This month has been full on with networking, a presentation to business owners in Geelong and attending a cryptocurrency course.
Another feature is due out within a week or so which will be available for free on our website at www.creditmatters.com.au The feature's title, B2B Credit in 2020 is my version of what the future might look like by then. Today, as I observe the business community at work, I can see there are already new way considerations at play when extending B2B credit.
The brochures included with this month's newsletter are; a note from Australian Small Business and Family Enterprise Ombudsman about a fair go in court for small business, details of our Guide for Tradies, a copy of an article I wrote for the AICM "Can you afford not to employ a professional Credit Manager", Jan Reeves book for small business "Get Paid" and a brochure promoting the use of the value of the telephone by Jenny Cartwright and myself.
Don't forget, if you wish to promote your business services at an affordable rate, contact Kim at email@example.com. You will be surprised at what we have to offer.
You only find out who is swimming naked when the tide goes out.
Warren Buffet’s quote is particularly relevant in today’s business environment. The truth behind Mr Buffet’s quote is seen when a business collapses and enters into insolvency. The reasons why a business may go out of business are varied. Not all business closures are caused because of managerial incompetence or lack of money. Some were just in the wrong place and time when bad luck struck.
When a business does collapse and an insolvency administrator is appointed however, as we have seen of late, we find that many have run up large debts and lack the funds to trade themselves out of trouble. Other businesses have failed to collect debt owed to them because of poor sales procedures, a lack of due diligence, outsourcing of accounts, a lack of follow up, or selling to the wrong customer.
In the cases mentioned above, the problem has been a lack of administrative substance, care and managerial incompetence. In other words, as Mr Buffet alluded to, the business may have looked substantial, but it lacked substance. When the pressure was on, they folded.
Many of the businesses entering insolvency were the brightest and the biggest of their kind. They also came from every industry, and the age, or size of the business made no difference.
Furthermore, these are those businesses we do hear about. There would have been many smaller businesses entering insolvency, or just closing down and going out of business. We did not hear about them until it affected us or we made business enquiries.
As we enter a pre-recession period, there is a lot of merit in understanding the value of Mr Buffet’s quote. Many of your current and potential customers are going to be experiencing difficulties when the effects of the next recession become obvious. There are going to be many of those flash, well known, long standing and “too big to fail” businesses, which will cause you grief because they lacked the substance and means to keep going.
Is it better to sell on credit, or for cash up front and part-payments? Or is there are third way?
It really depends on your business acumen, the times and what other opportunities are available. Today however, there are many different sales channels available for a business to sell their goods and services. It is wise to remember, selling on credit is always fraught with danger, irrespective of the size of your customer’s business.
If you offer B2B credit, customers will expect credit terms because today, they believe it is a right, not a responsibility. As B2B credit providers are finding these days, increasingly the fraudsters, the unprincipled, and the naïve, have more rights than they do.
If you sell for cash and part payments, you can generally offer a product or service at a far cheaper price than those offering credit. You have this advantage because you do not need an accounts receivable or credit department, or complete due diligence, or have to pay for all those other costs required when selling on credit.
Perhaps with the right type of technology, employees, and a bit of common sense, you can sell via cash for a few months and offer credit as a reward later on when a customer has proven worthy of a credit facility.
The secret of success as always, is to believe in what you do, operate to suit the current business environment and be innovative. There is no place in the modern world where a business with a lazy approach to sales can survive in the long term. No matter which selling format or formats you use, you will always work hard for your money.
Technology and humans can be equally dangerous to your business.
It is probably an inconvenient truth for some people, however both technology and humans can cause equal damage to your business. No matter which business process you favour, technology or people based, each have inherent dangers for your business.
How can this be when one is machine or AI based and the other is a human? Well, the answer is quite simple. The employment of both processes are based on human decisions.
When used with the most purist of reasons for the advancement of humankind such as medical breakthroughs, space exploration, pure research etc., technology delivers wonderful results.
In the business setting, technology also provides us with wonderful opportunities to operate our business more efficiently and cheaper than with humans. Unfortunately, the ethos behind using technology in business, is not always completed with the best interests of all parties. Rather, all too often it is used to satisfy the agenda of people. It is in these situations where technology becomes dangerous for your business.
Likewise, when employing people, if done so with beneficial interests of all in mind, people add value to your business. When they are employed without their best interests in mind, employees can do all sorts of damage.
We see this situation best when technology and people interact with emails. Emails are a wonderful way of creating speedy and cheap communications between different parties. When emails are sent with no intention of causing harm and with untainted content, they add value.
When emails are sent with corruption or malicious intentions in mind, a dedicated and professional employee is unlikely to engage and simply delete the email. On the other hand, the bored, naïve, or the employee with equally malicious intentions, will click on the email and possibly corrupt the business’s technology systems.
At the end of the day, both technology and humans can assist or damage your business. It is always people which decide whether the outcome will be beneficial or destructive.
Is the spelling nana or nanna?
When talking about one’s grandmother we often use the terms nan, nana and nanna. In Australia, what then is the preferred spelling? Is nana spelled with one n, or is nanna spelled with two n’s.
First, we do have to remember nana and nanna are considered colloquial spellings and as such, are used informally. Also since people use Nana and Nanna as names, names can often vary in spelling. Having said that, the best approach is to refer to the authoritative references.
The Macquarie Dictionary lists nana as a secondary spelling of nanna and the entry nana refers on to nanna. Thus according to the Macquarie Dictionary the preferred spelling would be nanna. The Australia Oxford dictionary entry nanna states a variation of nan, with nan listing nana and nanna as variations for nan. The Australia Oxford thus doesn’t directly give us answer for nana and nanna.
The online Oxford dictionary doesn’t directly list nanna, but interestingly, states nanna as the British form for nana under the nana entry.
Based on the Macquarie Dictionary it would appear the preferred spelling in Australia is nanna. The spelling preference in Australia appears to be: grandmother, nan, nanna and then nana.
30 January 2019
The Emergence of AI
The growing capabilities of Artificial Intelligence (AI) are changing the world as we know it. Ideas once confined to the imagination are now becoming a reality, with AI technology creating outputs either largely or entirely independent from human intervention.
In 2018, an album called I AM AI was the first of its kind to be entirely composed and produced by AI technology, through a music composition software called Amper. Deep learning networks allow Amper to analyse data to learn chords, notes, genres, tempo and song length to independently compose melodies.
By: Dianne Beer and Diane Sargeant
11 February 2019
Recovering from a major data breach can be difficult, stressful and time consuming for any organisation. It is essential to be well prepared. Organisations need to ensure they have all of the right processes and procedures in place so they can act quickly to minimise the harm, as well as comply with their new legal obligations under the Privacy Act’s mandatory Notifiable Data Breaches scheme (NDB).
From 22 February 2018, if a data breach occurs in your organisation or agency that is likely to result in serious harm to any individual, then you will promptly need to inform the Office of the Australian Information Commissioner (OAIC), as well as the individuals potentially affected.
Despite imminent commencement of the scheme, a recent study by cyber security provider CyberArk has however found that 44% of Australian businesses are not yet fully prepared to meet their obligations under this new scheme.
Following our initial review of the scheme, this article considers:
•What is it that you still need to do to avoid substantial penalties for non-compliance?
•How do you assess the risk of “serious harm”?
By: Tony Conaghan
Updates courtesy of www.asic.gov.au
01 February 2019
ASIC today announces the launch of the Global Financial Innovation Network (GFIN). As part of its launch, GFIN is inviting applications from firms to be part of a pilot to test innovative financial products, services or business models across more than one jurisdiction.
GFIN is a group of 28 international organisations including ASIC, committed to supporting financial innovation in the interests of consumers. The network was proposed in August 2018, building on earlier discussions that year on a proposal to support cross-border testing of innovative businesses
04 February 2019
Former Adelaide financial adviser, James Gibbs, has pleaded guilty to 28 dishonesty offences committed when he was a financial planner and director of James Gibbs Investments Pty Ltd (JGI). JGI operated in Franklin St, Adelaide.
ASIC alleged that between 20 August 2009 and 30 July 2016, Gibbs stole approximately $4.88 million of funds that he was managing for his clients. A number of clients had self-managed superannuation funds, which Gibbs was able to access via client bank accounts.
ASIC also alleged that between 25 June 2012 and 30 July 2016, Gibbs created and used false documents, including banking documents and member statements.
08 February 2019
The United Kingdom (UK) is scheduled to leave the European Union (EU) on 29 March 2019 (‘Brexit’). The terms of the UK's exit remain subject to on-going negotiation between the UK and EU with a range of outcomes possible.
ASIC is carefully monitoring developments in the UK and has been liaising closely with the UK Financial Conduct Authority (FCA), the Bank of England (BoE), other Australian financial authorities, and our regulated stakeholders to identify and plan for potential Brexit-related impacts. This includes contingency planning in the event that the UK leaves the EU in a ‘no deal’ scenario.
ASIC Commissioner Sean Hughes said, “ASIC is well placed to manage the impacts arising in a ‘no deal’ scenario. We have been working closely with the UK’s financial regulators and our aim is to limit disruption to Australian financial services and our markets.”
ASIC will continue to monitor developments post-Brexit as intended and unintended consequences become apparent.
12 February 2019
ASX-listed company, Byte Power Group Limited (Byte Power), has paid a penalty of $33,000 after ASIC issued an infringement notice for an alleged failure to comply with Byte Power’s continuous disclosure obligations.
Byte Power, a diversified technology, food and wine distribution company, made an announcement to the Australian Securities Exchange (ASX) on 27 October 2017 titled “BPG Cryptocurrency Exchange Update” which included a statement that its Singapore-based partner for the development of a cryptocurrency exchange, Soar Labs Pte Ltd (Soar Labs), “is well advanced in the software development and expects to be Alpha testing the system robustness before the end of the year.”
ASIC alleges that by 14 December 2017, Byte Power was aware that it had approached alternative cryptocurrency exchange software providers and that Soar Labs had not carried out any work on the development of Byte Power’s cryptocurrency exchange. No testing of any software had started or was ready to be started.
ASIC alleges that by failing to inform the ASX that the software development for its proposed cryptocurrency exchange was not advanced and testing of the system software was not going to be undertaken by the end of the year, Byte Power was in breach of its continuous disclosure obligations.
Victoria's Independent Broad-based Anti-corruption Commission is pleased to host the 7th Australian Public Sector Anti-Corruption Conference (APSACC) in Melbourne on 30-31 October 2019. The theme for APSACC 2019 is 'Identifying challenges, finding solutions'.
APSACC is the leading anti-corruption event in Australia, with its focus on preventing, exposing and responding to corrupt conduct and corruption risks in public institutions, including all levels of government, elected bodies, the judiciary and statutory bodies.
APSACC 2019 will provide a further opportunity for anti-corruption and other agencies, academia, the private sector and other practitioners to discuss and share their experience and expertise.
The conference is expected to comprise plenary sessions, discussion panels and workshops that focus on research, trends, case studies and new methods for preventing, investigating and exposing corruption.
The conference will also provide opportunities for developing professional networks across areas of expertise and jurisdiction.
IBAC looks forward to welcoming delegates and others to Melbourne for APSACC 2019.
The formal call for abstracts has now closed. However, if you have a presentation idea that you would like to propose, please email firstname.lastname@example.org.
01 February 2019
Victoria's Broad-based Anti-Corruption Commission, IBAC, has terminated the employment of an IBAC employee due to serious professional misconduct.
IBAC recently received allegations of serious, inappropriate conduct by a senior officer, including a personal relationship with a member of the public who had contacted IBAC to provide information.
As soon as the allegations were made they were quickly and thoroughly investigated, with due process followed. The allegations were substantiated and the officer's employment terminated.
The Victorian Inspectorate, in keeping with regulatory requirements, has been notified. IBAC is now considering referring the matter to Victoria Police.
CEO Alistair Maclean noted that, like any Victorian public sector agency, it was important that IBAC be transparent in acknowledging employee misconduct and take steps to address any systemic or cultural issues underlying specific instances of such conduct.
In consideration of the welfare of the persons involved, and given the possibility of further inquiries, IBAC will not be making any further statement at this time.
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.
Credit Matters is continuing to grow and provide marketing and knowledge about financial risks to the Australia business community.
Futhermore, 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 email@example.com.
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 firstname.lastname@example.org for options.