man

31 Jul 2016

BHS was a UK retailer with a history going back 88 years. Recently the retailer was put in to Insolvency Administration with massive debts.

This article is not just a story about the value of good credit management practices, many valuable other business factors are illustrated. The business issues raised are (i) the impact on your business when a major customer goes out of business, (ii) the flow-on effects to other businesses, (iii) the cost of trying to find additional sales to replace the losses just suffered and (iv) the importance of not seeking just one or two major customers.

I suggest the value of this article lies in the many business messages of loss which can be suffered when a major customer goes out of business.

High-tech vigil aims to deliver safe bet

Patrick Bartley

18 Jul 2016

Irrespective of whether it is in our personal lives or in business, keeping secrets is increasingly difficult. In this article, Patrick Bartley sheds light on how racing stewards in Victoria are using technology to identify potential illegal behaviour.

The use of technology is increasingly of help for the guardians who are in charge of looking after the wellbeing of our society as they track down the perpetrators of illegal and damaging behaviour.

In business, with increasing use of technology and in particular, Cloud based accounting and business systems, keeping business secrets will be increasingly difficult.

The value in reading this article is that is yet another example on how the power of technology can be used to identify unethical and criminal behaviour which may otherwise remain hidden.

Powerful Psychological Forces That Make Good People Do Bad Things

Dr. Travis Bradberry

28 Jun 2016

What makes good people do bad things? We keep asking ourselves the same question when we see how good people are caught up in bad situations and with the wrong people. There are many different reasons why people do the wrong thing, and often, there are no simple answers.

One of the factors on why good people do the wrong thing can be found in understanding the psychological factors involved.  Dr. Bradberry illustrates 14 of Dr. Kaptein’s most compelling findings on how the mind tricks good people into losing their moral compass and going astray.

In either situation, this article may be one source of assistance in helping you work out what influences good people to do bad things.

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