AUSTRAC to Chair the International Supervisors forum
Published by Credit Matters Pty Ltd.
Welcome to Credit Matters Newsletter for December 2016. Our monthly newsletter contains information about financial risk management issues, blogs, advice of new business listings and free advice from organisations such as ASIC.
You can always view past copies of our newsletters via our website at www.creditmatters.com.au
As mentioned in our November newsletter, the topic for our first Professional Development Award will be announced on our website at www.creditmatters.com.au on the 16th of January 2017. Registered Members of Credit Matters will receive an email on the same day.
Once you have read the topic outline, if you have any further questions, please contact me at firstname.lastname@example.org and I will do my best to deal with any concerns you have with the Award.
Advertising via Credit Matters
If you are interested in reaching a wider group of business prospects, contact Kim to see what we can do for you. There are many different opportunities to advertise your business. The benefit of advertising with Credit Matters is we offer one of the few opportunities to reach a broad marketplace of customers with financial risk management issues.
Attached are flyers for (i) Credit Matters Professional Development Award, (ii) the AICM's training calendar for the first 6 months of 2017, (iii) a note from IBAC asking for contact if you sight evidence of corruption, and not just on the 9th of December, (iv) seminars in February offered by Enable Workplace consulting and (v) an introductory note by Jeff Hurst the new director of Trade Bureaux Australia.
Welcome to our last newsletter for 2016. What an interesting year it has been and I hope you have done well.
Credit Matters will be moving forward with new innovations in 2017. In 2016 we adapted to new ways of doing business, and will continue to adapt to changing circumstances in 2017. I implore you to consider the same. There is nothing stable or static about doing business in these modern times.
I anticipate 2017 will be a really good year with many possibilities to take advantage of and challenges to learn from to make you a better business professional or owner. May you all reach the end of 2017 with your business growing successfully.
On that note, I wish you all the best for a safe and happy Christmas and New Year with your family and friends.
2016 has turned out to be another fascinating year for the business community and risk managers. My core observations as a financial risk management professional follow.
Globally - the year of 2016 started in a mixed state of gloom or optimism depending on your situation and beliefs. Unfortunately, to some it appears the worst has happened and we are continuing to look at serious issues. For others, global volatility is exciting because it provides wonderful opportunities to earn a dollar.
As always, there will be winners and losers in a changing world, especially as a result of Brexit and the win of Trump. The world is now split between losers which supported Brexit and Clinton who have insisted Armageddon is around the corner. Meanwhile those which supported Bretix and Trump, insist there is hope and opportunities to succeed and move forward again.
I suggest once the noise ends, a degree of common sense and pragmatism will re-assert itself again. Politicians and business people will soon come to grips with the new reality and seek the best possible outcome as usual.
Then there is China, a conundrum in itself. Is it going to be business as usual or is it financially challenged as a number of commentators are suggesting? People are only guessing about possible outcomes because China has its own special way of doing business.
The mainstream global economists and business professionals who supported the status quo, suggested 2016 would see an improvement in economic conditions. The reality suggests at best, the world of business has stagnated. We also see about a third of the world is still at war and suffering the debilitating problems of political turmoil and or are fundamentally insolvent.
Equally disturbing are the continuing business scandals affecting the banks, large corporations and the people who manage these institutions. The continuing exposure of these scandals causes a further loss of confidence, leaving global citizens and business people wondering about the loss of business fairness and ethical behaviour.
Governments around the world continue to place restrictions on the global community with increased red tape, taxation surveillance, regulations and other measures. These interventions are designed to create a "fair" business environment and hopefully, reduce tax avoidance and unethical behaviour such as unfair business practices and bribery.
As history shows unfortunately, these Government interventions mostly disadvantages business people and organisations which attempt to operate legally and honestly. On the other hand, criminals and the less reputable continue to prosper as they have no intention of operating to Government wishes.
When Governments get the Legislative balance wrong, business people change their practices to suit the new circumstances. The perfect example of this situation is now many businesses no longer offer credit to consumers. Changes to various Acts relating to businesses selling on credit to consumers became so onerous, many businesses found it hard to make a profit.
With world business stagnating, I would suggest, reducing customers access to credit and business opportunities is not the desired outcome desired by Government. However, if Governments do not get their initiatives right, this may well happen.
Large amounts of debt still remain hidden but not out of mind. There is evidence showing debt in all forms has increased throughout 2016. Until this debt is cleared, countries and consumers alike, will find their capacity to spend restricted.
Australia - appeared to be in pretty good shape economically, despite the woes of the mining industry, concerns with the state of the Chinese economy, youth unemployment, drugs and gambling, and the number of people without a regular roof over the heads.
The events of 2016 suggest otherwise. The workers from the motor vehicle manufacturing industry and associated businesses, many of which are now unemployed, are of concern. Where will these employees end up is an issue because many will never work again.
As history shows, apart from the lucky few employees which will quickly obtain new jobs, many workers will wait months before they find another. For the majority of workers however, history shows there are three major outcomes.
(i) A proportion of workers will become involved with criminal activity to survive.
(ii) Other ex-workers are likely to indulge in personal and socially destructive behaviour such as drug taking and gambling because of their loss of identity and self-worth.
(iii) Of the remaining workers, many will never work again or find meaningful jobs.
We see the evidence of these outcomes in the previous studies on what happens when industries close down. Inevitably, when large numbers of employees become unemployed there is an increase in criminal behaviour associated with theft, drugs, gambling, tobacco and fraud in the workplace.
Relying on China, could be another problem for Australia because. With an emphasis and so much effort focused on doing business with China, other areas of the world have been neglected. As a result, China is now one of Australia's largest trading partners. If there are substantial problems within the Chinese economy or with the US, Australia could suffer badly.
Furthermore, research shows that Australian households are the most indebted in the world. The evidence suggests sales are so bad in the retail sector, they have brought forward their Christmas and Boxing Day sales. In addition, never before have there been so many closed shops or spare spaces in shopping centres and available car spaces in traditional shopping times.
Then we see that their issues in the housing sector due to raise of interest rates in the US. People are already anticipating an increase in home loan interest rates, especially as the banks are not even waiting for the RBA to increase local rates.
These are all classical signs that the Australian community is not currently in a good place despite what many proponents would suggest.
Banks and other major financial institutions - continue to show that nothing seems to have changed very much. Apart from the isolated advertising campaign, the major banks appear reluctant to support micro and small business enterprises unless bricks and mortar security is provided.
As a result, desperate business owners may be forced to seek more expensive borrowing products from the banks, or alternate funding from non-bank lenders. Often, this last resort lending causes more harm than good, as there are often unforeseen traps with increased expenses and costs not fully publicised.
Business payment options - seem to be a dime a dozen these days with yet another state of the art payment option becoming available.
No one seems to know how stable or viable these payment options and their owners may be over the long-term. The truth is, not all these new business enterprises will be as stable or offer the same transactional security of the major banks.
The alternative payment and credit card organisations are starting to be more aware their policies regarding the dishonouring of authorised purchases and issues of doubtful payments, need to be addressed. A continual disregard of these issues will affect the take up of their payment services if these issues are ignored or not dealt with properly.
Also of concern is the cost of establishing a credit and debit card processing facility with the associated transaction costs. Whilst many businesses seem willing to accept these costs, others are not. Surprisingly, many businesses seem to survive and grow, despite not having these facilities.
Comments continue for the elimination of cash and /or the removal of notes of large denominations. It appears the advocates of this campaign still have not learnt anything from the past history of commerce and of human behaviour. For instance, at least in Australia, criminals prefer $50 notes and not $100 notes. This fact is in direct contrast to claims of the advocates of eliminating of notes with large denominations.
No system is completely fail safe or really prevents criminal behaviour. At the end of the day, if you eliminate cash, people will just create another form of transactional currency to take its place. It is not as though there is no recent evidence of a new form of commerce being used e.g. Bitcoin. Unfortunately for Governments and mainstream business entities, Bitcoin is the preferred payment method of choice for criminals.
In addition, those people who save and act responsibility are penalised at every turn. At the end of the day, if all your money is stuck in bank accounts, then the potential to have to pay a fee every time you want your money. Alternatively, you can be arbitrarily barred from accessing your funds by a cash strapped Government.
Legislators and Regulators - continue to try and protect consumers and small business operators from the consequences of their lack of business and financial discipline.
In enacting of the new Unfair Contracts Legislation this year, we see another level of complexity for B2B credit providers. Experienced credit professionals recently advised this new Legislation is causing a number of concerns.
Furthermore, the PPSA is causing another set of problems as Insolvency Administrators use the PPSA in ways not intended by the general business community when the Legislation was first enacted. The results of the PPSA legislation when tested in Court, produces disturbing outcomes to the business community.
In the world of B2B credit, creditors have to spend many dollars to enforce their rights against non-paying debtors. Meanwhile, debtors thumb their noses at the creditor and at almost no cost until proven guilty. Equally frustrating, even if you obtain Court satisfaction, there are no guarantees that you can enforce your win to get paid.
As mentioned earlier, the lessons of history are so often ignored. Innovative fraudsters and the less reputable business people have been able to manipulate legislation and regulations to successfully avoid paying their debts for years.
The liabilities forced on businesses of all sizes to operate under these current Legislative changes are increasingly exponentially with each change. Consequently, we note that Creditor rights are being eroded to the point where granting B2B credit may no longer be a viable proposition.
Business owners and managers - unfortunately are showing increasing signs that the word "CHEAP" dominates their strategic thinking and strategies more so than the words of quality, efficiency and reputation.
As an example, the dogma continues on how technology will make the cost of doing business even cheaper, and there is the problem. Mention that word "CHEAPER", and people often forget that the words cheaper and quality just do not work together in a meaningful manner.
The outcome of this focus on cheapness is noticeable in the fundamental mistakes which occur during basic business dealings. By mistakes we mean, invoices raised incorrectly, customer service calls not answered efficiently, properly or at all, with incorrect supply of products and services, etc.
When cheap, cheaper, cheapest are the mantra, we see little managerial embarrassment of mistakes when they are discovered. On another level, even if the mistake is discovered, correcting that mistake or the cause of that mistake, is given no priority.
From the opposite perspective, front-line employees are now discovering how quickly and efficiently technology based systems reveal organisational weaknesses. If you were to ask your own front-line employees, many would attest that it is almost impossible work with some of the modern systems today.
If you thought dealing with a recalcitrant human was difficult, try dealing with a non-responsive technology system. Now that's frustrating and affects the moral of all your front-line operators.
This focus on cheapness is also evident with the employment of dumbed down employees instead of fully qualified professionals. At the managerial level, we are noticing an increase in poorly trained managers and business owners who seem to have little idea on the basics of good business.
One sign of this managerial weakness is in their employment practices. Often employees with minimum qualifications or experiences are sought rather than educated and highly experienced professionals. This employment strategy is interesting, when knowledge is deemed to be of critical importance to the modern business.
I would go one step further on what appears to be evolving due to these issues. If my front-line interactive experiences are anything to go by, fewer organisations understand their true liabilities. If this is the case, the current asset and liabilities figures in many balance sheets must be understated.
Creditworthiness - in business seems to be less valued than ever before and declining according to credit risk information providers. With business opportunities disappearing at an alarming rate, you would think sellers would want to ensure every sale would be profitable and paid within terms. Strangely, this does not always appear to be the case.
Today we see many business enterprises suffer problems with their suppliers and customers. We are not just talking about financial creditability here. We are also talking about transactional creditability. Too often we see where (i) customer dominance over process and common sense, (ii) diminishing returns because of problems, (iii) potential number of customers available or (iv) of business disruptors, affects our chances of earning a profit.
Organisational and Personal Integrity - will become increasingly important in the future. This will occur for two main reason.
The first is due to generational change. Many individuals from Generation X and Generation Y - which is made up of The Millennial and Gen Next, are no longer prepared to work for, or do business with those businesses which do not conform to their personal ideals.
Many organisations continue to ignore this generational change by still rewarding bad behaviour or attempting to hide the bad behaviour of yesterday. This is surprising when a proper apology or a mea culpa is recognised as the best way to minimise potential losses when bad behaviour is discovered.
It is also true unfortunately, bad behaviour is still treated rather leniently. The treatment of this bad behaviour may change in the future. The reality as business people will soon discover, the cost of trying to repair reputational damage is greater than the benefit of the bad behaviour.
Secondly, B2B commerce will change when it comes to extending credit. No longer will credit be extended in the cavalier or the laissez-faire fashion of today. Increasingly government legislation is interfering with creditor rights. As a consequence, that attitude will change when businesses find that extending credit without due diligence, is simply not commercially viable.
Social Media - continues to show us there is nowhere to hide. If you have a secret which may harm your reputation, you can only pray it never comes to light. There are no other obvious defences available.
From another perspective, if you post something you shouldn't or act contrary to what is deemed to be acceptable behaviour, the public will soon let you and your friends know.
As the impact of social media continues to grow in our personal and business lives, another issue is becoming evident; the posting of false news. In future, you would be wise to consider the authenticity of what is posted before rushing in to unfounded perceptions and actions.
As social media continues to become more invasive, it would seem your future focus should include trying to act responsibly in order to protect your business and personal reputation.
The ramifications of the events seen and reported in 2016, send a clear message to all business professional and business enterprises; nothing stays the same. What may have been acceptable in 2016 and prior, will not be acceptable in 2017.
I would suggest the key messages of 2016 were:
1 It appears business people are increasingly becoming focused on quick and cheap fixes to their problems.
2 The art of doing good business is increasingly lost due the employment of dumbed-downed employees and equally poorly educated business managers.
3 A sound business can only be built via strong financial and operational disciplines.
4 A combination of good technology and people are essential to maximise the potential of your business.
5 The amount of sovereign and household debt is at a level which will continue to impede local and global business development.
6 It would seem we can longer trust anybody or organisation to help us or to "... do the right thing!
7 it appears the low interest rates are continuing to be utilised for purposes other than to protect the consumer or the business for the long-term.
Turbulent times, the new norm, will continue into 2017. There are going to be winners and losers as a result. Those that prosper will do so because they understand their business does not operate in a vacuum. Today we live in and operate in both a local and global business community.
The wise business person will always continue to look at what is happening around them and will realise business is nothing different from life in general. You attempt to operate fairly, accept the value of discipline, work with the best stakeholders and never stop trying or learning.
Word of the Month - The aim of Word of the Month is to share those many words used in Australian English which cause confusion. The confusion arises because there's often two spelling variations.
Is the spelling comradery or camaraderie?
Two words with quite different spelling and yet they have the same meaning. The spelling comradery is the North American spelling and camaraderie, the Australian spelling. The spelling comradery isn't included in the Macquarie or Oxford dictionaries, even as a secondary spelling variation.
The spelling comradery can catch people out who use Microsoft Office products, as the American spelling is incorrectly included in the Australian spelling dictionary
For more information on the Preferred Australian English spelling visit www.Australian-Dictionary.com.au .
A recent decision of the Queensland Supreme Court Annie Street JV Pty Ltd v MCC Pty Ltd & Ors  QSC 268 has underlined the tension between an adjudicator’s mandate to consider the terms of the construction contract and the effect of section 24(4) of the Building and Construction Industry Payments Act 2004 (Qld) (the […]
If a development application is code assessable, the Sustainable Planning Act 2009 (SPA) imposes stringent timeframes on Councils making decisions, and uses a rather indelicate tool to compel compliance – the deemed approval. In short, if the Council fails to make a decision within the relevant timeframe, the development is deemed to have been approved […]
I had the pleasure of attending and also presenting at the Franchise Council of Australia’s National Franchise Convention 2016 in Canberra a few weeks ago. Excellent keynote speakers There were some excellent and inspiring keynote speakers such as Alex Malley, the CEO of CPA Australia and author of The Naked Ceo book and website www.thenakedceo.com, […]
In Australia it costs more and users get less when they pay for media streaming services such as Netflix. Why do these services cost Australian users more for restricted content? The answer is region specific content licensing. ‘But haven’t you heard of that program that tricks Netflix into thinking you are in the US?’ Yes, […]
Would you like to know more?
Trace Personnel would like to take this opportunity to thank all of its candidates and clients for all of their support and hard work in 2016.
A big thanks to Kim Radok from Credit Matters who has given us the chance to publish monthly on one of the industry’s most read newsletters.
As always, for all recruitment needs, please call Treacy Sheehan on 02 9281 5466 or email@example.com .
Wishing you all a Merry Christmas and a Happy New 2017 Year!
Credit Matters is a financial risk management resource centre for the Australian business community. If you are in business, Credit Matters is your ideal source of financial risk management solutions.
2017 is the year that promises great things for people involved at all levels of commerce. Sadly, there will be casualties along the road for those that believe they can continue to do business as in the past. On the other hand, good profits can be made by those who understand how to operate in the new world order.
Indeed, the new world order has been a work in progress for some time. The problem for many is they chose to ignore it and have left their businesses weakened as a consequence. More than ever, the fiscally responsible and the conservatively aggressive, will dominate in 2017.
Globally - 2017 year will start a bit like last year. Many had hoped that we would now be entering a new period with the worst of the GFC behind us and global business on the improve.
Alas, our hopes have not eventuated. The best we can only hope for according to economists and business commentators, is for a modest improvement in global trade this year.
Where there was hope, there is now a degree of caution because of Brexit, the Trump victory and with the perception the Chinese economic situation may not be as robust as we would like.
There are already issues between Trump and China. If Trump starts limiting Chinese exports to the US, this may cause problems for both the global business community and within China itself,
The US economy is said to be improving. The accuracy of this scenario is debatable with very few people actually better off because the spending power of real wages has been declining for some time. The real potential for the US, may be based more on with Mr Trump winning the Presidency. This win seems to have given hope to those people who saw the possibility of any improvement in the immediate future. On that basis, we may see an improved business environment in the US during 2017.
The Brexit result also seems to have given many people in the UK the hope that they can actually do better for themselves in the long-term. For instance, with the devaluation of the British currency, tourists are already spending more and British exports are increasing. Many in Europe on the other hand, seem to think the worst is just around the corner. Worse still for many advocates of the EU, perhaps there will be further countries trying to defect in an effort to take back a degree of control over their future.
The reality for the global community, is nobody really knows what will happen for sure. Will protectionism for example, actually lead to more people being employed and stimulate the world economy that way?
We also note about a third of the global community are still at war, basically insolvent or suffering political turmoil. It is difficult to see how these countries can contribute to world growth in a meaningful way until they get their own houses in order.
Governments in many countries are another factor impacting negatively on global and local business improvement with their additions to red tape, taxes and regulations. These initiatives do little to actually improve business confidence because those which try to operate ethically and within the laws, are burdened by additional expenses
Meanwhile, Governments continue to live in the vain hope business can be conducted in a fairer manner and tax avoidance can be minimised. As history continues to show however, the main beneficiaries of all this new red tape and regulation, are the fraudsters, business incompetents or those of dubious character. It seems bureaucrats still don't understand that these people don't really care about government regulations and legislation.
As creditor rights are stripped away by government regulations, plus the added costs to defend their rights, extending B2B credit may decline. At the end of the day, if extending credit does not lead to greater profitable sales, then what is the point of offering it?
The other great blight on growth is of course, the debt that remains hidden and out of sight. As we all know, if you are repaying debt, you do not have the funds to spend on other things. It is as simple as that!
Australia - is not going as well as it might be as we enter 2017.
Despite the positive noise of new businesses being created in the Australia, there are major problems. Consumers are losing spending power to the increased costs of living, their current indebtedness and the falling incomes of investors and pensioners as safe investments with a reasonable return disappear.
In the business community, evidence shows a lack of essential spending on positive and productive elements to make businesses more productive and resilient in the face of disasters or other damaging events. This is despite many businesses which appear to have the available cash resources.
In addition, there is a reduction in mainstream manufacturing and other businesses which employ large numbers of people. You can also add the increased numbers of the under-employed people without good dollar earning jobs and the semi-literate younger people without much hope at all of getting any sort of job.
In this environment, the Government and economic commentators appear to have only one positive message. Things aren't that bad in Australia because of the housing market, and consumer spending continues to keep the economy going.
It seems Australia has gone from living off the sheep's back to one of living off the debt of the increasingly impoverish consumer. After all, it appears the need for employing large numbers of workers in manufacturing is no longer a viable business proposition or even necessary for Australia's long-term success.
On the international level, what happens if the US stops taking or reduces its intake of imports from China? If the Chinese economy slows down, Australia could well feel the effects of that, and not in a good way.
Of course, there is always talk on how the media likes to concentrate on bad news because that is what sells. Despite the bad news in front of us on a daily basis, we are asked to believe that things aren't as grim as the media really portrays with the Australian economy.
There is only one real answer as to who is right and who is wrong about the strength of the Australian economy. It is what people actually see and experience in their private and commercial lives and the actions they take accordingly. The days of "She will be right mate" may not be so evident if you really do look around with an open mind.
Banks and other major financial institutions - still appear reluctant to support micro and small business enterprises, despite their expensive advertising campaigns. The exception is of course, when the business has an option of bricks and mortar assets to offer as security.
As a result of the bank practices, business owners are seeking other finance providers via brokers or other forms of finance such as crowd-funding.
The three main issues facing the banks in these situations are; (i) losing business to their competitors or industry disruptors, (ii) losing ownership of their customers to finance brokers and (iii) becoming ever more less relevant to consumers and the business community.
On the other hand, borrowers face a risk of increased costs, unconscionable business practices, fraudsters and a loss of confidence in the safety of their assets. In addition, the current evidence suggests customers are increasingly wary of any advice offered by the banks on any aspect of personal or business finance.
Business payment options - seem almost endless these days, which is confusing when looking for the best option.
The problem with many payment options, is the contract fine print which provides owners of these service proprietors incredible power over the customer when there are problems. It would seem wise therefore to investigate these different payment options with others who have used the services previously. The failure to ask the right questions may result in an expensive payment option which is not right for your business.
The call to eliminate cash continues. As always, such calls frighten thinking people as they understand the ramifications. Meanwhile the young, the lazy and those who do not think through all the issues professionally and in real terms, don't seem to care.
History and real-time facts prove, eliminating cash does not hinder criminal activity. In addition, business people will always adapt and find different ways of doing business. The biggest losers in all these scenarios, are Government revenue, consumers and the regular business community.
The indisputable fact is; if all your funds are in a bank or in another institution's account, you do not own your own money. The financial institution and the government owns your money. The day you find that out, is the day which is too late to do anything about it.
Legislators and Regulators - continue to try and protect consumers from their lack of fiscal and business discipline when obtaining finance. These are wonderful sentiments. The truth is unfortunately, the fraudsters and other criminals are just provided with new strategies to rip off the regular business person and creditors.
Meanwhile these Legislation and Regulation changes create another expensive liability for those business organisations which prefer to operate within the law.
Business owners and managers - seem to be hounded at almost every opportunity on the use of technology in their business and how it saves costs. Much of this information unfortunately, is taken on board without critical analysis. As such we all continue to experience the problems of poorly implemented technology systems.
As the reach of technology increases in business relationships, the perceived value of human interactions is being minimised. As a consequence, we often see the additional costs which have not been anticipated and a minimisation of the anticipated benefits when systems are created which do not work properly.
As their employees are being dumbed down by the use of technology, it appears the management team is also becoming less business astute.
The consequences seen in many management teams today as a result are:
(i) their inability to understand and practice the art of business properly;
(ii) failing to see those that want to steal their assets are doing so increasingly more easily;
(iii) failing to recognise reputation is everything;
(iv) that every set-back is a learning opportunity to create a better business;
(v) not aware of the difference between smart strategies and fraudulent actions;
(vi) business is not without risk and there is the potential to lose everything of value if the business risks are marginalised or ignored;
(v) without cash, there is no business.
Another sign that management may not be acting responsibly is when funds are borrowed because of cheaper interest rates. These funds should not be used to satisfy the short-term needs of selfish stakeholders. Rather the cheaper funds should be used straegically to build a more viable business.
Creditworthiness - seems to be devalued today. The facts remain however, your creditworthiness is one of the key factors in (i) obtaining credit, (ii) being granted a credit extension if required, and (iii) doing deals.
The two dominate and current strategic business concepts in vogue today, however seem to place creditworthiness as a minimal factor when doing business. It seems it is more important to focus on (i) cheap and (ii) to make another sale.
Making life difficult for suppliers with poorly designed and supported technology systems, is another damaging factor. Your supplier's employees must be able to add their invoice details or information seeking a valid purchase order in to your billing system. If such actions cause problems, your reputation as being a creditable customer is placed at risk.
From the other side of business, raising uncollectable invoices or dealing with suppliers and customers of a dubious character or with inefficient work practices, is equally damaging over the long term. Such actions always create bad impressions which are not easily dispelled.
Local and international credit risk providers continue to indicate the level of bad debts and slow paying customers are on the increase in Australia and globally. Completing due diligence on you suppliers and customers would seem to be a common-sense necessity. Regretfully, we continue to note the evidence where proper due diligence is regularly ignored. and the creditor ends up with another bad debt.
Business today is hard enough. Dealing with organisations which lack creditability means working a lot harder to succeed. It also means it is a lot easier to go out of business.
Organisational and Personal Integrity - will always be one of the key reasons other stakeholders will work with you or provide the best terms of trade.
The loss of integrity is very costly. This year we continue to see those organisations and people which were caught out and have had their reputations trashed. Many of those exposed, were once considered to be the highly regarded in society, of their profession or of their industry group.
It is true, a number of these people and organisations will survive or incur minimal penalties despite having their reputation damaged. The rest, which are the great majority, will lose their reputation and/or a great deal of money and business.
Social Media - is as in the past, is a powerful friend or your worst nightmare. You ignore its power at your own risk.
The year of 2017 is really just an extension of the new order of business which probably started, if we are honest, with the GFC. Whether you like it or not, this is the new normal.
To survive in such circumstances, it would be nice if we all had deep pockets or quality investors which are prepared to stick with our business over the long-term. Most of us involved in commerce, do not have such luxuries.
In today's new order of business, it appears there are no fixed rules on how to do business. Nevertheless, for the majority in business, it would be wise to remember the importance of these old business rules.
(i) Develop quality long-term partnerships.
(ii) Manage your business properly through strong business disciplines.
(iii) Develop a positive organisational culture.
(iv) Work constantly to protect your personal and business integrity.
(v) Don't hesitate to take a properly thought out and managed risk to grow.
Of course, you will also remember, "Cash is King". Cash is not a lazy asset sitting in your bank account. Cash is just resting before helping you to pounce on the opportunities which always appears in turbulent times.
You are in business to make money. Business and making money is not without risk. To allow risk to dominate your decision making is not a good long-term business strategy. It is only by managing risk properly and taking a managed chance, that allows you to achieve your best business potential.
See you at the end of 2017 and all the best in between.
News From ASIC - Help with ASIC online services
Are you registering, renewing or cancelling a business name? Check out ASIC's new series of YouTube videos to help you use its business names register and other online services.
15 December 2016
AUSTRAC to Chair the International Supervisors forum
15 December 2016
Two new fact sheets on money laundering risks now available to help pubs and clubs protect their business.
AUSTRAC supported an investigation into a criminal syndicate suspected of importing firearms and illicit drugs into Australia from the United States.
5 new NZFIU case studies are now available.
AUSTRAC's regulator performance framework self-assessment for 2015-16 is now available.
A free smartphone app developed by the Australian Securities and Investments Commission (ASIC) will help business owners undertake important checks before they enter into business transactions with other organisations.
For more information ASIC APP INFORMATION
Credit Matters is continuing to grow and provide marketing and knowledge about financial risks to the Australian business community.
Furthermore, we invite marketing and knowledge ideas from our readers and contributors on how we can assist our respective firms grow. If you have any ideas, please contact me at Click to see email
If you are interested in finding new ways to reach your marketplace, why not try Credit Matters. Our prices for advertising are very reasonable and advertising packages are on offer to make any cost, even more affordable. So if you are interested in reaching your customers at the right price, please contact Kim at Click to see email for options.