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

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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.

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.

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". 

Does Your Sales Team Work With You or Against You?

Nancy Seiverd

9 Nov 2018

Nancy Seivers is an experienced debt collector from the US who has written an article focused on helping business people understand the importance of sales and credit people working together. Irrespective of which country you operate in, building a business team that works together is essential. Building a business team, is like building a sporting team where everybody understands their role in helping the organisation achieve its maximum potential and "win the game."

Equally important, as Ms Seivers points out, is the role of management in developing cooperation between different groups within the business. Likewise, effective credit management and sales cooperation starts with support from senior management. Without such support and endorsement, a team-like relationship is unlikely to develop. 

This article may be of value for those managers and team leaders wishing to create cooperation between credit and sales employees to assist their business to maximise sales, cashlfow and profits. After all, that is the end game of operating and managing a 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.

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.

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.

 

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.

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.

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.

One of my friends asked

Dave Fulk

6 Aug 2017

There will always be people who believe paying the cheapest price is best.  Marketing and salespeople know, many people cannot resist a "bargain" or the idea of getting something at a cheaper price. That is why their sales pitch is often focused on the "bargain price or once in a lifetime opportunity" concept.

However, believing the cheapest price always leads to good value, is a flawed concept over the long term.

In business, the cheapest price rarely provides the best value for money. Your spending decisions should always be based on the actual value received, not the perceived value. Why is this concept so important? A focus on the actual value of your spending is essential because (i) the business is the basis of your immediate and future financial success, (ii) your professional reputation, and (iii) the integrity of your business in the marketplace, are all at risk. 

If you believe cheapest price is the best policy for operating a business, have a read of Dave Fulk's article. When spending money on your business, seeking the best value for the dollars spent is critical as most businesses do not have unlimited funds. Furthermore, spend badly, and your costs increase to rectify the problems caused by focusing on a cheap price rather than the value actually received.

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.

 

Transparency of tax default data is a win for small business

Colin Porter

21 Apr 2017

Colin Porter of CreditorWatch has provided an article with a timely warning about a new initiative from the Australian Taxation Office and its potential ramifications.

In effect, the ATO will be contributing information to credit reporting bureaus about Australian Businesses with unsettled tax debts exceeding $10,000 that are overdue 90 days.

If you are unfamiliar with this Legislation and the potential benefits and negative consequences, you may find value in starting your understanding of the potential impact on your business from reading this article.

 

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.

6 Emergency Signs You Need to Change Your Life

Angelina Zimmerman

16 Nov 2016

Whether we are a business entrepreneur, owner, manager or employee, there are times when in our lives we are under so much stress that our ability to operate effectively is compromised.

In her article, Angelina Zimmerman presents information on six signs that indicate you may have issues which require further consideration. Whilst Ms Zimmerman's article is directed at entrepreneurs, these six signs also apply to other people in the business environment.

If you have been feeling somewhat confused about why you are not managing your affairs at the moment, this article may be a point of reference on your situation. Of course, professional help should always be sought before jumping to any specific conclusion or taking any drastic action.

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.

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