In case you missed it, our latest feature B2B Credit in 2020 is now available from our website www.creditmatters.com.au
Currently we are working on two more features which we hope will be available before the end of May.
This month we have attached the following brochures. The first is from Barry Urquart a marketing strategist with his view on economy, details from the Australian Small Business and Family Enterprise Ombudsman on the recommendations for the new supplier code, a profile and list of services from CreditorWatch, details on Investigator's Upgrade courses, and our perspective on trying to identify fraudsters.
Don't forget, 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.
Many years ago my father said to me;
“If you owe the bank a million dollars, you are the worst customer. If you owe them 10 million dollars, you are their best customer”.
It seems at first, the question of identifying your best and worst customers is fairly easy to answer. In business however, nothing is ever as simple as it sounds.
On reviewing the question on what is your worst customer, it sounds easy. Fraudsters, slow payers and unscrupulous businesspeople would seem to stand out. Many business people, because they tend to think and act in black and white scenarios, might consider these are the worst type of customers.
These customers however are part of the business landscape. If you truly understand your own business and learn how these businesses operate, you may find they do offer a number of positive opportunities. For instance, until they show their hands completely for what they are:
you may be to sell to them profitable,
they provide valuable business lessons to remind you that these customer types exist, and
it can be a good way to disrupt your competitor’s business by suggesting these customers go to your competitor.
A customer which can be equally dangerous for another reason is a corporate customer who believes they do not have to treat your business as a valuable resource for their business.
It is also worth observing what happens to many larger businesses. Many become smaller, swap suppliers on what seems to be a whim, or start demanding increased benefits whether the supplier can afford them or not.
Finally, if your business is principally relying on one or two major customers, then based on the principle of not having all your eggs in the one basket, this may make them the worst customer for your business.
The good customer comes equally with other different features. For instance, smaller dollar valued customers can be the most profitable on a sales per dollar basis. You may also find they are easier to deal with over the long run, especially if you show them a little appreciation from time to time.
In addition, they can also provide an opportunity to increasingly sell other products and services exponentially, once you have understood what sort of business they operate.
Smaller businesses can also grow into bigger customers and it is wise to not just categorise a business because they are a small dollar buying business today. It is worth remembering the old tactic of finding an honest jeweller. All you need to do is to ask them what is wrong with your watch when it only has a flat battery.
Business is never simple and finding which are your best and worst customers is a challenging and ongoing process. Beware therefore of labelling a customer with a black and white title of worst or best customers. History often shows the good customer of yesterday, is the worst customer today, and vice versa.
Is an invoice an asset or a liability?
Accounting classifies an invoice as an asset, therefore many business people cannot think anything other than an invoice is an asset. After all, an invoice does represent money owed to them, and technically, they are right.
An invoice is not always an asset however even though it represents money owed to the issuer. The fact is; once an invoice remains past due for payment, it becomes a liability. Not a potential liability, but a real liability.
When an invoice becomes past due for payment, your costs increase, which means it has now become a liability to the business until it is paid. You might argue that the costs are slight if the invoice is paid shortly after it becomes past due for payment. We all know however a multitude of small costs soon add up to a large cost.
Should the invoice not be paid within terms, these costs multiply the longer the invoice is outstanding and even if paid, there is no guarantee a profit was made.
One of the fascinating aspects of business is how an entrenched attitude or a convention from the past becomes the norm and blinkers our thinking. When management believes an invoice is an indisputable asset, they often fail to place enough importance on ensuring every invoice is raised correctly and paid within terms. Until management and business owners understand that not every invoice is an asset, many of them will continue to find, an invoice is not necessarily an asset.
Shotgun email marketing is often not a profitable exercise and neither are accounts receivable shotgun emails for the unpaid invoice.
There are some people who still believe in shotgun marketing because they focus on the old sales equation which goes something like; 100 contacts, perhaps 10 per cent recipients take an interest and two per cent buy. Whether this sales equation is still valid in the modern age where emails, particularly when so many unwanted emails are received, is debatable.
With the abuse of emails by marketers and fraudsters, coupled with the warnings of cybercrime experts, many emails are sent straight to the junk mail. Consequently, the marketing message is lost and perhaps their business’s reputation is also tarnished.
Once it becomes obvious that shotgun marketing is not the sole answer, the marketers and salespeople have to start picking up the telephone and visiting their clients again.
The same goes when sending endless emails about outstanding invoices. Many of the emails will end up in the spam folder, too hard basket, or remain unanswered because of the lack of time, or the recipient is overworked.
At the end of the day, just like the marketing and sales people, your accounts people will also find they too have to pick up the telephone to seek payment for the unpaid invoices.
Is the spelling debateable or debatable?
Now there’s something to debate about. There are many words ending in ‘able’ that are preceded by an ‘e’. How then do you know if the ‘e’ should be included or not?
If you’re using Microsoft Office products you’ll find both spelling variations are acceptable. Apart from Mount Debateable in Queensland, the spelling debatable without the ‘e’ is by far the most common. The Australian Oxford Dictionary only lists debatable, but the Macquarie Dictionary lists both, with debateable with the ‘e’ as an also, or secondary spelling.
Updates courtesy of www.asic.gov.au
05 March 2019
Mr Richard Ludwig of Broadbeach Waters Queensland, Mr Stephen O’Neill of Port Melbourne, Victoria and Mr John Narramore, of Main Beach Queensland, have appeared in the Brisbane Magistrates Court on charges that include breaching director duties and dealing in the proceeds of crime.
The charges follow an ASIC investigation into the affairs of Cap Coast Telecoms Pty Ltd and its former director, Richard Ludwig.
06 March 2019
ASIC has today released a consultation paper (CP 310) seeking feedback on the proposed coverage of its review of the ePayments Code.
We are undertaking a review of the ePayments Code to ensure it continues to be effective and relevant to consumers and Code subscribers. The review will focus on testing the effectiveness of the following areas in the Code:
•data reporting; and
•mistaken internet payments.
The review will also consider options for future-proofing the Code. Since our previous comprehensive review of the Code in December 2010, there have been significant developments in the payments environment. These include changes to the ways consumers make payments (with the declining use of cash and the increasing availability and use of mobile payments technology). The current wording of the ePayments Code may not adequately cater for these developments, and this may have implications for the Code’s ongoing effectiveness and relevance.
Another area that we would like to explore is the extent to which the Code’s protections should be available to small business consumers.
This consultation paper is designed to assist us to define the scope of our review. We encourage feedback from all interested parties.
ASIC will use the feedback to consider whether and in what ways the Code needs to be amended. We will invite further feedback on our proposed amendments in due course.
Submissions are due by 5 April 2019.
11 March 2019
Clayton Utz has provided ASIC with its internal file notes from the firm’s interviews with current and former employees and officers of AMP, who were interviewed by Clayton Utz in connection with its report to AMP in October 2017 regarding fees for no service. The Clayton Utz report was considered in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in April 2018.
ASIC commenced Federal Court proceedings against AMP and Clayton Utz in December 2018 (18-379MR), seeking an order compelling Clayton Utz to produce the interview notes. The interview notes had been withheld from ASIC by AMP, who claimed that they were subject to legal professional privilege (LPP). ASIC disputed the claim of LPP.
The interview notes were responsive to a compulsory notice to produce issued by ASIC under s 33 of the ASIC Act in October 2018 and relate to ASIC’s ongoing investigation into AMP Group for fees for no service conduct and related false or misleading statements to ASIC.
On 7 March 2019, the day AMP and Clayton Utz were due to file their evidence in the proceedings, Clayton Utz produced the documents sought by ASIC with no claim of LPP by AMP. AMP agreed to pay ASIC’s costs and the proceedings were dismissed by consent on 8 March 2019.
‘ASIC is determined to take enforcement action against the major banks and financial service providers and to use all legal powers necessary to investigate the significant issue of fees for no service,’ ASIC Deputy Chair Daniel Crennan QC said.
‘Entities should take seriously their obligations under statutory notices issued by ASIC, including producing documents in accordance with the specified timeframe and not preventing the disclosure of documents to ASIC by making inappropriate LPP claims. These interruptions delay and frustrate ASIC’s proper investigation.
‘ASIC is pleased that the documents have now been produced but is disappointed that the matter was not resolved sooner,’ concluded Mr Crennan.
19 March 2019
The last of ASIC’s proceedings seeking damages on behalf of a number of investors in the Westpoint Group has been finalised.
Nearly $1.5 million has been returned to 201 former Westpoint investors who were members of a claim (Group Members) brought by ASIC against Brighton Hall Securities Pty Ltd (in liquidation) ACN 096 576 868 (Brighton Hall Securities).
On 7 March 2019, the Federal Court in Perth dismissed proceedings brought by ASIC against Brighton Hall Securities seeking damages on behalf of a number of clients of Brighton Hall Securities after the company’s liquidator completed the distribution of entitlements arising from claims against the insurance money recovered by the liquidator under section 562 of the Corporations Act.
The final dividend represented a return of 22.35 cents in the dollar on the Group Members claims for $6,652,702.
This action was one of 19 civil actions brought by ASIC to recover funds for the benefit of Westpoint investors against Westpoint-related companies and their officers, the Westpoint auditor and financial services licensees whose advisers recommended Westpoint products.
In all, investors received a return of around $160 to $170 million of the $388 million in losses incurred, made up of approximately $78.5 million in recoveries from the liquidation process and Westpoint companies not in liquidation and nearly $93 million compensation from ASIC’s actions.
theBankDoctor offers free banking and finance advice to help small business owners get the best business banking set-up.
28 February 2019
In the two weeks since the release of the final report into Misconduct in the Banking, Superannuation & Financial Services Industry, rather bizarrely the most contentious recommendation deals not with bank misconduct but mortgage broker remuneration.
This was primarily a Royal Commission into misconduct by the big four banks and they were lambasted by Kenneth Hayne for the pursuit of short term profit at the expense of basic standards of honesty. Yet despite all the horror stories, Hayne basically concluded that existing laws and regulations are generally adequate to protect borrowers it’s just that the banks have not always obeyed them and the regulators have not done a good enough job in enforcing them.
Meanwhile, Hayne pilloried mortgage brokers for having a conflict of interest because they act for the borrower but get paid by the lender. But unlike the banks, Hayne found little, if any, evidence of systemic misconduct yet his recommendation to replace commissions with a user pays fee for service has significant implications for borrowers, brokers, banks and the broader economy.
08 March 2019
This is a joint media release between the NSW Police Force and AUSTRAC.
The NSW Police Force and the Australian Transaction Reports and Analysis Centre (AUSTRAC) are reminding digital currency exchange providers to be aware of their obligations following amendments to Commonwealth legislation last year.
In April 2018, amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 were introduced, which included expanding the scope of the Act to include regulation of digital currency exchange providers.
These changes included registering with AUSTRAC, verifying customer identity, reporting suspicious matters and over-threshold cash transactions; and complying with record-keeping requirements.
08 March 2019
This is a joint release between the Australian Federal Police and AUSTRAC
A 27-year-old Bulleen man has been arrested during the second phase of an Australian Federal Police (AFP) investigation into an organised crime syndicate. Following the arrests, AUSTRAC suspended the registrations of two digital currency exchange businesses the man is associated with.
The initial phase of the investigation led to two men being charged for drug trafficking offences in October 2017. The AFP continued its investigation into those responsible for allegedly importing border controlled drugs via international mail into Melbourne.
On Thursday, 7 March 2019, AFP officers executed search warrants in the Melbourne suburbs of Bulleen, Templestowe Lower and Malvern, seizing steroids, Australian currency and cryptocurrency related items.
The 27-year-old Bulleen man was subsequently arrested and charged with importing, trafficking and possessing a total of approximately 30 kilograms of drugs, such as MDMA, cocaine, methamphetamine and ketamine.
Police will allege in court that the 27-year-old played a key role in directing the operations of the criminal syndicate, which used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs.
In a separate action, the AFP-led Criminal Assets Confiscation Taskforce (CACT) successfully sought the restraint of assets related to the investigation. Orders were obtained from the County Court of Victoria to restrain property valued in excess of $2 million.
This included several bank accounts, real estate properties, motor vehicles, a motorbike, cash and cryptocurrency. The restraining orders were made under the Proceeds of Crime Act 2002 (Cth.)
Following the arrests, AUSTRAC suspended the registration of two digital currency exchange businesses where the man was a key member, removing their ability to continue to conduct business
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.
05 March 2019
We have prepared guidelines on the authorisation process for non-merger conduct to help businesses and their advisers lodge applications for authorisation, and interested parties to provide submissions in response to applications.
These guidelines were published on 30 August 2018 following consultation. They have been updated with minor amendments.
22 March 2019
This guide is designed to help businesses understand when they can safely make country of origin claims about their products.
22 March 2019
This factsheet provides an overview of the Country of Origin Food Labelling Information Standard 2016, which requires origin information to be displayed for most food products offered or suitable for retail sale in Australia.
27 February 2019
The ACCC says its digital platforms inquiry is continuing to analyse issues about the digital advertising supply chain that affect Australian advertisers, including how advertising is verified on the major digital platforms.
In a speech delivered to the Australian Association of National Advertisers (AANA) and ThinkTV audience of marketing and television advertising executives in Sydney tonight, ACCC Chair Rod Sims called on the advertising industry to provide feedback on a number of preliminary recommendations before the inquiry’s final report in June this year.
In digital advertising in Australia it is estimated that more than sixty-eight cents in every dollar is going to Google and Facebook.
“Being big is not a sin. Australian competition law does not prohibit a business from possessing substantial market power or using its efficiencies or skills to outperform its rivals. But the dominance held by Google and Facebook in certain markets, plus the incentives they face, does mean their conduct should be subject to particular scrutiny to identify whether it is creating competitive or consumer harm,” ACCC Chair Rod Sims said.
13 March 2019
The Country Care Group Pty Ltd (Country Care), its Managing Director, Robert Hogan, and a former employee, Cameron Harrison, have been committed to stand trial in the Federal Court of Australia on all of the cartel charges laid against them.
This follows a committal hearing held before the Magistrates’ Court of Victoria in Melbourne from 4 to 13 March 2019.
The charges laid against Country Care, Robert Hogan and Cameron Harrison on 14 February 2018 relate to alleged cartel conduct involving assistive technology products used in rehabilitation and aged care, including beds and mattresses, wheelchairs and walking frames.
The matter will now be heard in the Federal Court of Australia at a later date.
14 March 2019
There should be a law in Australia prohibiting the sale of unsafe goods, ACCC Chair Rod Sims told the National Consumer Congress in Melbourne today.
Using new data the ACCC estimates the annual cost of injury and death caused by unsafe consumer products is at least $5 billion and could be much more.
Excluding motor vehicle accidents, there are around 780 deaths and around 52,000 injuries per year from consumer products that many Australians have in their homes.
“Many people are surprised to learn that it is not illegal to sell unsafe goods in Australia,” Mr Sims said.
“There is no law that says goods have to be safe, but there should be.”
15 March 2019
The Federal Court has ordered penalties of $250,000 against internet provider Australian Private Networks Pty Ltd (trading as Activ8me) for making false or misleading representations and not displaying a single price when advertising its internet services.
The Court has also ordered that Activ8me offer to refund setup fees and allow affected customers to exit or switch plans without charge.
Activ8me admitted that between June and November 2018, it made false or misleading claims in three direct mail advertisements and five online banner advertisements marketing its Opticomm fibre-to-the-premises (FTTP) packages, in breach of the Australian Consumer Law.
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.
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