In November we continued to develop our range of features and includes a special feature which will appear occasionally as items of interest attract our attention and we believe may be of value to our readers. Our first feature is Robert Heller's Catch 22, a truly interesting and enjoyable read at several levels.
You will also find on our Home Page a video by a respected debt collector from the US, Dean Kaplan, "The Confessions of a Debt Collector".
This month we are pleased to introduce a new member to our Better Business Club, Collect AU. CollectAU is a new start up debt collection business established by respected industry professionals. You will find their introductory flyer is attached.
Also attached are announcements from ASBFECO regarding Payment time review will identify Australia’s worst payers, RSM - AFC Exam Reviews for 2019 and an introduction to a new CreditorWatch product.
If you would like to advertise your business, contact Kim at email@example.com and see what we can do for you and your business.
The absence of evidence is not evidence of absence.
One of the more interesting aspects of business is the failure by many businesses to measure the cost of loss caused by operational and organisational inefficiency. When challenged by management on why you should measure this loss, they might say, there is no evidence of any loss.
Alternatively, management will advise they believe any loss is not large enough to warrant the work to find out the size of loss, or they don’t have the time or money, or they don’t want to be distracted from selling.
The fact is, if you don’t measure the losses caused by inefficiency, then of course there will be no evidence within the business. That does not mean there are no losses from operating inefficiently.
There are always losses when operating inefficiently and no business is immune to these losses. The size of loss will vary between different businesses of course. Whether the losses are material or not for your business, will never be known if your do not seek to measure them.
The cost of Inefficiency includes lost sales through invoices being cancelled because they were received outside the customer’s guidelines, a lack of product or delivery of services, customer alienation, bad or incorrect stock supplied etc.
There are also losses from the costs of sales to bad payers and fraudsters due to a lack of proper due diligence, failure to follow up the unpaid invoices in a timely manner, lack of response to customer enquiries for invoice or statement copies etc.
In addition, and not least, there seems to be some belief that writing off bad debts is not an expensive exercise. The thinking behind these thoughts is that the majority of the money has already been lost and any further action is a further waste of time and money.
Unfortunately, when you write off a debt, not only do you lose the dollar amount of the invoice, you also bear the added costs of contacting the debtor for payment and the costs of actually approving and writing off the debt. These costs can be greater than the original debt.
So many costs, so often not measured. As Peter Drucker said, "you can't manage what you can't measure."
By not measuring the costs of inefficiency, there is little embarrassment for management because there is no exposure of these losses. The financial records will still show whether a net profit or loss occurred. However, there will be no visible evidence of the impact of specific inefficiency losses to the net figure.
There is also little thought on improving the efficiency of the business to reduce any exposed costs caused by inefficiencies. Yet losses are being incurred and there is no way to tell if by spending money to save the money lost and to increase profits, would be effective.
As this month’s quote shows us, just because there is no evidence of loss, does not mean there is no loss. We just have to be brave enough to identify the loss so we can take proactive action to save on costs. Effectively of course, the saving of costs pays for the actions required to reduce it, and to see profits increase accordingly.
The greatest costs and energy sapping problems in business today are government red tape and legislation.
It is almost getting to the stage where most of a business person’s life seems to be fulfilling legal obligations rather than actually doing any business.
The problem is if you don’t play the bureaucratic game, you can be heavily penalised and perhaps lose your business. In the old days, some business people played the game of avoidance and just walked away from their business if caught out. This is no longer possible with new regulations and penalties for not meeting your commitments.
Unfortunately, there will always be those business people which ignore red tape and legislative requirements. By ignoring these imposts and costs, they are operating on a cheaper basis than responsible business owners. The honest and ethical business owner is meanwhile penalised for doing the right thing.
The conundrum all business owners face is whether to honour regulations and legislation, or ignore them. Those business owners which do the right thing, hope that their customers appreciate paying a fair price for quality. The alternative is for those customers which go for the cheaper price is, they will suffer the negative consequences which come from dealing with the less responsible business person.
Dealing with difficult or slow-paying customers is not smart business, unless you can prove you are earning a good NET profit.
So desperate are some business people for sales, they persist in dealing with difficult and slow-paying customers without proving whether their business is actually making any profit from the trading relationship. Long term, this business practice will break the bank and put your business, out of business.
I accept there are many ways to make profit by selling to difficult and slow-paying customers. The problem I have, is that I have never seen a NET PROFIT REPORT relating to these customers which proves a profit was made and from what sources within the supplier’s business.
At the end of the day, again, apologies to cat lovers, there is more than one way to skin a cat. There are likewise many strategies that are available to help create a profitable business. One of which is; if your business can prove that it actually makes a profit from dealing with difficult and slow-paying customers, well done.
On the other hand, if a net profit cannot be generated by any of your strategies, another strategy is, to “encourage your customer to buy from your best competitor.” After all, if your business cannot generate a net profit from these customers, it is likely neither will your competitor.
Is the spelling “awhile” or "a while"?
Both the spelling ‘awhile” and “a while” are correct. Both mean a period of time. The spelling to use depends on usage. The spelling “awhile” is for an adverb and “a while” for a noun.
An adverb needs a verb, that is a doing word.
Can we stay awhile?
Stay is the verb and awhile is the adverb.
Can we stay for a while?
While is a noun as a period of time, such as an hour or a day.
If you’re struggling with which one to use, a technique that can be useful is substitute a noun such as “day”. The noun “hour” isn’t good as then you’d need to use the word “an”.
Can we stay day. This makes no sense, so “awhile” is correct.
Can we stay for a day. Makes sense, so “a while” is correct.
Often in situations like this where usage can be confusing, it may be useful to consider rewriting the sentence, if that makes your life easier and helps your reader.
Updates courtesy of www.asic.gov.au
30 October 2018
Mr Samuel Tessa of Elwood, Victoria, has been committed to stand trial on five counts of dishonestly obtaining a financial advantage by deception. This follows a contested committal hearing in the Melbourne Magistrates' Court that concluded on 18 October 2018.
It is alleged that Mr Tessa dishonestly obtained money from individuals or businesses on the pretence that it would be used to pay insurance premiums when no insurance policy was in fact taken out.
The businesses targeted by Mr Tessa are located in Melbourne and provide automotive repair services.
Mr Tessa entered a plea of not guilty and was granted conditional bail.
The trial will be held in the County Court of Victoria and is listed for two weeks commencing on 25 November 2019.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
31 October 2018
Former financial adviser and accountant, Satvir Singh Birk, of Reedy Creek, was today sentenced in the Southport District Court to two and a half years imprisonment, following an ASIC investigation.
On 25 May 2018, Mr Birk, aged 42, pleaded guilty to five counts of dishonestly using his position as director of The Carter Group with the intention of gaining an advantage, for himself or others, in the amount of approximately $800,000 (MR16-216).
The charges relate to conduct between September 2010 and October 2011, while Mr Birk was an authorised representative of Professional Investment Services Pty Ltd (PIS) and a director of the Carter Group (now in external administration) which was a corporate authorised representative of PIS.
05 November 2018
A Melbourne-based financial services and credit business has been ordered by the Federal Court to pay penalties of $8,980,000 in total after it engaged in numerous contraventions of financial services, credit and consumer protection laws.
Financial Circle offered personal loans to consumers of up to $5,000 that could only be obtained if the consumer agreed to receive and implement financial advice. The advice typically recommended purchasing personal insurance products and switching superannuation providers.
When consumers implemented the advice, significant advice fees were paid to Financial Circle directly from the consumer’s superannuation. Financial Circle also received ongoing commission payments from the insurers. This process often resulted in a substantial erosion – in many cases up to 30% – of the client's superannuation balances.
07 November 2018
Mr John Lindsay Merity, of North Nowra, New South Wales, has pleaded guilty before the District Court of New South Wales to charges of giving false or misleading information to ASIC about shareholding.
The charges were brought following ASIC enquiries in 2009 and 2010 to identify those parties who had a relevant interest in 17,376,120 shares in Northwest Resources Limited (Northwest) that were held by Craigside Company Ltd (Craigside) and Broome Enterprises Ltd (Broome Enterprises). Both Craigside and Broome Enterprises were companies incorporated in the British Virgin Islands and operating from Hong Kong.
08 November 2018
Local Appliance Rentals (LAR) has paid $257,500 after ASIC identified concerns regarding LAR meeting its responsible lending obligations and its supervision of franchisees.
LAR provides consumer leases nationally through a franchise model, including in regional and remote areas of Australia such as the Tiwi Islands, Katherine, Broome and Thursday Island which have a high Indigenous population and limited options for purchasing household goods. LAR mainly leases household goods to low-income consumers, including those who receive payments from Centrelink.
08 November 2018
Mr David John Leigh, 56, of Sherwood, Queensland, has been committed by the Brisbane Magistrates’ Court on fraud charges and will be sentenced by the Brisbane District Court following an investigation by ASIC.
ASIC alleges that between 25 July 2017 and 9 November 2017, Mr Leigh, as the co-liquidator of Neolido Holdings Pty Ltd (Neolido), dishonestly redirected $800,000 from the Neolido external administration bank account into a bank account that he controlled. Mr Leigh then used the funds for his own purposes.
Mr Leigh, after formally entering a plea of guilty, was committed for sentence before the Brisbane District Court on a date to be fixed in relation to three counts of fraud under section 408C(1)(D) of the Criminal Code 1899 (Qld).
19 November 2018
The Australian Securities and Investments Commission (ASIC) has issued civil penalty proceedings in the Federal Court of Australia against former Tennis Australia Limited directors, Harold Charles Mitchell, of Melbourne, and Stephen James Healy, of Northbridge, New South Wales.
ASIC's case relates to a decision made in 2013 by the Tennis Australia board to award the domestic television broadcast rights for the Australian Open tournament to the Seven Network for a 5-year period without a competitive tender process.
ASIC alleges that both Mr Mitchell and Mr Healy:
•withheld material information from the Tennis Australia board when it made its decision to award the domestic broadcast rights
•failed to ensure that the board was fully informed about the value of the rights, the interest of parties other than the Seven Network in acquiring those rights and the best method of marketing them
•failed to advise the board that Tennis Australia was likely to obtain better terms by putting the rights out to competitive tender
•failed to ensure that a sub-committee, that had been appointed by the board to advise it about the granting of the rights, carried out its functions.
theBankDoctor offers free banking and finance advice to help small business owners get the best business banking set-up.
20 November 2018
This is a feature from The Bank Doctor's Resource area which may be of value to SME's looking to grow their business.
Many small business owners don’t fully understand the difference between debt and equity funding. Financing your business with debt as distinct from equity has significant implications which you need to fully understand. This table highlights the key differences between debt and equity.
31 October 2018
This is a joint media release between Thailand's Anti-Money Laundering office (AMLO), Indonesia's financial intelligence unit (PPATK) and AUSTRAC.
The fourth Counter-Terrorism Financing (CTF) Summit will be held in Bangkok, Thailand from 6 to 8 November 2018.
The Summit will bring together over 350 global leaders and specialists in financial intelligence together with senior representatives from regulatory, law enforcement, national security and policy agencies, industry participants and academics.
The CTF Summit is recognised globally as a leading example of multilateral cooperation focused on understanding and responding to terrorism financing and significant financial threats.
08 November 2018
AUSTRAC continues to build its global network of financial intelligence capability with the appointment of the first ever AUSTRAC financial intelligence analyst to be posted in China.
Announced by the Minister for Home Affairs Peter Dutton at the 4th regional Counter-Terrorism Financing (CTF) Summit in Bangkok this week, the analyst will be based in Guangzhou, in the southern province of Guangdong, from December this year and will work closely with China’s financial intelligence unit (FIU).
AUSTRAC CEO, Nicole Rose PSM said that the posting represents a significant boost to Australia’s intelligence capability in the region.
20 November 2018
As required by legislation, an independent review of AUSTRAC’s industry contribution levy has commenced.
The review is being undertaken by Acacia CRE Pty Ltd.
An issues paper has been published on the Acacia CRE Pty Ltd website.
Written submissions should be sent to Acacia CRE Pty Ltd by midnight on 21 December 2018 to:
Protected Disclosure Coordinators are invited to attend a Protected Disclosure Community of Practice workshop on 26 November 2018 from 9.15am to 11.30am in Melbourne.
This two hour workshop will include insights into a risk management approach to handling protected disclosures, a protected disclosure case study, and plenty of opportunities to ask questions, discuss approaches and network with your peers.
View the program
This event is designed for Protected Disclosure Coordinators and others responsible for supporting protected disclosures in the Victorian public sector (including state government departments, agencies and local councils).
If you would like to participate in this workshop via online webinar, please contact firstname.lastname@example.org.
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.
Register your interest
IBAC looks forward to welcoming delegates and others to Melbourne for APSACC 2019.
15 November 2018
More than 70 public sector employees gathered in Ballarat today to discuss potential corruption risks their organisations could face and how to prevent them, at a forum organised by Victoria’s independent anti-corruption body, IBAC.
Public sector CEOs, managers and senior staff from local councils and state government agencies in Ballarat and surrounding areas attended.
24 October 2018
We have prepared guidelines to help businesses and their advisers understand the provisions relating to merger authorisations, and how the ACCC proposes to assess applications for merger authorisation under the new test.
These guidelines have been updated following consultation.
24 October 2018
This publication provides guidance to the business community, their advisers and the public about the ACCC's procedures and approach in exercising its legal powers under section 155 of the Competition and Consumer Act 2010 to obtain information, documents and evidence in carrying out its functions.
16 November 2018
ACCCount details the ACCC's activities in the enforcement of the Competition and Consumer Act 2010, merger reviews, compliance actions, adjudication issues, economic regulation and international involvement.
05 November 2018
Australia’s largest ever recall is now well underway with new figures released today detailing the first quarter of compulsory Takata airbag replacements under the Mandatory Recall Notice issued by the Australian Government.
More than 350,000 faulty Takata airbags were replaced in the quarter following 1 July 2018, equal to more than 3,000 replacements each day.
Some 2.5 million faulty Takata airbags have already been replaced in around 1.6 million vehicles to date, since the start of voluntary recalls in 2009.
09 November 2018
The ACCC has instituted Federal Court proceedings against Productivity Partners Pty Ltd, trading as Captain Cook College, alleging systemic unconscionable conduct in breach of the Australian Consumer Law.
The ACCC alleges that from 7 September 2015, Captain Cook College removed consumer safeguards from its enrolment and withdrawal processes for online courses to improve its financial performance.
“We allege that Captain Cook College engaged in systemic unconscionable conduct designed to maximise profit at the expense of their students,” ACCC Commissioner Sarah Court said.
“We are very concerned by Captain Cook College’s decision to make process changes that we will submit removed consumer safeguards. We allege that this significantly reduced the College’s ability to detect misconduct by its sales agents and assess a consumer’s suitability or participation in the course they had been enrolled in.”
“We further allege that the removal of consumer safeguards increased the number of students that Captain Cook College enrolled and who remained enrolled, allowing the College to increase VET FEE-HELP payments from the Commonwealth,” Ms Court said.
12 November 2018
The Federal Court today dismissed an application by Moses Obeid for leave to appeal the Court’s earlier refusal to grant a suppression order over part of its reasons in an alleged bid rigging case brought by the ACCC.
On 6 July 2018 the Federal Court dismissed proceedings brought by the ACCC against 11 respondents for alleged bid-rigging conduct. These proceedings related to the 2009 tender process conducted by the then NSW Department of Primary Industries for exploration licences over the Mount Penny and Glendon Brook coal tenements in the Bylong Valley. One respondent, Loyal Coal Pty Ltd (Loyal), admitted liability before the trial took place.
The ACCC filed an appeal from that judgment on 3 August 2018. This appeal is yet to be to be heard.
On 6 July 2018 Moses Obeid also sought a suppression order over part of the Court’s reasons.
This application was refused by the Court but in the meantime part of the reasons have remained the subject of interim suppression orders pending resolution of an application by Moses Obeid for leave to appeal that decision.
The decision of the Court today means that the judgment of 6 July 2018 is no longer subject to any suppression order.
Catch 22 is not only a great read, it also provides us with messages about organisational behaviour.
Heller in his book introduces us to stories such as Milo the quartermaster in Chapter 24 who becomes the outsourcing master, the promotion of Major Major to Major even though he was totally unfit for the rank of Major and other interesting stories of human behaviour in an organisational setting.
I am not the only person who believes that Catch 22 provides different concepts of organisational behaviour. Daniel Swift's article which can you access here at https://www.newstatesman.com/books/2011/07/vietnam-war-novel-catch-heller also offers interesting insights.
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.