Lodge your report via AUSTRAC Online between 4 January 2016 – 31 March 2016.
Published by Credit Matters Pty Ltd.
Welcome to Credit Matters Newsletter for March 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
My apologies for the newsletter not having a full quota of articles and features this month. It has been a hectic time for our family.
Word of The Month and Inconvenient Business Truth segments continue to offer valuable business insights.
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.
This month you will find three new business listings from Hummingbiz, Skinner Business Solutions and Enable Workplace.
In a similar theme to this month's quote, the Business Observation this month focuses on an unfortunate fact; "You cannot protect incompetent and naive business people from the effects of uncollectable invoices." You only have to ask any professional credit or accounts receivable staff or debt collector about uncollectable invoices to find out they will agree.
So, why are the basics of selling on credit so often overlooked in business today? It is not as though there isn't enough current and historical evidence showing one of the main ways of going broke is to raise invoices which are never paid. A quick review of many Debtors Ledger and Bad Debt registers will provide plenty of evidence of how and why invoices are uncollectable.
When invoices became uncollectable, the evidence usually shows the main problem originates from poor management decision making. Typically, you will find such decision making was because of:
(i) the 'business model" by which the organisation operates and seems welded to;
(ii) a lack of respect towards risk and a belief your business is different;
(iii) a lack of business discipline and organisational procedures;
(iv) a failure to understand the value of professional employees at all levels of the business process;
(v) failing to understand and recognise the "art of doing business";
(vi) a culture of living in the past;
(vii) failing to understand new business paradigms.
In an ever changing world selling on credit in the B2B environment has changed dramatically in the last two-three years. Whether you like it or not, when extending B2B credit today you are doing so in to a completely different world to that of two-three years ago. I was going to say a different environment at first, however that understates the environment in which business operates today. The reality is; we are now operating in a completely different business world.
We can see evidence of this new business world from four simple observations.
1 If you are a B2B credit provider today, fundamentally, all the cards are stacked against your business.
2 With every legislative change, fraudsters, slow payers and incompetently managed businesses, provides yet another option to slow pay or to avoid paying your invoice.
3 Integrity and honesty are no longer valued as it once was. Increasingly therefore, we note more customers are less concerned about the integrity of their business and its operating processes.
4 In a world of entitlement, your customers increasingly feel they are entitled to change payment terms after being supplied your goods and services.
In light of these observations, it would seem that if you are a B2B credit provider, you should no longer be selling under yesterday's business paradigms. Unfortunately, you cannot always get this point across to incompetent and naive business people.
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.
The words ‘practice' and ‘practise' are very tricky for many people to master. Practice with a ‘c’ is the noun and practise with an ’s’ is the verb. As an example, 'you go to practice to practise'. The idiom “practice makes perfect” doesn’t quite look right, but is correct. A common error is the use of 'Accounting Practise' to refer to the firm or company, which should in Australia be 'Accounting Practice'.
When reading articles on the internet keep in mind the American spelling is always ‘practice”, for both the noun and the verb. You’ll sometimes find incorrect usage as articles may be sourced from overseas, or the journalist themselves may originally be from America.
For more information on the Preferred Australian English spelling visit www.Australian-Dictionary.com.au .
Many rules which apply to 'paper' contracts also apply to electronic contracts entered into by email, online or otherwise electronically. As many businesses and suppliers move to online and electronic credit applications, including with customers who are not in Australia, these rules are even more pertinent.
GAMING & LEISURE Alert: Stopping the gravy train!
In practice, we often have clients with intellectual property (IP) who want to pursue an infringer or, alternatively have received a letter of demand or had Court proceedings brought against them.
On 11 February 2016, the long running Dallas Buyers Club (DBC) preliminary discovery application, seeking disclosure from ISPs of customer details of accounts, was dismissed. For an overview of the case up until now see our posts on the April and August decisions.
Would you like to know more?
Credit Matters provides access to blogs written by Kim Radok. Just go to www.creditmatters.com.au to read these and previous blogs.
Since our last newsletter, we presented the following blogs.
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.
"The job of the police is to lock up criminals not to stop large sections of the community making dumb decisions”
John Silvester in the Naked City, Insight in The Saturday Age, March 7, 2015
Our ‘Inconvenient Truths’ are facts-of-business that too many owners and managers either aren’t aware of, have forgotten, or lost sight of. Symptoms of overlooked truths are increasing expenses, depleting cash flow, diminishing profits and/or lack of winning new business opportunities.
Email us at email@example.com to discover the ‘Inconvenient Truths’ and how they can redirect your business back to success.
Most Debtors Ledgers contain liabilities as well as assets.
Whilst Accountants classify the Debtor's Ledger as a current asset, rarely do we see the worth of these assets qualified. It is not difficult to see why. It creates more work to try and qualify the actual dollar value of this asset class.
All too often invoices are raised which will never be paid, or will be paid outside agreed terms of trade. The causes for this state of affairs are many, including invoices raised incorrectly, or for customers of dubious character or to satisfy the needs of internal managers and employees trying to protect their jobs.
Incompetent business people are another factor. Many fail to understand that all unpaid invoices need to be followed up promptly and customer enquiries resolved quickly to maximise cashflow.
Any unpaid invoice which is still outstanding after agreed terms of payment, becomes an asset with a declining dollar value, whilst accruing additional expenses. These invoices soon become a liability.
Constant care is required to ensure your Debtor Ledger remains a dollar attractive asset and devoid of as few ongoing liabilities as possible. Such care also assists to protect the integrity and dollar value of the asset.
If you do not understand this Business Inconvenient Truth, contact Kim
To view the full list of Business Inconvenient Truths, become a member at www.creditmatters.com.au. Membership is free.
|7 March||16-064MR ASIC reports on cyber resilience and shares examples of emerging good practices|
|8 March||16-065MR Company director receives suspended jail sentence for failing to assist liquidator|
|11 March||16-070MR Former Hanlong managing director sentenced to more than 8 years jail for insider trading|
|14 March||16-071 Global Money Week: ASIC releases practical tips and resources to teach kids about money|
|15 March||16-072MR Former Company Director found guilty of fraudulent misappropriation|
|16 March||16-075MR ASIC imposes conditions on Melbourne auditor's registration|
|21 March||16-082MR ASIC consults on proposed guidance about 'robo-advice'|
|23 March||16-088MR British and Australian financial regulators sign agreement to support innovative businesses|
|24 March||16-092MR ASIC obtains permanent injunction against Macro Realty Development and other orders against companies associated with Jamie McIntryre|
|29 March||16-095MR ASIC facilitates easier electronic disclosure under the ePayments Code|
|30 March||16-096MR ASIC's latest enforcement report outlines key outcomes and areas of focus for the future|
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.
Lodge your report via AUSTRAC Online between 4 January 2016 – 31 March 2016.
Western Union affiliates Weigang Li & Dongfang Tan (trading as Empire Milk Bar) & Narinder Singh (trading as Star Link Travel) were suspended on 15 December 2015.
Estefa Milka Honores (trading as American Cash Service), whose registration was cancelled in August 2015, has been re-registered with conditions.
AUSTRAC has cancelled the registration of Narinder Singh (trading as Star Link Travel), an affiliate of Western Union Financial Services Australia.
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.