We hope the results for 2018 were positive and have set you up for success in 2019 as it looks likely to be a year of significant challengers. If 2018 did not meet your success expectations, then you really need to try and change your business to meet this year's challengers.
At Credit Matters, we continue the production of new features and other developments to meet the challengers ahead in 2019. So why not visit our website occasionally and see what becomes available to you develop your business.
In this edition, we have attached two flyers from ACFE promoting their courses. In particular, I draw your attention to their February Cryptocurrency Half Day Seminar. I expect this seminar to provide a number of interesting perspectives on cryptocurrencies not available from other sources. CreditWatch's brochure advertising its extensive range of services, offers new products and services which can assist all business owners and managers. Jan Reeves has just launched her book "Get Paid" which offers essential information for business owners of smaller business who need help and directions when selling on credit.
Finally and not least, 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.
Abandon traditional forms, rules, and customs, we noticed…and you are most likely on your way to disaster.
We don’t know exactly why the traditional ‘rules’ are what they are. And we don’t know the consequences of breaking them. But there is almost always a price to pay.
This month’s quote is more visible today in the business community than ever before. The value of this quote is particularly important when we discuss issues related to Accounts Payable, Credit Management and Accounts Receivable.
If we visit the circumstances under which these core business areas operate today, you may be amazed at how many traditional processes have been discarded and devalued. More interestingly, is to see how few lessons are learnt in the real-life classroom of cash flow management and the protection of cash.
On revisiting the past, we note there were customer and creditor account reconciliations, statements were demanded, long standing employees knew the habits of their customers and suppliers. We also noted that no one was afraid of picking up the telephone.
In an era when bank reconciliations are still completed, why are so many businesses no longer reconciling creditor and customer accounts? After all, the purpose is the same, to protect your business's cash.
Many businesses no longer reconcile their creditor or customer accounts. Again, as I have discussed in the past, if you don’t reconcile these accounts, you don’t manage your money. A failure to reconcile these accounts is usually based on arrogance, or the use of technology tools and processes to ensure no mistakes. Alternatively, the naïve business person who wants to save costs, may believe by not reconciling, they will save money.
The fact that many businesses no longer require supplier statements is another baffling decision. In a time where not knowing is not acceptable, why is not knowing what your business owes acceptable? Of course, it is not. By refusing to accepte responsibility for what your business owes, exposes you, the business and its directors to legal action and/or insolvency.
Long standing and dedicated employees get to know how their business, customers and suppliers all operate. This knowledge is worth dollars in the bank. Why is this information not of commercial value? In addition, today where fraud, scams, and cybercrime are part of the business landscape, having employees which know what is right and wrong, is critical. Fraud and hacking are after all, just a false invoice, email, or one wrong click away.
Finally, due to the practice of employing the cheapest employees with limited skill sets, almost everyone seems to be afraid to pick up the telephone these days. Mind you, it can be almost impossible to find a valid telephone contact point for some suppliers and customers. However, that is not the point. It now seems that from senior management down, many are unable to pick up a telephone and have an intelligent conversation with their customers and suppliers.
As this month’s quote suggests, when you do away with traditional ways of doing business, you aren’t always aware of the true costs of the changes. In the areas of cash flow and profit protection, this is no different.
Based on my current business and work experiences, I suspect there are many businesses which have absolutely no idea of the true value of their assets and liabilities. In the good times when sales are plentiful, this situation may not be so obvious and can remain hidden for years. When times are tight, a lack of sales, and an increase in defaulting debtors, there is no hiding from your business’s true state of affairs.
It is more cost effective to respond quickly and with respect to customer enquiries then to ignore them.
Customer enquiries are like gold to any business. The fact is, customers’ enquiries reveal negative issues within your business which can be eliminated and highlight invoices with problems that need to be quickly resolved so they can be paid.
The business which ignores the importance of customer enquiries, or believes they are a hindrance to sales, fail to see the gold. As a result, these businesses lose sales through inefficiencies, have increased costs and slow paying customers because their concerns are not quickly addressed.
Obviously, no business wants unnecessary customer enquiries if they can be avoided. However, when customer enquiries are received, resources are required to treat all customer enquires quickly and with respect. At the end of the day, if the enquiries are not resolved quickly and the causes fixed, there are two obvious outcomes.
The first is there will be an increase in enquiries which will create additional problems for your business and increase delayed payments. Problems will continue to escalate and unnecessary costs to increase.
Secondly, customers will no longer make enquiries. The first you will know of any problems is when you make an enquiry about falling sales, or invoices remain outstanding without explanation.
The conundrum for all businesses; do they spend money to treat all customer enquiries efficiently and with respect to avoid further unproductive costs? Alternatively, do they spend money and time later trying to fix problems which increase costs which do not add value to the business, or cause slow-paying customers?
Time waits for no one and what we have, is limited.
The banks and other finance providers which provide finance, will charge interest for every day you have a debt outstanding. Any day you can reduce the amount owed, means money is saved. Financiers will also not wait for payments just because you don’t have the money to make your payments as required.
Creditors do not have the time or money to carry the debt owed to them indefinitely. Their patience is also limited in the face of continued non-payment, or a lack of communication. It is also worth remembering, there is nobody more demanding than a cash poor creditor which is trying to pay off their own debts to survive.
Customers no longer wait for any business to respond to their request for information on products, services, or for enquiries to be answered. They also will not hold up their payment runs, or issue a special payment just because you were slow in responding to their enquiries.
Your investors are no different. They have limited time and patience for your non-performing business.
As all businesess rely on profitable sales to survive and grow, it makes sense to concentrate every effort to sell properly, answer customers’ enquiries promptly and collect unpaid invoices as quickly as possible.
Every time there is a delayed response or a problem involving a raised invoice, costs increase and potentially, your business runs out of time to get paid and complete a sale. Yet it is surprising how many business owners and professionals place so little emphasis on the importance of time and how it influences the opportunity to sell, be paid promptly, or survive.
The words this month are very similar to the words adaptor and adapter from last month. You may even feel it is easy to then guess which is the primary spelling.
The Australian Oxford Dictionary and the Macquarie Oxford Dictionary both agree the primary spelling is disrupter and the secondary spelling is disruptor. The opposite of last month’s words.
If you check the overseas online English dictionaries including the British Oxford and US Merriam Webster, both agree the spelling disrupter is the primary spelling.
If however we check the usage in Australia for sites ending in .au using Google, we see the overwhelming usage is disruptor, with a ratio of 8:1 to disrupter. Checking government sites ending in .gov.au has a ratio of disruptor to disrupter as 3:1.
Far more people use the secondary spelling in Australia compared to those using the primary spelling. This also appears to be true in the UK. Microsoft Office is no help as both spelling variations are considered correct.
At this stage, all I can suggest is to stick to the primary spelling suggested by the authoritative references, which in this case is disrupter. If anyone challenges you, at least you can refer them to the authoritative references. But do keep an eye on this one as the primary spelling may change in the future.
Updates courtesy of www.asic.gov.au
19 December 2018
Mr Matthew Geoffrey Rixon, of Lakes Entrance NSW, has appeared before the Gosford Local Court charged with making false and misleading statements in documents lodged with ASIC.
ASIC alleges that between 11 March 2015 and 1 July 2017, Mr Rixon made false and misleading statements in 36 documents lodged with ASIC. The allegations relate to Mr Rixon lodging forms with ASIC to register companies and appoint directors without their consent or using fictitious director names and, upon registration of those companies, lodging forms with ASIC to register business names.
Mr Rixon appeared on 11 December 2018. He did not enter a plea and the matter was adjourned for further mention in the Gosford Local Court on 12 February 2019.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
24 December 2018
The Federal Court of Australia made interim orders on 20 December 2018 restraining Askk Investment Group Pty Ltd (Askk) from dealing with funds in their bank accounts in relation to a suspected land banking scheme. Askk is also restrained from selling or otherwise dealing in the property which is the subject of the land banking scheme.
Askk has an interest in land located in Lot 2, 615 Hume Highway Beveridge, Victoria.
ASIC suspects that since October 2017, Askk has raised in excess of $10 million dollars from more than 270 investors in relation the land, and since this time, investors have been making ongoing payments in respect of their investment.
22 January 2019
Illegal phoenix activity involves creating a new company to continue the business of an existing company that is deliberately liquidated to avoid paying taxes, creditors and employee entitlements.
22 January 2019
Join us for the 24th ASIC Annual Forum as we explore how the financial services industry can focus on the end user, and how financial market participants can meet public expectations when dealing with 'other people's money'.
This year’s ASIC Annual Forum will be held in conjunction with the International Organization of Securities Commissions (IOSCO). The event brings together thought leaders from Australia and around the world.
14 December 2018
Today AUSTRAC released guidance to educate Australia’s Superannuation sector of the risks they face from criminal exploitation and how they can proactively combat financial crime.
The guidance focuses on specific risks and potential scenarios relating to money laundering (ML), terrorism financing (TF) and serious financial crime specific to Superannuation companies. It also gives examples of methods these organisations can use to mitigate these risks and combat criminal threats.
02 January 2019
Now is the time to complete your annual AUSTRAC compliance report for 2018.
The compliance report asks questions about how you have met your anti-money laundering and counter-terrorism financing (AML/CTF) obligations over the 2018 calendar year.
You must complete the report by 31 March 2019.
We use the answers you provide to assess your AML/CTF compliance and identify where additional guidance and support is needed to help meet AML/CTF obligations.
20 December 2018
The On-course bookmakers: money laundering and terrorism financing risk assessment is now available.
This is the result of collaboration with the on-course bookmaking sector, state-based licensing bodies, industry associations and partner agencies.
On-course bookmakers should use this risk assessment to evaluate and improve their anti-money laundering and counter-terrorism financing systems and controls. In particular, on-course bookmakers are reminded of their obligation to report suspicious matters to AUSTRAC. There is significant room for improvement from the sector in this critical area.
If you have any questions, including about your obligations, please contact the AUSTRAC Contact Centre at firstname.lastname@example.org or call 1300 021 037.
23 January 2019
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.
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.
19 December 2018
Issue 18 of our IBAC Insights e-newsletter features updates on investigations and prosecutions, new research on whistleblower welfare, a review of local government integrity frameworks, call for abstracts for the seventh Australian Public Sector Anti-Corruption Conference, and more.
Read the IBAC Insights Issue 18 summary
14 January 2019
Victoria's independent anti-corruption commission, IBAC, has today charged a former Frankston City Council manager with 79 charges including obtaining property by deception, making false documents, using false documents and misconduct in public office. IBAC also charged a supplier of services to Frankston City Council, who is the owner of an electrical company, with 78 similar offences, on 7 January 2019.
The charges follow Operation Topi, an IBAC investigation into allegations improper procurement practices were used to obtain Frankston City Council funds.
This investigation commenced after IBAC received a notification from Frankston City Council. Under mandatory notification requirements that came into effect in 2016, all heads of Victorian public sector departments and agencies, including council CEOs, must by law notify IBAC of any matter they suspect, on reasonable grounds, involves corrupt conduct.
The first court appearance in relation to these charges is scheduled at the Melbourne Magistrates Court on 30 January 2019.
To report public sector corruption or police misconduct, visit www.ibac.vic.gov.au/report or call 1300 735 135.
20 December 2018
Small businesses, including agribusinesses, can sometimes be better off negotiating with their customers or suppliers as a group (referred to as collective bargaining). Working together, you might be able to negotiate better terms and conditions with larger businesses, and create efficiencies, that you could not achieve on your own.
However, without ACCC approval prior to commencing negotiations, collective bargaining risks breaching the Competition and Consumer Act 2010 (the Act).
This guide provides information on the collective bargaining approval processes in the Act and outlines how the ACCC assesses the public benefits and detriments associated with collective bargaining proposals.
08 January 2019
This is a quick guide to help franchisees and prospective franchisees understand some of their rights and responsibilities under the Franchising Code of Conduct.
21 December 2018
The Rules Outline for the new Consumer Data Right (CDR) has been made available today, and sets out the ACCC’s position on what should be included in the rules that will govern the CDR.
“This is an important step towards making the Consumer Data Right a reality. The Consumer Data Right will initially apply to banking data, giving consumers and small businesses the choice to securely share data with trusted third parties,” ACCC Commissioner Sarah Court said.
“We expect the Consumer Data Right to open up a range of innovative and cheaper financial services to consumers because it will overcome some of the problems caused by the lack of transparency around current market offers and the concentration of consumer banking data in the hands of the banks.
“The rules outline will offer certainty to data holders and potential data recipients so they can continue to develop the reliable and secure systems and new product offerings ahead of the start of the CDR regime,” Ms Court said.
The Rules Outline follows consultation on the Rules Framework published in September.
21 December 2018
The Federal Court has ordered one of Australia’s largest debt collection firms, ACM Group Ltd, to pay $750,000 in penalties for ACM’s misleading, harassing, coercive and unconscionable pursuit of unpaid debts from two vulnerable consumers.
Between 2011 and 2015, ACM pursued two consumers, one who was resident in a care facility and the other a single parent with limited income, for unpaid mobile services debt which ACM purchased from Telstra.
“ACM’s continued harassment and intimidation of a care facility resident who had difficulty speaking after suffering multiple strokes is one of the worst cases of unconscionable conduct we have seen in the debt collection sector,” ACCC Commissioner Sarah Court said.
“ACM’s conduct towards another consumer who was in difficult financial circumstances, which included giving false information and making empty threats of court action, was also particularly egregious.”
“This penalty sends a signal to all business in the debt collection sector that their standards of behaviour must comply with the Australian Consumer Law when they are seeking to recover debts.”
“Unconscionable conduct such as harassment, intimidation and coercion of consumers is unacceptable to not only the ACCC and the Court, but the wider community,” Ms Court said.
The ACCC had sought the maximum penalty of $1.1 million for ACM’s conduct towards the first consumer, and around $550,000 for its conduct towards the second consumer, due to the seriousness of ACM’s behaviour.
The Court has made a number of other orders, including that ACM pay the ACCC’s legal costs.
03 January 2019
Wesfarmers Kleenheat Gas Pty Ltd (Kleenheat) has paid penalties totalling $25,200 after the ACCC issued two infringement notices for alleged false and misleading representations made about gas prices.
From 29 April 2018, Kleenheat advertised that new customers in Western Australia could “Save 35% on gas charges” by switching to its Monthly Energiser Plan.
The ACCC alleged that this representation was false and misleading because the discount only applied to a customer’s gas usage charges (but not to other charges, like the gas supply charge or account fee).
The ACCC also alleged that the overall impression created by the advertisements was that the discount would apply while the consumer remained a customer, when in fact the discount only applied for 12 months, after which it dropped to 25 per cent.
18 January 2019
The Federal Court has imposed a $2,604,000 penalty against Ultra Tune Australia Pty Ltd (Ultra Tune) for breaching both the Franchising Code of Conduct and the Australian Consumer Law (ACL).
Justice Bromwich found that Ultra Tune had failed to act in good faith in breach of the Franchising Code, and had made false or misleading representations in breach of the ACL, in its dealings with a prospective franchisee.
Ultra Tune made false or misleading representations to the prospective franchisee about the price of the franchise, the ongoing rent of the premises, and the age of the franchise . The prospective franchisee was also told that a $33,000 deposit was refundable when it was not.
Ultra Tune also breached the Franchising Code by failing to prepare marketing fund statements within the required timeframes, failing to provide these statements and audit reports to franchisees, and failing to include sufficient detail in the statements.
23 January 2019
Three manufacturers of consumer GPS navigation products have agreed to stop using ‘lifetime’ claims in their advertising of navigation services after the ACCC raised concerns these statements were potentially false, misleading or deceptive.
TomTom ANZ Pty Ltd (TomTom), MiTac Australia Pty Ltd (Navman) and Garmin Australasia Pty Ltd (Garmin) each made lifetime claims in marketing on their websites, on packaging and point-of-sale marketing, and in retailers’ catalogues and websites. Examples of the statements included:
•TomTom: ‘Lifetime TomTom Traffic’,
•Navman: ‘Lifetime FREE Maps – Never worry about maps again. Updated quarterly, you will always stay up to date with our Lifetime FREE Maps including updates to safety alerts at no additional cost’, and
•Garmin: ‘Free Lifetime Maps & Traffic’.
Despite these statements, TomTom, Navman and Garmin each retained the discretion to stop providing these services before the end of the lifetime of the device in certain circumstances. The ACCC considered these limitations were not communicated to consumers in a prominent way.
“We believe the statements about ‘lifetime’ services made by these GPS manufacturers were inconsistent with what consumers would understand ‘lifetime’ to mean,” ACCC Commissioner Sarah Court said.
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.