March 2022
Let’s build a new website, all will be okay, is what we all think. Alas it is not always so. Another set-back has happened, however, I am hopeful we will be up and running before the end of April.
The attachments with this newsletter include two updates from the Australian Small Business and Family Enterprise Ombudsman
In addition, I draw your attention the ASIC’s focus on the new responsibilities of social media influencers. You will find a reference about social media influencers from ASIC in their segment below and included in this newsletter.
Kim is available to help with your questions and concerns if you need any assistance, and as always, the first chat is always free of charge or obligation.
“Price is what you pay for. Value is what you get.” Warren Buffett
Never has it been more important to ensure that you have the best quality inputs for your business. After all, your business is the basis of you and your family’s emotional and financial welfare. I realise that not every business has access to bucketloads of money. Nevertheless, there are steps and ways to fund your business to try and have the best quality inputs available according to your current resources.
Today there are so many factors which are beyond your control which can and will affect your business, some negatively and others positively. For instance, all of us can now see inflation is on the rise and about to get worse. It would also be wise to acknowledge other negative factors of a rise in interest rates, a shortage in supply and availability suitable employees which you are unlikely to be able to control in short-term.
Then there are the factors which you can control such as reputation, a focus on quality service, the elimination of mistakes and being open minded about change and business strategies. It is these factors that a business owner or manager can control via sound business practices and a positive ethos.
Seeking the best quality upfront inputs which are affordable at the time when your finances may be limited, also means being wary of trying to have the best of everything. We know of many businesses which have started in back rooms, garages or in poor quality operational areas and survived. Other businesses meanwhile may have sought the best locations or grand buildings, motor vehicles and technology and failed.
It was not surprising therefore when many of these businesses ran out funds to keep going because they could not pay the higher costs required for these best of inputs. The reality was that they could not afford the extra expense of having these impressive inputs rather than operating commensurate within their capital resources and access to finance.
There are steps however which you can take to fund your business and have the best quality of inputs available according to your current financial resources. For instance, you can operate your business with a positive organisational culture and the proper employment remuneration package commensurate to your business’s capacity to pay.
Another example of managing your capital and finance facilities properly, is not to waste it on “flash” assets to look good just because you have the necessary finances. If your business’s image is important, then there are more effective ways of doing it rather than looking pretty and successful. Whilst these images may be a priority in the owner or manager’s minds, these factors alone do not pay the bills.
A more desirable image to project should be one of reliability, being mistake free, offering a great customer service, etc. Spending your resources on time and efforts on these factors will bring a much better return than trying to look pretty and successful.
In conclusion, quality and positive outcomes are essential when seeking value for money when starting up or running a business. Never has this focus of quality and value been more important than in these turbulent economic and social times. In the long run, focusing on quality inputs for your business rather than just the cheapest upfront inputs will always bring you better long-term rewards.
It is a fact of life, whether management likes it or not, picking up a telephone and dealing effectively with stakeholders is more important than ever. In business today, management often fails to acknowledge this fact and there are many reasons why this situation exists.
The first is that management often believes technology will solve all their problems, reduce costs and most of their stakeholders are more comfortable in dealing with situations via technology interfaces rather than telephone. In part, this belief may be correct.
Another main reason for the problem is that so many people in business are afraid to deal with other people face to face or via the telephone. These situations have arisen due to a lack of on-road employees who actually visit and talk with their contacts whereby strong relationships can be formed. In addition, too many businesses operate sales/helpdesks or answering services perpetually understaffed or are operated with inexperienced employees. As a result, enquirers’ questions are rarely answered adequately, or many left messages are never returned or acted upon correctly.
In addition, you will often find managers in customer service, sales and accounts will request their employees to call and talk with their clients when budgets are not met or problems occur. Later when results are not achieved, management finds out their employees have mostly only just sent emails and text messages instead making the calls.
The important question in these situations is to find out why these outcomes are occurring.
I believe the above occurs because employees have been put under so much pressure by management for short-term results, the employees simply do not have the time to develop their people skills. As a result, many employees are now reluctant to make a telephone call. After all many employees these days seem to be afraid of any direct contact with other people because they:
The problems associated with a focus on the benefits of technology is that there is often a corresponding lack of focus on people skills which are so essential for all businesses. As a result, we see many more employees with great technology skills, whilst lacking people skills.
One of the problems therefore in this situation, is that many employees are afraid to pick up a telephone.
It is by telephone contact however that we often quickly resolve many of the issues causing problems which are hidden or ignored in email contact. Furthermore, it is through effective telephone contact that the best business relationships are formed and enhanced. To achieve these outcomes however, your employees need to be encouraged and supported when they are asked to make direct contact with the business’s stakeholders.
Is the pace of change the problem, or is it failing to see how the world evolves to meet different problems and having the means, emotionally and financially to manage the changes? The truth is that many businesspeople fail to appreciate, changes constantly occur and they need to quickly update their business resources to ensure their business is equipped to manage these changes.
One of these resources which requires regular review and updating is your business’s contractual terms and conditions of trade. After all, this contract is one of the key factors which your business requires to be in proper order to conduct business with a sense of safety.
It must be stressed however whilst these contracts are essential, they can never absolutely guarantee the safety of any given trading relationship. There are a number of other conditions which may affect even the best of these trading contracts, and is a subject for another time.
Nevertheless, a properly prepared contract of terms and conditions of trade is invaluable from many aspects. To be of the best value, your contract must be prepared by a suitably qualified lawyer, and preferably one who will defend their contract in court. On this point, I suggest you must insist that the lawyer responsible for preparing the contract represent your business in court, not some junior or other inexperienced lawyer from their firm.
In addition, the other factors affecting the contract:
There is no value having a contract that is out of date, is not valued as a protection asset for the business in case of need, or was created for another business.
At the end of the day, your business’s contract must be up to date, properly prepared, and your key personnel know how to use it effectively. When these factors are in order, the contract is a very valuable asset in protecting the assets of your business if required.
As I was researching articles recently, I came across Gary Zeune’s article “Are You Teaching Your Employees to Steal?” Published in Business Credit April 2001. You can find a copy of the article at this link.
https://www.mypspa.org/article/more/are-you-teaching-your-employees-to-steal%3F
As this recession, or at best the business downturn advances, it is a timely reminder about employee fraud. In tough times, when many employees may be in financial trouble, have a gambling or drug problem, they may be tempted to commit fraud.
It would therefore be useful to review the article and perhaps others, and then revisit your business’s operations in an effort to protect your business’s financial and long-term viability.
Updates courtesy of www.asic.gov.au
25 February 2022
22-031MR ASIC extends relief for short term arrangements following a credit hardship notice
ASIC has extended Class Order [CO 14/41] for a further two-year period to 1 April 2024. The class order relieves credit providers and lessors from the obligation to provide written notice to consumers about hardship contract variations of 90 days or less (known as ‘simple arrangements’).
The relief was due to expire on 1 March 2022 and has been extended by ASIC Credit (Amendment) Instrument 2022/81.
02 March 2022
22-034MR ASIC streamlines process for insurers to provide consumers cash in emergency situations
ASIC has issued legislative relief that allows insurers to give emergency payments to consumers in certain circumstances without first giving them a Cash Settlement Fact Sheet (CSFS).
The relief formally came into effect on 11 February 2022. Insurers can apply the streamlined process to emergency payments for insured consumers impacted by the current catastrophic severe weather and flooding in Queensland and Northern NSW.
A CSFS is a written document that insurers must give to consumers when they are offered a cash settlement, setting out the options available to settle their claim. A CSFS must outline the options available to a consumer, for example having their goods repaired or replaced, or receiving a cash payment.
18 March 2022
22-052MR ASIC helps young people Get Moneysmart
57% of young people want to learn more about investing, 54% want to make the most of their money, and now, more than ever, young people are visiting ASIC’s Moneysmart website to help them make informed money decisions.
ASIC surveyed 3,000 Australians aged 15 to 21, to better understand the money challenges young Australians face. The results provided insight into how young people learn about and engage with money, and how they feel about their finances.
To support young people make money choices that work for them, and to recognise Global Money Week (21-27 March), ASIC has released Get Moneysmart. This new resource is designed to make it easier for young people to manage their money and deepen their understanding of key money concepts and behaviours.
21 March 2022
22-054MR ASIC issues information for social media influencers and licensees
ASIC Commissioner Cathie Armour said, ‘The way investors access information is changing. It is crucial that influencers who discuss financial products and services online comply with the financial services laws. If they don’t, they risk substantial penalties and put investors at risk.’
In 2021, the ASIC young people and money survey found that 33% of 18-21 year olds follow at least one financial influencer on social media. The survey found a further 64% of young people reported changing at least one of their financial behaviours as a result of following a financial influencer.
15 March 2022
Your whistleblower policy may not comply with the latest updates to the whistleblower protection regime, writes ASIC Commissioner Seam Hughes GAICD.
The past three years have seen extensive changes to the Australian whistleblower protection regime in the Corporations Act 2001 (Cth). Public companies, large proprietary companies and corporate trustees of registrable superannuation entities are required to have a whistleblower policy that reflects the strengthened whistleblower protection regime that started on 1 July 2019. This includes clearly setting out the legislated protections for whistleblowers and how they can report misconduct.
17 March 2022
AUSTRAC joins Russia-Related Illicit Finance and Sanctions FIU Working Group
AUSTRAC is working with international partners, as well as Australia’s financial industry and partner agencies across government in a coordinated effort to track the movement of funds around the world and to identify opportunities to jointly target individuals and entities subject to sanctions.
To support a coordinated international approach, AUSTRAC has joined the Russia-Related Illicit Finance and Sanctions (RRIFS) FIU Working Group. The Working Group brings together FIUs that have extensive experience collaborating on financial intelligence matters and will allow us to focus and coordinate our efforts effectively.
AUSTRAC has also established a dedicated team which is monitoring financial reporting and analysing data to detect financial activity associated with Australia’s targeted financial sanctions against Russia to support of a whole of Australian Government approach.
The Working Group has released a Statement of Intent that will guide our collective efforts.
31 January 2022
BAC's complaint form in alternative formats and languages for anyone unable to complete our online complaint form.
Complaints should be submitted via IBAC's online complaint form where possible.
Our complaint form is also available in PDF format and Word/DOCX format, which can be completed and emailed to IBAC or printed and mailed in. Instructions are provided in the form.
If you are complaining on behalf of another person, you must have their written consent. Complete Appendix A - Authority to Act (also available in Word/DOCX format).
Please contact us if you have questions or need assistance making a complaint.
28 February 2022
Feedback sought on potential new rules for large digital platforms
The ACCC is seeking views from consumers, businesses and other parties on options for legislative reform to address concerns about the dominance of digital platforms.
A discussion paper, released today, outlines options for addressing harms to competition, consumers, and business users in a range of areas dominated by large digital platforms, including social media, search, app marketplaces, general online retail marketplaces and ad tech.
“The upcoming fifth report will mark the half-way point of the Digital Platform Services Inquiry. Now is the time to consider whether further reforms are needed to supplement the important tools in Australia’s competition and consumer law to maintain a vibrant digital economy that drives innovation and enhances productivity,” ACCC Chair Rod Sims said.
“There is momentum building internationally, with authorities and lawmakers around the world taking action to address the competition and consumer harms arising on digital platforms.”
“These platforms hold powerful positions in the economy and society and can often dictate terms to businesses that use their services. This in turn can harm consumers and the small businesses that rely on them, including through higher prices, greater use of personal data, reduced choice, less innovation or lower quality products,” Mr Sims said.
15 March 2022
New digital platform rules crucial next step in consumer law reform
The development of new upfront rules that force dominant digital platforms to treat their users fairly is the important next step in reforming Australia’s consumer protection laws, ACCC Chair Rod Sims said today.
Delivering the 2022 Ruby Hutchison Memorial Lecture, Mr Sims applauded the progress on stronger consumer laws in Australia, starting with the introduction of the Australian Consumer Law in 2011, which included penalties for breaches, and then a significant hike in penalties in 2018.
“When I arrived at the ACCC in 2011 a $1 million penalty against a large company was celebrated,” Mr Sims said.
“I remember the positive reaction to Optus having to pay a penalty of $3.6 million for a breach of the ACL in 2013. Then in 2018, it seemed a milestone that Ford, Apple and Telstra faced penalties in the $9 million to $10 million range. In 2021 we saw Telstra pay a $50 million penalty, Volkswagen pay $125 million and AIPE, a vocational training company, hit with a $153 million penalty.”
“High penalties are essential for effective deterrence. The ACCC does not have the resources to tackle most consumer law breaches, so our approach is to take specific cases, and allow high penalties to send a message to all other companies,” Mr Sims said.
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