Late Payment - A New Directive - Same Old Result?

On the 20th of October the European Union voted in favour of a new Directive intended to combat late payment in commercial transactions within the Union. This Directive will replace the existing Directive (2000/35/EC).

Obviously, the intention of the new Directive is to ensure that suppliers are paid on time for the goods and services they supply. This is exactly what the existing Directive (2000/35/EC) was intended - and failed - to achieve.

Todays' copy of the Malta Business Weekly contains an article by Josef Busuttil FICM entitled 'Legislate or Educate?' Mr Busuttil believes that the new legislation will fail - and I agree with him. However, I cannot agree with his argument that 'education' is the answer.

It is a commercial reality that large companies are capable of exercising a great deal of power over small suppliers and can afford to dictate their own terms - and that any attempt by a small supplier to override those terms can result in that supplier being 'delisted'.

It is a commercial reality, too, that the only exceptions to that very unfair fact of life are small suppliers of products that large companies would find it difficult or impossible to obtain from any other supplier - and I think here in particular of specific brands of champagne or other 'luxury' goods.

Neither legislation nor education can succeed in changing this situation where a climate of fear exists, and - unsurprisingly - such a climate does exist.

Legislation certainly allows suppliers to complain of treatment that is, effectively, illegal, but few if any of them are prepared to risk the consequences of making a complaint and, whilst that is the case, large customers will remain ineducable.

SMEs and Social Media - Vital or Useless?

The Forum of Private Business has recently published the results of a referendum themed around electronic technology and social media.

The results are very interesting: 52% of the members polled used social media like LinkedIn, Facebook and Twitter - but only 7% described it as 'very useful' for their businesses. Moreover, over half of the 52% of members polled expressed serious doubts about the value of popular networking sites - and 6% went so far as to describe them as 'useless'.

The problem is, of course, that whilst electronic technology and social media can potentially be enormously valuable marketing tools, you only get out what you put in - and what you need to put in is a lot of time.

• Websites, for example, are wonderful things, and I tend to believe that every business should have one - but they are never really finished: they need to be updated regularly.
• It takes time to build a profile on LinkedIn - or any other social networking site - and the work there is never really finished either, because it's essential to advertise yourself and your business by updating your profile and letting people know 'what you are doing now' as frequently as possible.
• People who Tweet every five minutes are an awful nuisance, but you can learn a lot from people who Tweet responsibly - and people can learn a lot from you if you do likewise.

The Forum didn't include 'blogging' in its referendum, but blogs are a excellent marketing tool, too - and they cost nothing.

The use of electronic technology and social media can give any company - however small - a very high profile and pull in a lot of business, so it's worth taking the time to learn how to use them - and then taking the time to use what you have learned side by side with traditional trading methods.

SMEs - Suddenly Everybody Loves You?

I received an e-mail last Friday from British Airways. It introduced 'a new forum for small business experts worldwide'.

The new forum is called the 'Face-to-Face Business Connection Hub - Innovation Discussed, Experience Shared, Growth Inspired' - and it consists of a series of blogs, and something called "The Face of Opportunity Contest".

I don't propose to comment on the blogs. You can read them yourself at British Airways - Be There Face to Face if you want to, but you will almost certainly find that you've read it all before (and better) elsewhere.

The contest, though, is interesting - or at least will be for British Airways if you really do (as they strongly suggest you should!) "Share your submission with your networks, friends, and colleagues and remind them to vote" in an effort to win, because if enough people do that, it will net BA a mailing list that will be far and away more valuable than the free flights they are offering as prizes to 250 successful contestants , thank you very much.

Some very unpleasant words - like 'opportunistic', 'cynical', 'exploitative' and 'bandwagon', for example - sprang to mind as I read my way through this beautifully presented (and almost certainly very expensively produced) piece of work, but what struck me most was how out of touch with reality it was, not just for SMEs, but for people in business generally in the present economic climate.

The fact is that 'face-to-face' - or at least 'face to face and in the flesh' - is a gone goose for practically everyone if it means travelling long distances and paying for meals and an overnight stay. And who needs 'face-to-face and in the flesh' anyway? Conference calling and video conferencing have made travelling from Halifax to Bolton unnecessarily expensive in time and money, never mind flying 'from London to NewYork and beyond'.

Take a look at the conferencegenie and you'll see what I mean. You can do 'face-to-face' quite cheaply - and much more comfortably! -from your office or your home, simply by taking advantage of this easily accessible technology.

Dealing with Debtors Who are Playing the System

Now that the normal collection techniques that served everyone so well in the past have become so expensive, it has become very difficult to deal with recalcitrant commercial debtors who are playing the system - banking, in fact, on the fact that the expense of using the Courts in the UK is a non-starter for any creditor who is looking for anything less than £10,000, and that chasing debts abroad (even within the EU) can be extremely time-consuming and difficult.

There is a potential - and relatively inexpensive - solution to this problem. Actually, there are two potential and relatively inexpensive solutions to this problem, and both rely on the fact that businesses need access to credit to survive.

Credit Reporting Agencies -like Equifax or Experian, for example - have enormous clout these days, and although using their services isn't free, it can still be cheaper and more efficient than using the Court system because, effectively, Credit Reporting Agencies can cause the 'credit well' to run dry for non-paying customers who are 'playing the system' in the hope that creditors will simply give up, write off the debt, and go away.

I was particularly interested, for example, in the Delinquency Notification Service that Experian operates under the name of Business Credit Information Inc . The service acts like a simple letter collection service - but it makes the long price of non-payment very, very clear indeed.

And then, of course, there are Credit Circles - both formal and informal. The Office of Fair Trading has laid down certain Rules govern the activities of members of formal Credit Circles in the UK, but there is nothing in those rules that forbids members naming defaulting customers or giving chapter and verse as to the nature of the default - and no Rules govern the purely informal conversations that go on as a matter of course between credit personnel who happen to be working in the same trade. Credit Circles, too, can make the 'credit well' dry up.

Different times demand different techniques. I think that these can be very powerful and persuasive ones.

A Utility Companies' Credit Circle?

According to Credit Today, Max Griffiths, the head of credit risk at British Gas Residential, has apparently suddenly realised that sharing customer data early is a more effective way of getting paid in the short term - or at all! - than trying to collect a debt later on.

And I couldn't agree more. The question here, though, is - sharing with whom? And how, and to what extent?

Mr. Griffiths, speaking at the Credit Today Utilities Conference in Manchester, talked about 'accessing external credit data', but I have to say that the article published in Credit Today's on-line news gave me the distinct impression that the 'external credit data' he was talking about was that collected by other utility companies rather than the standard credit data collected by, for example, a credit reference agency.

Mr. Griffiths did acknowledge that all utility companies were obliged to use customer data correctly - but added that there was a lot a value in finding out how customers were behaving 'elsewhere'. And where, exactly, is 'elsewhere'?

Is Mr. Griffiths really contemplating a gigantic utility-based credit circle? And if he is, does he contemplate that circle abiding by the strict rules that govern all credit circles?

I can visualise the credit circle. It's the circle obeying the rules that I'm having a problem with.

Sales and Credit - What Happened to the Rapprochement?

When a Sales Department is in the driving seat and has the bit firmly between its teeth it can, frankly, drive any Credit Department (and me!) into the ground and up the wall.

I've heard and read a lot over the last year or so about the new 'cordial relationship' that was supposed to be developing between these two opposing factions - and I have to say that I had great hopes that there would actually come a time when each would truly understand the motives and aims of the other and make appropriate allowances accordingly.

Sadly, having spent the last two weeks chasing really quite piddling sums of money owed by very large companies to other very large companies - and, of course, listening carefully (and attempting to comply!) with the urgently expressed desires of both Sales and Credit as to my conduct whilst doing so - I don't believe that my hopes are likely to be realised in either the short or the long term.

I managed, at the end of the day, to do a reasonably good job all round without upsetting anyone's Sales Department or (heaven forbid!) anyone's customers - but I was left with the feeling that neither one was behaving very sensibly.

Surely it isn't difficult for any Sales Department to understand that nothing is sold until it is paid for, and if a great many things are not paid for then cash flow will suffer.

And surely any Company, however large, must be aware that a whole series of unpaid debts - however small each of those debts happens to be - is going to put up a red flag somewhere and cause a potential credit problem someday.

TGIF!

Free Events from the FPB - and Free Advice from Creare Design

The Forum of Private Business is hosting a series of free breakfast networking events featuring Creare Design , a web design and search optimisation company.

The events are being held at various locations around the country, will take place between 8:00 and 10:00 a.m., and are designed to help SMEs boost their on-line business profile. You can check on dates - and reserve your place (or places!) - on the Forum's site.

Considering the importance of an optimal on-line presence these days, it would be worth travelling to your nearest venue to take advantage of any advice you can pick up from Creare. We have rather arrived at the point where a business without a website is automatically 'written off' as a non-starter by many potential customers - and it is, of course, very important that a company's website is capable of attracting new customers, and doesn't just get lost in the huge world of the world-wide web.

Two hours is not a lot of time to get to grips with getting the best out of your own particular www dot co dot uk, but it's better than nothing - and it's free.

Never Be Your Own Lawyer

Years ago, when I was working for Harry Goodrich, Harry got involved in a case against him that would have best left to someone else to deal with. I could say a lot about Harry, but the only thing I need to say here is that he was an excellent Solicitor and that acting as his own lawyer ruined him.

Like 'do-it-yourself' credit management, 'do-it-yourself' debt collection is something that anyone can learn. The principles are relatively simple; there are numerous relatively simple books to learn from - and a glance at Amazon.co.uk shows that people are buying those relatively simple books in relatively large numbers because they can and want to learn, and because self-sufficiency is very satisfying as well as being much cheaper than relying on somebody else.

This blog - like those relatively simple books - has always been about doing things yourself, and I am a great believer in self-sufficiency, but I have to say that there are limits to DIY. It's important to recognise them.

The Workplace Parking Levy

Let's ignore for the moment all of the reasons put forward in support of the Workplace Parking Levy and the arguments against it, and concentrate on a single - and very important - question.

Can such such a tax be legally imposed on private land, whether Leasehold or Freehold, that is the property of a business that had planning permission to provide parking for its customers and staff when it entered into a contract to purchase or occupy the land and the buildings thereon, if any?

I am no expert at Conveyancing - in fact I always disliked Conveyancing very much, and my memory of whatever I was once forced to learn of it is therefore extremely vague - but it seems to me that if there were to be a legal right to impose such a tax on land the property of a business, then a legal right to impose the same tax on land the property of private individual would necessarily ensue. That would, of course, result in everyone unfortunate enough not to own a garage having to pay to park their vehicle in their own (already heavily mortgaged!) driveway.

This Levy has been nicely wrapped in 'green', environmentally pleasing phrases, but when one takes off the pretty paper, I fear that one will only find a dangerous little stealth tax lurking in the box.

And How is Your Bank Treating You These Days?

The Forum of Private Business is hosting a questionnaire on behalf of the Office of Fair Trading in an effort to find out whether SMEs are being denied credit without a valid reason - or are, in the alternative, being offered credit at extortionate rates - by banks and other financial institutions that seem to have become increasingly 'risk averse'.

The survey covers a range of banking issues, takes only a few moments to complete, and is completely confidential. It is open to all SMEs, and can be accessed at www.bit.ly/cPVVcf

The Forum hopes that as many SMEs as possible will take part in this survey - and, indeed, it would to be advantageous to business generally if there were a very large response to it.

Lending fell again in July. Banks and their industry groups are claiming that lending is down because demand is down, and claim that they are doing everything they possibly can to increase the flow of finance to business. This survey is part of an ongoing process to discover whether that is - or is not - the case.

We have most of us, I think, had cause to complain at one time or another about the abitrary - and sometimes incomprehensible - behaviour of the financial institutions that are an unavoidable part of being in business, but we have never before had the opportunity to actually make a complaint.

Don't waste this chance! The next one could be a long time coming.

And I'm Afraid it's Back to Dear Old Gulza Dean

If you've been following this saga, you'll know that I received a letter from Mr. Dean, and that I reported its contents to Action Fraud. You might also know that one or two other people received identical letters, and commented on them here.

I received an e-mail today from Action Fraud, and I'm copying it here in full so that if you have received a letter from Gulza Dean, you will know what you can do about it:

Fortunately, as you have not responded to this e-mail/letter, you would not be classified as a victim or even intended victim of this fraud. You will have received what is known as a mass mailing of this letter. Copies of this email/letter will have been sent to hundreds, if not thousands of people, on the off-chance somebody will respond.

In this instance, this fraud would be better reported to Consumer Direct who could then use this information to gauge the scale of the e-mails/letters being distributed. Consumer Direct can be contacted by telephone on 0845 404 0506, opening times are 8am- 6:30pm Monday – Friday, 9am – 1pm Saturdays and their website address is www.consumerdirect.gov.uk.

I live in France. One of the other people who received a letter from Mr. Dean and commented on it here lives in the United States. I think, therefore, that the number of letters (or e-mails) being distributed is probably very large indeed.

I appreciate that it can very onerous to take the time to report things like this - and I know, too, that in most cases the letters will hit the bin and no one will be the worse for it. But most cases are not all cases. As I have said before: nobody spends this much money if they don't expect to get something back. Someone somewhere is going to fall for this scam - and therefore something needs to be done about Mr. Dean.

Please do get in touch with Consumer Direct if you have received a letter from Gulza Dean about anything at all - and please don't be concerned that Consumer Direct is situated in Britain if you are living in another country. According to the letter I received, Gulza Dean (or someone acting on his behalf) is also situated in Britain...

How Safely Are You Trading?

Coface UK has designed an on-line Quick Credit Management Health Check .

It's a 'tick the box' questionnaire that asks the right questions. It doesn't ask all the right questions - and it's certainly looking for information about the companies that complete it - but then one would expect that of an on-line questionnaire.

The important thing about this 'credit management health check' is that the first paragraph (which isn't part of the questionnaire at all, really) asks "How safely are you trading on credit terms?" Which is, of course, the most important question of all.

Good credit management policies and procedures have always provided a 'security blanket' for companies wise enough - or perhaps stubborn enough or brave enough! - to insist upon using them.

I regularly receive instructions from credit controllers who do their best to work in an environment where selling goods or services is an overriding imperative, and management seems incapable of recognising that nothing is sold until it is paid for, and that everything that is sold needs to be paid for within a specified period of time. And, moreover, that it isn't wise - in the long run - to pander too much to big clients.

Fill in the form - or just look at the questions, and think it out for yourself. How safely are you trading, really?

The 'Gulza Dean' Scam

A few days ago I wrote about a letter I'd received from a Mr. Gulza Dean. The post was entitled 'A New Slant on a Very, Very, Old Scam'.

I've since heard from two other people who have received what they believe to be 'identical' letters - but I can't get in touch with either of them to find out whether the letters were truly identical or not.

If you are reading this Christian, or Volley911Girl - what were the telephone numbers you were given in your letters, and where were the letters posted?

I had one telephone number and one mobile telephone number. The land line was a London UK number. The letter was posted in London.

This is important, because I reported the fraud to Action Fraud . Please contact Ashley Grand at actionfraud@bss.org as soon as possible to let Action Fraud know what telephone numbers you were given, and where your letters were posted. This will give Action Fraud a chance of finding out whether Mr. Dean is working alone or as part of a group - and perhaps a chance of putting a stop to Mr. Dean's latest activities.

Don't send the numbers to me. Send them to Ashley Grand.

In the meantime: Google 'Gulza Dean'. You'll find the results interesting.

And, by the way, before you decide not to get in touch with Ashley Grand and put the whole matter out of your mind - bear in mind that nobody spends this much money on postage if they don't expect to get anything back. We didn't fall for the scam. Someone else is going to.

The Spending Challenge

If you haven't received an e-mail from David Cameron about The Spending Challenge - or you don't know about The Spending Challenge - take a look at the Spending Challenge site.

The Government wants your views on public spending - and how cuts can be made fairly and responsibly.

The Spending Challenge is a big site. It could take you some time to explore it - and a lot more time to think about what you want to say. But please don't miss this opportunity to put in your two-penny worth.

It isn't often that the Government asks you for your views as to how your tax money should be spent, or invites you to comment on the waste of public funds. Actually, it's unprecedented for the Government to ask your opinion about anything at all.

One could be quite cynical about the whole Spending Challenge project - but I think that would be a mistake. Let's take the project at face value instead, look at it, think, and put forward whatever ideas we have.

And wait to see what comes out of it at the end of the day.

A New Slant on a Very, Very Old Scam

I received an extraordinary letter today.

It came from someone called Gulza Dean, who described himself as an 'Attorney at Law', and gave himself out to be of 'Docklands, London'. There was no address on the letter - and sadly, as Royal Mail seems to be saving on ink these days, I can't tell you where the letter was posted. I can, though, tell you that it cost Mr. Dean 60 pence to post it to me.

Mr. Dean wanted to speak to me - actually quite urgently - in his capacity as the personal attorney of Mr. Leo Metliss whom, he advised me, died in a train crash at Ladbroke Grove near Paddington on October the 5th, 1999.

The late Leo, according to Mr. Dean, died possessed of some Eight Million, Three Hundred Thousand Dollars. A nice round sum.

Mr. Dean (who apparently does not have access to a London telephone directory) wrote that he had been searching without success for many years to find someone to whom to give the money - which is apparently shortly due to be 'confiscated' by the bank should he fail to provide 'Notice of Next of Kin' within a very short time.

He did not, of course, specify which bank was about to take this very peculiar (and illegal!) step.

On the other hand, though, and on mature reflection, Mr. Dean did offer to share the Eight Million, Three Hundred Thousand with me. Well - once we had worked out 'the sharing ratio' and the 'modalities for transfer'.

If I use all my fingers and toes - and perhaps one or two of my wife's fingers and toes - I can account for every living Metliss. I can also account for every single 'Metliss' who is, sadly, no longer with us. There is not, and never was, a 'Leo Metliss'.

I would have written this letter off as a joke in bad taste were it not for the reference to the Ladbroke Grove Train Crash. As it is, I don't think I can. I don't know where this man found me - but I don't want him targeting the families of people who really were almost at Paddington in October 1999.

At Last - A Budget That Recognises The Importance of SMEs

A lot of people are not going to be very happy about the Budget - but I think it has given SME's a lot of reasons to celebrate.

A 1% cut in small companies' tax; a £5 million threshold for entrepreneurs' relief on capital gains tax; measures to extend the Enterprise Finance Guarantee scheme (look for more information under the 'Policies' tab); the abolition of back-dated business rates; the limit to rises in National Insurance Rates, and continued tax breaks for holiday lettings all demonstrate the new Government's appreciation of the needs of SMEs and the issues that most concern them.

And, of course, there are plans to review all workplace legislation - which will come as an enormous relief to people who have had to spend huge amounts of time (which could have been more productively spent elsewhere!) trying to understand and implement it.

The rise in VAT is not, of course, such very good news - but the money to cut the deficit has to come from somewhere, and a rise in VAT is surely a better option than a rise in other taxes, or further cuts in public spending.

Altogether, and considering everything, it's not too bad at all - and the Forum of Private Business will be lobbying the government to ensure that the ‘fuel price stabiliser' that Mr Osborne referred to will become a reality. Let's hold on to that one! Petrol and diesel prices have been far too high for everyone for far too long.

It Pays to Network - And Not To Be Too Parochial When You Do It

A couple of weeks ago I got an invitation to join Referral Key from a woman called Michelle Gatewood.

Michelle used to work in the credit industry in Europe, and I originally 'met' her, so to speak, through LinkedIn, but a little while ago Michelle relocated back to the United States, took a job with ACE Adjustment Service, Inc. in West Virginia, joined Referral Key, and immediately began to ask other people to join that network as well.

When I first saw the invitation I was a little bit doubtful as to whether Referral Key - an wholly American networking system - was going to be of very much use to me -and frankly, filling in yet another networking profile wasn't a very appealing prospect. But in the end I joined, filled in the profile, and invited everybody I knew - and I'm glad I did, because I immediately got a job out of it.

It is a laborious job to join networks, fill in profiles, and keep them up to date, but the fact is that those network profiles are really free advertisements for you and your company. They link to your website and your blog. They put you in touch with other people, and other people in touch with you.

It really doesn't matter whether the business network is or is not based in your home country, because it's going to do the same good job of pushing your name about - for free! - wherever it happens to be.

Referral Key is not - at the moment - as sophisticated as LinkedIn, but it's growing very fast, and it will improve as time goes on. And America is a huge market.

You should network - and you shouldn't be too parochial about where you do it. It's a small world that's getting much smaller, and clients and customers can come from anywhere at all.

Bad Man Management

I've been watching with great interest the unfolding drama surrounding Nicholas Anelka, Raymond Domenech, the French team, and just about everyone else who knows Nicholas Anelka.

I found it particularly interesting that John Terry spoke out to defend his Chelsea team-mate. Terry described Anelka as a very quiet man who had been in the game for a long time and who knew his football. He also said that if Anelka had something to say to him he would stand up and listen.

What a pity it is that so many businesses in the UK are treating their credit staff exactly as Domenech has treated Anelka, and are getting rid of them when they need them most. And how sad it is that they are failing to listen to people who have been in the game for a long time, and who know all about credit management, and all about the quiet people who have also been in the game for a long time and know all about credit management, too.

Failing to put key players where they are going to do their best for you is bad man-management. Failing to listen to them - or people like them - is not too clever. Just at this moment, getting rid of them is downright stupid.

Fraud Again - But Much Bigger This Time

Fraudsters have been targeting wholesalers and distributors of IT, photographic and communications equipment, commercial cleaners, kitchenware and, more particularly, wholesalers of wines, spirits and whisky across the UK. In some instances, whisky has been obtained directly from the distillers.

This is a very sophisticated and well-organised fraud:

• The fraudsters assume the identities of actual employees of nationally known companies.
• They research and discover the details of that company's bank.
• They research and discover that company's suppliers.

Then, using e-mail addresses that closely resemble those of the employees whose identity they have assumed (and freephone telephone numbers!) they target specific suppliers, fill in Credit Application Forms for credit terms ranging between £300,000 and £500,000 and 'lean' on members of the Finance Department of the targeted supplier to supply goods for a promotion, a celebration or an initiative within a limited period of time.

And they imply that they will take their business elsewhere should the supplier refuse credit, or fail to supply the goods on time. As people do...

Given the use of genuine and known names, and the almost accurate e-mail addresses that look so right (and, of course, the implied threat that a supplier might be 'delisted' by an important customer!) credit agreements tend to be signed off, and the goods are delivered within days.

And then it's 'Goodbye to All That'.

There is no doubt that the individuals involved in this particular fraud understand very well how business works so far as national and multinational companies are concerned. I can therefore only suggest that suppliers treat any new Credit Application from any customer - however well known - with extra care.

Don't take anything for granted.

It would be wise to telephone any Company applying for credit using a telephone number that you have used in the past and have on record in order to check that applications are genuine. If you have no telephone number - which is unlikely - use directory enquiries to get one. DON'T use e-mail. You need to speak to a human being - and to know that that human being really is who he or she purports to be.

And, of course, if you get a fake application - call the police immediately.

Detective John Lonsdale on 0161-856-6551 will be particularly interested to hear from you. You can safely e-mail him at john.lonsdale@gmp.pnn.police.uk. I believe that he's in the Serious Crime Division in Manchester - but don't worry if you are a long way from Manchester. Crime tends to travel well. I'm sure Detective Lonsdale would be pleased to hear from you wherever you happen to be.

If You Are a Small Service Provider - Beware of Predators

There are small businesses and very small businesses and one-man-bands. Very small businesses (and one-man-bands) tend to be service suppliers.

My wife received a post via a Hypnosis and Hypnotherapy Group on LinkedIn today. Most people in that Group are - obviously - small service suppliers or one-man-bands.

Someone in Amsterdam called a member of the Hypnosis and Hypnotherapy Group who works in Rhode Island. That someone asked to book ten hypnotherapy sessions.

The therapist quoted $850 for ten sessions. He received cheques totalling $3,000.

The therapist then obviously e-mailed the 'client' to say that he had been overpaid.

The 'client' said that it was an error on the part of his US agent, and asked the therapist to bank the cheques, subtract the $850 and send the remainder to his travel agent - and gave full details of where to send the excess cash.

Fortunately, the therapist waited for the cheques to clear before sending any money to the 'travel agent', because the cheques were drawn on a ficticious account, and they all bounced.

The therapist in question believes that his 'client' may be targeting therapists, and very rightly posted on LinkedIn to warn whomever he could, as best he could.

My wife is certainly a therapist, but she worked in the credit and collection industry for many years, and I've never known her to be a fool. She believes that this person is likely not working alone and may target any small service provider - not just in the United States, but anywhere at all - and I think she's right.

And we both think that whilst this scam is amateurish and in its infancy at the moment, it's likely to get a lot more sophisticated as time goes on.

If you are a one-man-band or small service provider - or even a not so small service provider - you need to look out for this scam. And the scams that are likely to grow out of it.

You MUST Know Who Your Customer Really Is!

The OFT has confirmed that new guidance on debt collection is in the early stages of being drafted. Draft guidance is expected imminently, but the OFT does not expect to publish final guidelines before the Autumn.

The main issue here is data accuracy, and the guidelines that will eventually arrive will focus on making sure that innocent individuals are not chased for consumer debt on the basis of false or erroneous information given by creditors to debt collection agencies - but the fact is that far too many companies have been far too careless about getting their information right about purely commercial customers for far too long.

There is, of course, rarely an excuse for the existence of inaccurate - or incomplete - data on any customer of any kind at any time, but where commercial customers are concerned, the opportunities for making sure that data is absolutely complete and correct, and the margin for error is so much reduced, that there is no excuse at all for errors of any kind.

But they still happen.

I continue to receive instructions to proceed (for really quite large sums of money!) against companies that do not, and have never, existed. And I still see new account opening forms, fully completed, signed and dated by 'directors' (who afterwards prove to be untraceable!) that show false company names - and false company numbers that lack the odd digit or two.

I've been singing the 'You must know your customer' song for so many years now that I'm sick of hearing it myself - and keeping my temper and my tongue between my teeth and refraining from saying, 'I warned you', or 'It serves you right', is getting harder all the time.

But I can say it here:

If you don't know who your customer is, it's going to serve you right if things go wrong. And I've warned you about it not once, but many times.

Compromise Can Produce the Best of All Possible Outcomes

Jane Bennett, the Forum of Private Business's Head of Compaigns commented on the Queen's Speech today, and stated that it 'didn't appear to contain anything smaller businesses should be unduly concerned about'.

I listened to the Speech - and whilst I haven't had time to absorb it properly, and would like to spend some time mulling over the proposed Bills, I think Ms. Bennett is absolutely right.

What really struck me about Ms. Bennett's comments, though, was her reference to the 'not ideal' compromise reached over National Insurance Contributions.

Parties who mutually agree to 'compromise ' naturally have to accept terms that do not perfectly agree with the original or absolute desires of either or any of them, and therefore no 'compromise' can ever be said to be 'ideal' for either or any of them - but compromise can (and in many cases does) reflect the best of all possible worlds and produce the best of all possible outcomes.

Anybody who has ever been in business since the world began and the first bargain was sealed - whether by way of a handshake or a written contract - knows the price and the value of compromise. Compromise is what business is all about. Actually it's what life is all about. And now it's what politics and government is all about, too.

I think we can all live quite happily with that.

A Fair Balance At Last?

We were expecting the Budget to be a belt-tightening exercise - and it is.

I find that I can't mourn over the fact that Government Ministers will now have to use public transport, walk, or use 'pool' cars. You and I have been using our Oyster Cards, our feet, and 'pool' cars for many years now, and I don't think any of us are the worse off for the exercise - although we could probably do without the disturbing clanking noises that frequently occur whenever one changes gear in a 'pool' car...

And I don't think any of us need mourn too much over the £836M cut to the Department of Business Innovation & Skills either - or, indeed, the cuts to Local Government and many other public sector departments. They are long, long, overdue. The public sector has grown much too fat - and those of us on the outside of it have grown much too lean. It's long past time to strike a fair balance - and perhaps the time has finally come.

Not Perfect - But a Lot Better

I seem to have spent a lot of time watching the news and holding my breath lately but - for the moment - I think I can begin to relax.

The Liberal Democrat and Conservative Coalition has scrapped the planned one per cent hike in National Insurance Contributions for many (I think in most cases, most!) staff members. The hike will still affect staff earning more than £20,800 per annum - but that will allow many businesses to retain employees and/or to take on new staff without worrying about incurring major tax increases.

This is a good beginning - not perfect, but a lot better than we might have expected had the old regime continued unchanged. Perhaps - at last - we will see the unemployment figures begin to drop and signs of real recovery for everyone.

Before we begin to celebrate, though, let's wait for the emergency budget, set for June 22nd. There'll be live coverage for that - Which is certainly going to be keeping us all well up to date on the Which? Money Liveblog and the BBC will be there as usual - so I suppose I shall be glued to the PC yet again.

I have to say, however, that I have hopes for the budget - and for the Coalition, which I think has every chance of working out well.

Well. Nobody Wanted It, But...

...perhaps a hung Parliament is not a bad, but simply a timely and long overdue event.

Change is a good and necessary thing. Nobody likes it, because the known is comfortable and familiar and any change is a step into the dark, but the electoral system as it stands is manifestly unfair, and has been in need of change for a very, very long time.

Changing that system is therefore necessary and for the common good, and that has never been more obvious than it is now in the wake of the recent General Election - which may (at last!) force a change.

Look on the bright side! The hung Parliament has produced two conscientious, well-meaning and energetic young men who may well be able to work together for the common good and who are, moreover (and very importantly) free of any taint of sleaze - a very welcome change!

I don't believe, of course, that those two young men can ever agree upon every point - but I think and hope that they can agree to compromise upon the most important ones and get business on its feet and people back into work.

Free Web Seminars from Accountancy Age and Financial Director

I've been looking at Accountancy Age and Financial Director web seminars.

The seminars are free once you have registered - and interactive if you have the time to attend. Otherwise you can review the recorded events in your own time. One time registration will give you a user name and a password. The URL for particular events will be e-mailed to you afterwards.

The 'Upcoming Events' tab on the site shows nothing at the moment - but there are a number of recorded events available. Not all of them are for everybody - a lot of them are aimed at accountants - but some of them might be immediately useful, and this is certainly a site to keep your eyes and ears on.

I found the site, incidentally, through an e-mail I received from Business Credit Management UK - another source of information it's worth signing up to.

How to be a Bigot - or a 'peruvian'

Well, we all know how to be a bigot. Or at least we do now. One need only be a thinking and articulate person and ask the right questions of the wrong man at an appropriate time to be a bigot. Simple!

Being a 'peruvian' though is something else. Having a bad attitude, a big mouth (and a big foot to put into it!) doesn't quite cut the mustard on that one. They help, of course - but to be a real 'peruvian' you need talent and application and a certain aptitude for the role.

I hadn't thought of the word 'peruvian' for many years until I read about Gillian Duffy today - and I only thought about it then because Mrs Duffy reminded me quite strongly of my mother. Like my mother, Mrs Duffy is definitely not a woman to be trifled with.

My mother was not a native English speaker. Some of the words she used were therefore incorrect - or incorrectly applied. Most of the time we at home could work out where those words originated - we all knew for example, that an 'advocado' wasn't a foreign lawyer, but was something green with a big stone in it that ended up on your plate. We never, though, got to the bottom of 'peruvian'.

To our knowledge, my mother knew no one from Peru, had never met anyone from Peru and had nothing against Peruvians, but she applied the words 'he's a peruvian' to describe a certain kind of person so often that we all knew exactly what she meant.

After today's exhibition - so do you. Gordon Brown is a 'peruvian'. And his grovelling apology to Mrs Duffy can never change that fact in her eyes, or mine.

The FSB Has - Very Usefully - Summarised the Main Manifestos

The Federation of Small Businesses has summarised the manifesto's of each of the three main parties to make it easier for SMEs to see what each party proposes to do for small business. They have also included Plaid Cymru's manifesto, and that of the Scottish Nationalist Party.

You can find the link to the summaries on the Federation's Home Page under the title "What will the main parties do for small businesses" - and obviously it's worth taking the time to read all of them.

Obviously, too, manifestos are only promises - and all too frequently contain promises that are never kept - but it is interesting to see how important the needs of SMEs have become to the parties fighting this election, and how far they are each prepared to go to woo the SME vote.

Well - better late than never! I suppose that even politicians had eventually to realise that it's small business that turns the big wheel...

It's the Sprats, Not the Mackerels, That Really Matter

There's always been a tendency to concentrate on collecting big debts, rather than small ones - and it's always been a mistake.

The real question is, you see: how many sprats equal a mackerel?

Quite often, there are enough neglected shoals of sprats lying about on a ledger to equal more than one mackerel - and the fact is that sprats are generally easier to catch.

Small debtors tend to respond more quickly and more positively to letters and telephone calls than larger companies. They are less demanding; less likely to come back with time-consuming price queries, or requests for discounts or deductions - and if they have a problem they are much more likely to say so. And they are a whole lot more likely to agree to - and stick to! - reasonable re-payment plans!

Money from small debtors tends to come in in dribs and drabs - but those dribs and drabs can improve your cash-flow steadily, and on an on-going basis, if you work at getting that money in.

Things are improving - albeit very slowly - for everyone. So now is a fairly good time to catch your sprats - particularly if, having neglected them, you have given them a pleasant respite and some time to consolidate, catch up, and get back on their feet.

You shouldn't, of course, forget your mackerels - but you shouldn't give them all of your attention to the exclusion of everything else, either. Obviously every Bank Manager loves a large deposit of funds - but small regular deposits that accrue over a period of time paint a picture of stability much dearer to their careful, fearful, Goblin hearts.

Look after your pence. Your bank will appreciate your pounds. But not, I fear, by very much at the moment...

Coca-Cola Needs Another Advertising Agency

I have to say that I sometimes despair of large companies that are obviously out of touch with reality and totally in thrall to advertising agencies whose personnel do not (apparently) live on the same planet as the rest of us.

Last Wednesday the Forum of Private Business criticised Coca-Cola for condoning sick days in an advert - and very rightly found its comments featured on the BBC News.

The Glaceau Vitamin Water advert, which caused the Forum of Private Business to comment in the first place, stated: "The trick is to stay perky and use sick days to just, not go in."

Really? At a time when employee absence is costing the UK's economy almost £12bn-a-year in lost working days - and 'staying perky' by failing to turn up for work would very likely see yet another person standing in a line at the job centre - Coca-Cola's spokesperson's comment that the advert was: "clearly a tongue in cheek reference" and "one of a series of fictional stories" on the bottle, failed to impress anyone at the FPB.

It didn't impress me either - and I can't help feeling that Coca-Cola might be incorrect in its assumption that this advertisement will "help demonstrate the brand's personality". Well - not unless the brand's personality is intended to be careless of the public welfare, ignorant of current affairs, and more than a wee bit dumb.

This is not, by the way, the first time that Coca-Cola has put its foot in its mouth with its advertising slogans. In October 2009 Coca-Cola was criticised by the Advertising Standards Authority (ASA) for presenting "misleading" claims about nutritional benefits. That particular advert insisted that the product had "more muscles than brussels". Complaints were made because the implication was that the drinks were equivalent to vegetables and had health benefits - which is hardly likely considering the huge sugar content of most of the Company's products. Obesity? What's that?

If you're in the advertising business - and I don't care if you're a one man band - I really would suggest that you put in a tender for this job. This is a brand that needs a lot of help...

Your Fuel Costs - And The Good Old FPB

It's always worth reading the news articles on the Forum of Private Business . They are immensely informative - even when they are very depressing.

The recent article relating to the price of fuel is very depressing indeed. Fuel is running at 119.9 pence a litre now - and some anylysts predict that it could reach as much as 150 pence per litre over the summer.

According the article I read, increases in VAT and fuel duty between December 2008 and April this year have increased the Government's income from fuel tax by 12.5%. The FPB believes that increases on such a scale are unsustainable for small business in the best of times, and is calling for the further increases scheduled for October (one pence) and January 2011 (another 0.76 pence) to be scrapped.

In the meantime, the FPB is - as usual - doing its best to help its members.

The Forum has developed a range of business solutions to support SME's. If you are looking to save on fuel costs - and other things! - the one to investigate is the Forum's Purchasing Director.

Through the Forum's Purchasing Director, members can access the Fuel Card Programme, which is provided in conjunction with The Fuelcard Company . The Fuelcard Company offers a choice of eight different fuel cards - and they are FREE to members of the Forum.

There are a lot of benefits attached to this particular deal for SMEs - better control of fuel costs, preferential fuel prices, consolidated VAT invoices approved by HMRC, and freedom from binding contracts. And Fuelcard Company also provides a complete - and FREE - fuel analysis, which could lead to further savings.

For more information, call 0845 612 6266 or visit the Forum .

Small Business, Big Vote - and What People Want

I just watched the Federation of Small Businesses campaign video. You can find it under "Small Business - Big Vote".

It doesn't exactly tell you in so many words where to put your vote, but it does goes a long way toward telling whatever Government we eventually get what people really want.

It's a very thought provoking video, and it's worth watching simply because it doesn't just concentrate on the big issues, but pays attention to the small ones - the things that tend to get left behind in the shuffle and leave people feeling irritated and disillusioned and unimportant.

Let's hope somebody somewhere in the coming Government will listen, read, and inwardly digest the facts of what people really want. Rather than what they think people really ought to want - or what they want themselves.

Hopeful Signs of The Times - Happy Easter Everyone

When we arrived in France - almost six years ago now - Madame Bigot (who then owned the fish shop) told me that it never, ever, snowed in Richelieu.

It snowed that year - an extraordinary event that caused even French drivers to slow to a crawl, and brought the local photographer out on the street taking pictures of this supposedly 'one-off event'.

It's snowed every year since.

We've had five very bad winters here now - and this year the winter was extraordinarily bad. Looking out of the sitting room window at my wife's garden - full of plants that were used to much warmer winters and that have been shrouded in frost or buried in snow for five winters on the trot - I thought that very few of them would survive to see another Spring.

But most of them have. When I walked around the garden today, I found that that nine-tenths of the plants had not only survived, but had grown and spread. With care - and some sunshine - they'll flourish.

Think about it. And Happy Easter!

The Government is Wooing a Maiden - But it Doesn't have Marriage in Mind

You must have noticed, I'm sure, what a cornucopia of goodies has recently showered down upon the heads of previously neglected and despised SMEs.

The task force set up on April 1st by Lord Mandleson in order to help struggling SMEs to get bank loans is just the most recent of example of this unexpected shower of sympathy, goodwill, and (alas, only potential!) gold.

Ladies and Gentlemen, I've been around for a very long time, and I've lived a very full life, and I have to say that it seems to me that whilst this Government is certainly wooing a maiden, it's a quickie behind the bicycle sheds before the end of term rather than a marriage that it has in mind.

Wise maidens keep their heads out of the clouds and their feet on the ground and test the proffered pearls on their teeth before they uncross their legs. I suggest you do likewise.

Lord Sugar, Mr Wright, Political Rhetoric and a 'Nice Little War'

A new task force was launched today by the Department for Business . The task force will be advising the Government as to how to ensure that small companies are treated fairly and properly when trying to access bank finance.

The task force will be made up of Lord Sugar, John Wright (the outgoing Chairman of the Federation of Small Business , and former Lloyd's TSB Deputy Chief Executive, Mike Fairey.

That should be interesting.

Five months ago Mr Wright called for Lord Sugar's resignation. That was when Lord Sugar described struggling companies as "moaners" living in "Disney World", and told a business audience that eighty-five per cent of the small businesses applying for bank loans were more in need of a bankruptcy adviser and added: "I can honestly say a lot of problems you hear from people who are moaning are from companies I wouldn't lend a penny to."

Mr. Wright and Lord Sugar are now said to be "on good terms" - but there's already a political row brewing that could soon become what used to be called 'a nice little war'. Richard Lambert, the Director General of the Confederation of British Industry , described the proposal as "dotty" and declared "it will never see the light of day, is quite unworkable and pure political rhetoric."

Lord Mandleson was quite cross about that, but I won't bore you with his comments. You've heard them all so many times before that you could probably recite them in your sleep.

Going back to Mr. Lambert's comments:

I'm not sure about "dotty", given that, according to research carried out by Graydon UK and the Forum of Private Business one in five SMEs have been refused funding and do not know why their bank rejected their loan application.

I'm not sure about "unworkable" either, because I think the task force could work.

Unfortunately, I am quite sure about the "pure political rhetoric" - and that's what's going to make this task force "potty" and its task "unworkable".

The FSB's 2010 Election Manifesto is a 'Must Read'

I am not a political person - and this blog was never intended to be anything but a simple 'how to' guide to credit management - but at the moment I find that the 'politics' of keeping SMEs alive and flourishing are being pushed under my nose so often and from so many reputable sources that I feel that I have no choice but to relay all the information I find or receive, even if I don't choose to comment on it.

My latest 'find' comes via the The Federation of Small Businesses .

The Federation has joined forces with the Institute of Credit Management to produce the FSB-ICM 'Voice of Small Business" Survey 2009. It has also produced something called "Small Business - Big Vote: The Route to Recovery - FSB 2010 Election Manifesto".

It isn't clear to me that the Institute of Credit Management has anything to do with the Manifesto, but be that as it may, the Manifesto is certainly worth a read.

TheManifesto runs to twenty pages.

'Promote Self Employment', Generate Opportunities for Youth Employment', Declare a Moratorium on Employment Regulation', 'Cut Payroll Taxes' and 'Stop the Repeal of Furnished Holiday Letting Rules' will only take you up to page 7, but I have to say that the Manifesto doesn't get any less interesting, informative and thought provoking until you get to page 18, which is lined page entitled 'Notes'.

However, and as the Manifesto is in pdf format - which means that you can print it off - the lined page is probably a kindly and thoughtful provision considering the volume of statistical and other information that preceeds it.

You can find the Manifesto by going to the FSB's Home Page and clicking on the 'Small Business - Big Vote article.

I"m not commenting - but I have to say that I found the contents of page 15 particuarly interesting and important. 'Small Businesses are not just part of the local community - they are the the local community' says it all, doesn't it?

Vote 'No' to An Increase in National Insurance Rates

The Forum of Private Business completed a snap poll of its members last week, and produced its results last Friday.

Unsurprisingly, nine out of ten smaller businesses were disappointed by last weeks budget - and more than two thirds of the members polled stated that they were expecting 'a more realistic budget' to be delivered after the General Election.

Eighty-seven percent of members thought that the Chancellor's budget would not increase business or consumer confidence - and the poll reflected widespread anger at the planned hike in National Insurance rates.

You can't do anything much about the Budget - save to vote for a party that will produce another, hopefully less political and less cynical one - but you do still have time to say 'NO' to the proposed rise in National Insurance Rates by signing the Petition . You can find more information about the Petition on the Federation of Small Businesses website - which, incidentally, is a good, informative, place to wander around in when you have the time.

Please take the time to sign the Petition today. Given the numbers of people who are unemployed at the moment, and its potential effect upon them, the one per cent raise in National Insurance rates is a thoroughly disgraceful idea - and never mind that it isn't scheduled to come into effect until April 2011. This is a tax on jobs - and it's going to mean fewer jobs, slower recovery, and yet more people having to sign on.

Sort Code Checker Relaunched

The on-line Sort Code Checker has been relaunched, and now covers BACS, CHAPS, cheques and paper credits as well as Faster Payments.

By inputting the sort code of the account to which the payment is to be made, customers can see whether that account can receive a Faster Payment, BACS credit or CHAPS payment - or whether a Direct Debit can be set up, or a cheque or paper credit can be paid into the account through the clearings.

The Sort Code Checker was originally developed to help customers see whether the account they wanted to send a payment to was linked in to the Faster Payments service which was launched at the same time. It has proved very popular - and is obviously of great benefit to businesses looking to avoid or prevent any possible delays to a payment or the registration of a new customers' Direct Debit details.

The Checker stores all of the UK's sort codes, and is regularly updated to ensure that data is current. You can find the Sort Code Checker at UK Payments .

How to Get a Lot For Not a Lot

Going back to the benefits of joining the Forum of Private Business , I find that the FPB has partnered with F A Simms & Partners , an independent business rescue and insolvency practice, to provide members experiencing financial problems with a free, confidential helpline to get independent, professional advice.

Yes - you did read that correctly. The helpline is FREE to FPB members.

The more I read about the FPB and its services to its members, the more impressed I become - particularly considering the more than reasonable amount it costs to join the Forum! It really is worthwhile taking the time to investigate their site thoroughly.

The Budget - Forget the 1p Here and 3p There, and Consider the Knock-on Effect

The 3p fuel duty rise is due to phased in - a penny at a time - between April this year, and January 2011.

It will immediately impact upon haulage firms, delivery companies or any company that runs a fleet on its own behalf, taxi and bus companies, and small businesses that rely on their own transport to stay in business - like, for example, plumbers, painters, and building contractors.

All of those firms will be paying at the pump, and all of them will have no choice but to pass on those extra pennies to the customer - and that means you! - not once, but three times, over a very short period of time.

And, of course, you'll be paying at the pump yourself if you drive a car for any reason at all.

You'll also, by the way, be paying at the pub - if you can find one that can still afford to stay in business.

A penny here and three pennies there? Doesn't sound too bad until you consider the knock-on effect, does it?

Cynicism - Or Common Sense?

Research undertaken recently by the Forum of Private Business shows that barely a fifth of SMEs believe that the upcoming Budget will have a significant impact on their businesses (only twenty-two per cent are factoring it into their plans for 2010)and that even fewer (nineteen percent) consider that the general election will affect their plans.

According to Thomas Parry, the Forum's Research Manager, most SMEs are more concerned with running a business in a struggling economy than considering the potential effects of a Budget that may well be followed by another Budget straight after the election. Mr.Parry remarked that "I think there's a certain amount of cynicism about this year's budget and this research reflects this."

Personally, I think that common sense rather than cynicism may be the factor behind the 'who cares' and 'what difference' attitude revealed by the research. Whichever party inherits 'the mess', the major concern for SMEs will be to stay in business - and staying in business is therefore what they are (very sensibly!) concentrating on.

What effect that will have on voter turnout is, of course, another matter altogether...

About Those Accounts - And the Fact that You Need to File Yours

A couple of days ago, I mentioned that MEPs have approved changes to European Union Rules, and that - if the UK decides to accept the exemption - many SMEs will be exempt from drawing up and lodging Annual Accounts.

I think it worthwhile to add a link here to the Institute of Credit Managements' comments on this proposal .

Please take the time to follow the link and read the the Press Release because it really says it all.

SMEs need to provide relevant and up-to-date information if they are to get credit. And the more information they can provide, the more likely they are to get the credit they need.

Giving - and sharing - information is very, very important. Which is why this proposal is, as the Press Release states - utterly absurd.

Fast On-line Credit Reports -

Credit Risk Manager is a new initiative of Graydon International, which is a subsidiary of the Graydon Group. The Group is owned by Atradius, Coface, and Euler Hermes - and I learned about Credit Risk Manager where I learn about a lot of other useful things; it came in from a member of the one of the Groups I belong to on LinkedIn .

Credit Risk Manager is a fast way of ordering an on-line business credit report - and according to its website, if a Company isn't in its database, a fresh investigation can be ordered. That isn't instant, and it isn't free - you can have normal speed (12 days maximum) or something called 'super flash' (5 days maximum) - but the fact that you can have such a report from such a reputable provider is worth bearing in mind.

Read your way through the website - you might, as they point out, be able to: "Save yourself money and get a good night's sleep."

By the way: joining LinkedIn is free. Joining the Credit Groups you will find there is free. And getting information there is free, too. It might take up half an hour of your time to sort yourself out on LinkedIn - but it would be a well-spent half hour.

Don't Be Tempted Not to File Your Accounts!

MEPs have approved changes to European Union Rules, which - depending on whether or not the UK chooses to adopt the exemption - may mean that small companies may be exempt from drawing up and lodging annual accounts. MEPs believe that this will 'cut red tape' and 'save very small firms around a £1,000 in accountancy and audit fees'.

Gosh! As much as that!

£1,000 in accountancy and audit fees is peanuts in comparison to the sums you could lose by not filing your accounts - and, incidentally, by failing to take advantage of the credit management tools that are available to to you and making as much information about your Company and its financial status readily available to everyone who needs it.

As Philip King the CEO of the Institute of Credit Management tweeted a couple of days ago: "less info = less credit = less growth".

This mad proposal may be adopted by the UK. Don't accept it at face value as an opportunity to save money and cut down on overheads. Think "less information=less credit=less growth" and look for the tools that will allow you to give more information more easily, get more credit, and grow.

Beware of 'Cowboy' Rating Surveyors

The Valuation Office Agency's website seems to be down this evening - but both that organisation and the Forum of Private Business are warning people to beware of 'cowboy' rating surveyors attempting to profiteer from the recent rates revaluation.

LeaseholdersUnited provides an on-line service designed to help SMEs keep their property costs down - and they publish a list of 150 genuine rating surveyors with at least a one in three success rate at appeal. You can view the list for free on its website.

'Cowboy' rating surveyors tend to 'cold call' businesses. If you are unhappy with the Valuation Office Agency's assessment of the rateable value of your business, and need help to appeal, then you would be best advised to choose someone from the list provided by LeaseholdersUnited.

Savings - if any! - made by cold-calling 'cowboys' tend to be minimal, and are often far exceeded by their fees.

Incidentally, Leaseholders United can help SMEs with many other aspects of property costs - rent, for example, or service charges and claims for Small Business Rate Relief. Their membership fee is £100 a year - but membership of the Forum of Small Business includes discounted access to Leaseholders United's on-line services.

I appreciate that you probably don't have much time to spare - but really is worth spending some of it checking out the two organisations I've mentioned here. They could save you a lot of money and a lot of grief.

The Cut-off Date to Appeal Against Business Rates Set in 2005 is March 31st Next

If you believe that your Company has been charged too much for rates since the last revaluation on March 2005, you have until the 31st of March next to appeal.

There are two main grounds of appeal:

• If you can show that you are paying more than neighbouring properties, then you can appeal.
• Alternatively, you will need to show that there has been a 'material change' in the surroundings of your business and that that change has had a detrimental effect on trade.

This latter might be due to a change in the size or use of your premises, a high proportion of empty shops in the near vicinity, streets being closed off due to roadworks, or new traffic systems which have effectively directed trade away from your location.

To learn more about what neighbouring premises are paying, go to the Valuation Office Agency where you will be able to find out what neighbouring premises pay and whether they have appealed against the amounts set for them.

Making an appeal is free of charge - but the burden of explaining what you believe is wrong in the valuation will be down to you. It's therefore important that you do some research at the Valuation Office Agency, and understand how your business rates have been calculated and why you believe the calculation to be wrong before you make the appeal.

CreditWho?

The Institute of Credit Management will shortly be launching a new on-line Business Directory through which a range of cashflow services can be promoted.

The purpose of the new Directory is to provide information and links to businesses, services and products and create a reliable and trustworthy resource to which businesses can turn when they need help in a particular field.

The Institute says that it will not be vetting those promoting services on the site, but it will be insisting that participating providers belong to their own respective trade associations or professional governing bodies.

Watch this space!

Cheque Payments to H.M. Revenue and Customs

As of April 1st this year, all cheque payments made to HMRC by post will be treated as being received on the date when cleared funds reach HMRC's bank account.

The change does not affect payments made by Bank Giro, but if you are still paying by cheque and by post, you will need to ensure that you allow enough time for the payment to reach HMRC and clear by no later than the due date shown on the invoice.

There is (need I say it?) a surcharge for late payment.

It's worth remembering, incidentally, that electronic payments give firms up to 7 extra calendar days to pay - and that payments by Direct Debit provide businesses with at least 10 extra calendar days to pay.

What Price Energy?

On 18th January this year Ofgem introduced a series of measures designed to protect SMEs from the actions of energy companies.

And not before time.

For quite some time now, SMEs have been paying disproportionately more for their electricity and gas than larger companies.

The measures will affect the way energy is sold and marketed to SMEs and will limit the use of expensive 'rollover contracts' that tie them to a particular supplier. As of January 18th, energy companies will have to ensure that their business customers are made aware of Contract changes, and give them a minimum of thirty days before the end of their notification period to switch to another supplier.

The measures also prohibit unjustified differences between tariffs and payment types - and give businesses more flexibility to switch suppliers.

Best practice - take the time to shop around. And don't allow contracts to 'roll over' and leave you with huge - and unnecessary - utility bills.

You might also want to consider joining the Forum of Private Business . Members of the FPB can take advantage of a free service from a utilities consultancy, which monitors when utility deals are up for renewal, will shop around to secure the best price possible, and negotiate detailed contracts and service agreements.

That isn't only reason that joining the FPB is an excellent idea - there are lots of other benefits - but when you consider the possible savings on energy alone, then the small membership fee can look more than reasonable!

What Price Energy?

Legislation Must Be Readily Comprehensible to SMEs - and Easy to Apply in Practice

The rules and regulations by which all UK businesses must abide seem, at the moment, to be an increasingly moveable - and increasingly indigestible - feast.

'Up in the Air' is a film for which George Clooney may win an Oscar for his portrayal of a man who makes a living by firing people.

I wish I could find that idea entertaining, but I'm afraid I can't, because the unpleasant truth underlying the 'story-line' behind the film is that more and more SMEs are genuinely employing 'corporate downsizers' to sack employees that they can no longer afford - not because they don't care about their employees enough to do the job themselves, but because the regulations surrounding unemployment law and redundancy are so impenetrable that they are afraid to do it for fear of making a mistake.

Very shortly, SMEs - like every other business - are going to have to abide by the forthcoming Equality Bill. The Government's 'impact assessment' of the new Bill claims that it will take an hour for an SME to understand the Section dealing with disability discrimination.

I don't think so. I think that the average SME will need to have someone more experienced in understanding and interpreting legal documents to get to grips with that Section - to say nothing of the rest of the Bill.

Much of the new Legislation is important - and very necessary. But it should also be readily comprehensible to SMEs who lack access to an internal legal department. Otherwise, it's likely to become yet another financial burden - which could well be the straw that breaks the camel's back.

Government Incentive?

Government Agencies, Local Government Bodies and central Government are still failing to pay trade invoices within the ten day timeframe pledged by Lord Mandelson in October 2008.

According to commercial credit reference agency Graydon UK, two thirds of SMEs are waiting more than thirty days for Government invoices to be settled.

Martin Williams, the Managing Director of Graydon queried how damaging the impact of this failure to pay has been in exacerbating the cash flow problems faced by small firms, and stated: 'These public sector bodies need to become more efficient at collecting monies owed and managing their debtors efficiently'.

Indeed they do - but it's unlikely to happen if Government employees lack the incentive (and/or the training) to make it happen. For the public good, Government must try harder to set its own house in order, educate its workforce, and make work more rewarding for public sector employees.

Credit Insurance - Getting it or Opting Out

At the moment a lot of people seem to be talking about credit insurance - the best way to get it, and possible ways to survive without it.

Business Credit Management ran an interesting article featuring research from CreditPal which showed that trade credit insurers are increasingly demanding additional disclosure from the customers and suppliers of a business - and that consequently the ability of SMEs to provide up-to-date management accounts is becoming more and more important.

The article quoted Philip King, the Chief Executive of the Institute of Credit Management, who stated that "Trade credit insurance plays a vital role for SMEs in particular and it is clear that insurers will be more inclined to write cover and maintain limits given greater financial disclosure".

And if you can't get credit insurance? Simon Howard, Credit & Risk Consultant at IDS Collections ,writing on the ICM Credit Community Group Site on LinkedIn, states that "There is a powerful solution available that is new to the marketplace and comes with the support and advice to make the transition away from insurance." Unfortunately, Mr. Howard doesn't describe the 'powerful solution' so I can't tell you anything about it, but if you are interested in receiving further information, or want to request a demonstation, you can contact him through IDS.

D.I.Y. Bankruptcy - An Invitation to Deceive?

If current Government proposals come into force, bankruptcy will become a D.I.Y, on-line, tick-the-boxes, out-of-Court process. The aim is to dispense with the delay that some debtors experience between the presentation of the Petition and the making of the Bankruptcy Order, relieve the over-burdened Court system, and save money.

Those are excellent objectives - and the present insolvency system is, frankly, a mess and in urgent need of reform - but I don't believe that this particular 'fast-track' idea will prove to be viable, however sophisticated the on-line system can be made to be.

Philip King, the Chief Executive of the Institute of Credit Management, would like to see a system where every debtor seeking insolvency has a face-to-face meeting with someone who can fully explain all the available options and their consequences - and that would indeed be the most sensible solution, because counselling and advice is an essential part of getting people out of trouble in such a way as to benefit them AND their creditors.

In the absence of such a system, Mr. King believes that there should at least be an objective 'score card' system based on the questions and answers given, but - in my opinion - that idea (along, in fact, with the whole on-line tick-the-box idea) is a non-runner.

It's all too easily manipulated. This whole system would depend upon people giving truthful answers - and unscrupulous people looking to use the system to their own advantage would quickly learn which answers are the 'right' ones. Actually, we could all work that one out.

There are, of course, going to be people who have to make decisions about the on-line input - but how are they to separate fact from fiction? And who is to monitor to the quality of their decisions?

In my opinion, fast-track bankruptcy as it is proposed at the moment is an invitation to dishonest people to 'opt out', leave a trail of unpaid creditors in their wake, and get off scot free.

Bad idea. Again...

The Facts of Life - Perhaps Not Quite as Malcolm Walker Sees Them

In a recent interview with the Daily Telegraph, Iceland Foods Limited's Chief Executive Officer Malcolm Walker dismissed the new Supermarket Code of Conduct - and its proposed ombudsman - as a waste of time, and stated that Iceland would be doing 'the bare minimum' to comply with the new Groceries Supply Code of Practice.

He also dismissed the bullying of of small suppliers by large retailers (and the bullying of smaller retailers by big suppliers) as 'a fact of life'.

The story was picked up by the Forum of Private Business, which will be writing to Mr. Walker to 'express its concerns at his comments'. It will also be asking him to sign up the Government's Prompt Payment Code which, as you probably know, was launched to encourage large businesses to pay small suppliers promptly.

I do, of course, wish the Forum every success in its endeavours to impress upon Mr. Walker that his attitude is irresponsible and wholly unacceptable - but I think I might possibly rely on a larger forum to do that.

The Daily Telegraph has a very large readership. The Forum of Private Business has quite a large membership. There are Blogs, Tweets, Credit Circles, and unofficial grapevines - and an awful lot of victims of the sort of bullying that Mr. Walker is prepared to accept as 'a fact of life'.

Word tends to get around - and bad news travels particularly fast.

Anybody here remember Gerald Ratner?

A Few (Very Important!) Things That Aren't Said...

It's been an interesting couple of days one way or another. Eurostar didn't come to a halt in the tunnel last Thursday - for which I shall be forever grateful! - and people have written and said things that have given me more and more to think about.

I've written a lot over the past six months about professional collection software. It's wonderful. I'm perpetually astonished by how much information can be made so readily available so easily -and I would never want to return to 'the old days' when it was so much more difficult to get information of any kind. But reading posts from newcomers to this trade I do wonder whether collection has become so automated a function that they are failing to learn - or develop - something vital.

A couple of days ago I was talking about developing empathy with debtors - which is certainly vital! - and I quoted something that Charlie Becker of Sales Beach Associates had written on LinkedIn. Today I had the time to look again at what Charlie had written, and I came across the phrase 'Sometimes it's better to listen and hear everything and even a few things that aren't said'.

Like me - and I think like anyone else that has been in this business for a long time before professional software became the norm - Charlie Becker has not only learned to listen and communicate well with debtors, he has learned to use his intuition; to 'listen' to the 'few things that aren't said'.

It will be a great pity if, by coming to rely on computerised collection systems, people fail to learn - or develop the ability - to do that.

Computers are wonderful. Computerised collection systems are wonderful. But - for the moment - only the computer in your own head can learn to hear and evaluate the 'few things that aren't said'.

You can find Charlie Becker - and me - on LinkedIn . In the meantime you might want to take some time to get to grips with your personal programming...

Empathetic Communication - Learn to Do it Today

I received a wonderful discussion post via LinkedIn today from a member of a Group called 'Credit & Collections Professionals'. It was entitled "Increase collections through data driven empathetic communications".

Enough of us in the Group managed to fight our way through the title to agree with the basic premise that taking an aggressive or combative stance towards a debtor is usually counter-productive, and that a sympathetic and empathic approach is more likely to produce a successful (and less stressful!) outcome all round. One comment, though, struck me as being particularly valid.

Charlie Becker, the Director of Sales Beach Associates wrote:

"Couldn't agree more with these comments. Empathy goes a long way. Sometimes it's better to listen and hear everything and even a few things that aren't said and act accordingly. There are always two sides to a story. Just listening to them will get results. I think it really depends on your communication skills."

I'll go along with that - and so should you! Mr. Becker has only been in the business for 20 years - just a Spring Chicken really - but he has a very sensible attitude!

National Insurance Contributions Are Going to Increase

As if SME's didn't already have enough problems.

As if SME's weren't already under pressure to maintain or reduce prices in order to stay afloat.

As if there weren't already enough people out of work.

Never mind all the Government initiatives and incentives that I've been talking about over the last year that were supposed to help SME's and people generally. This increase does, I believe, show us all exactly what the Governmental agenda really is - and exactly how much real help SME's (and people!) can expect from a Government that has spent itself out and is now looking for whatever money it can get from whatever source at whatever cost to business and to the ordinary people who work to drive it.

I do sincerely hope that this is going to be the last nail in the coffin of very nearly the most destructive and profligate Government I've ever seen bar none.

If You Don't Give, You Won't Get - Use the Technology

According to new research from the Forum of Private Business whilst almost a third of the businesses surveyed relied on standard credit checks to monitor their own customers and suppliers, only thirteen per cent of them were prepared to provide their own latest management accounts to outside parties. And only six per cent were willing to supply their own audited accounts.

With respect, I have to say that in the present economic climate, that isn't a good stance to adopt. Anyone who wants credit or finance today must be willing and able to produce accurate up-to-date management accounts.

Because if you don't give, it's unlikely that you'll ever get.

Any accountant can produce management accounts for you - but you'll find it a lot cheaper to look at any one of the many, many, computer programmes or on-line systems that will allow you to produce them internally.

Use the technology!

HMRC - The Iron Fist is Coming Out of The Velvet Glove

As of December 2009, the Business Payment Support Service approved almost 250,000 time-to-pay arrangements worth almost £4.5 billion.

H.M. Revenue & Customs insists that the scheme will remain in place - but it is now dealing with more and more requests for repeat deferrals, so it is likely that the Department will take a tougher line, and that new deferrals will only be permitted for shorter periods and that there will be more stringent requirements to provide and adhere to repayment plans.

H.M. Revenue & Customs have also warned that action will now be taken against companies that default on time-to-pay agreements.
It is perhaps not surprising that the Department is tightening up. Time-to-pay arrangements are costing the Government tax revenues that it can't afford.

At the moment, it is still possible to come to an arrangement with HMRC if you are worried about being able to meet payments owed to it - or if you want to repeat deferral of payment.

But don't leave it too long to ask for either one...

Supermarkets - One Step Ahead of the New Code?

The new Groceries Supply Code of Practice will come into force on the 4th of February next, when the Government will begin a consultation as to how to best enforce it, and what the nature and powers of the Ombudsman will be.

In the meantime, suppliers are already receiving copies of the Code from some retailers - along with new Terms of Trade regarding purchases. Obviously, some companies will be in a position to refuse to accept new Terms of Trade - but most will not.

Draw your own conclusions.

The GSCOP - What Price Anonymous Complaints From Suppliers

I was reading my way around the Forum of Private Business site this morning, and I see that the Forum is concerned - as I am - that the new Groceries Supply Code of Practice may turn out to be as toothless as the old one if suppliers remain reluctant to complain for fear of being delisted.

The Forum suggests that a guarantee of anonymity in the complaints process could address this problem.

It be wonderful if the answer were that simple, but I foresee a host of problems attaching to the granting of such guarantees.

Effectively, a complaint to a Government Ombudsman is an accusation of wrongdoing which may carry a heavy penalty. The accused has the right to full disclosure in order to defend itself against the charge. Even were all the documentation to be designed to disguise or hide the identify of the complainant, full disclosure of all the facts leading up to the complaint would almost certainly allow the accused to identify the accuser.

Back to square one?

The Revised Grocery Supply Code of Practice - Missing the Point?

Back in May of last year I was writing about excuses for late payment, and I mentioned the 'we are your biggest customer' excuse which is - as I remarked at the time - less an excuse for late payment than a form of commercial blackmail, because it is usually accompanied by the unspoken threat that the customer will 'delist' the supplier, and take its business elsewhere if the supplier doesn't knuckle down and accept the situation.

At that time, there was a Grocery Supply Code of Practice - and it obviously wasn't working too well. Now - thanks to the fact that Consumer Minister Kevin Brennan has accepted the Competition Commission's recommendation that there ought to be 'a body' to enforce the Code - there is going to be a Revised Grocery Supply Code of Practice.

The revised Code will come into force on the 4th of February next - but the consultation as to how it is to be enforced, who and what that 'body' might be, and the powers that that 'body' should have, is also scheduled to begin in February.

In other words, the new Code will be in place as of February 4th 2010, but 'the body' that is intended to enforce it will not be in place until later - possibly much later - and, moreover, exactly what powers of enforcement that 'body' should have, remains undecided.

The aims of the new Code look good - but then so did the aims of the old one, and frankly it seems to me that the underlying problem remains the same, and that the revised Code has (as yet) made no attempt to address it.

Under the new Code, large grocery retailers that exert pressure on small producers through extra costs and late payment could face fines - but what small (or even very large!) supplier is going to risk 'delisting' to report a large customer to 'the body' and its new Ombudsman because it has infringed the Code?

Environment Secretary Hilary Benn stated that "The new Ombudsman will help strike the right balance between farmers and food producers getting a fair deal, and supermarkets enabling consumers to get the high quality British food that they want, at an affordable price."

That would be nice - but I'm not holding my breath on this one.

Some Good News

According to research carried out by credit insurer Euler Hermes UK small companies with shareholder funds of less than £100,000 are less likely to fail than businesses with larger resources.

The research also seems to indicate that 'younger' businesses are less likely to fail than older ones - particularly older ones that have been sold once or twice.

I knew there had to be a plus factor for SME's in there somewhere...

Come to An Arrangement With HMRC if You Can't Meet Payments Due

According to Hacker Young, Accountants, H.M. Revenue & Customs is still the number one creditor petitioning to wind-up companies in order to recover moneys owed to it - and that's despite the fact that there is a time-to-pay scheme in place.

There's a surprise! When I was still trudging down to the Companies Court to file Petitions years ago, the H.M. Customs & Excise representative was not the person you wanted to be behind in the queue.

It's possible to come to an arrangement with HMRC if you are worried about being able to meet payments owed to it.

And if that is the case then you should get in touch with Business Payment Support Service immediately to negotiate a realistic time-to-pay agreement whilst the scheme is still available - and before access to it becomes a lot tougher than it is at the moment which, alas, seems likely. Staff will review your circumstances and discuss temporary options tailored to your business needs - and you can call them Monday through Friday 8.00 a.m. to 8.00 p.m., and Saturday and Sunday 8.00 a.m. to 4.00 p.m. on 0845 302 1435.

Please don't rely on the understanding and goodwill of HMRC representatives if you are late with your payments. Understanding and goodwill are not in the manual.

Fraud and Theft - Small Means Vulnerable

In June of last year I talked about fraud, and the fact that hard times increase the temptation for customers, suppliers or staff to steal.

I also mentioned in that post that whilst many small businesses feel that they are too small, and know their staff, their suppliers and their customers too well to be potential victims, it is actually small business rather than large ones that attract predators simply because large companies tend to be hypersensitive to their vulnerability to to fraud and theft and their vetting and other systems are consequently tighter and more stringent.

According to figures collected by accountancy firm BDO, fraud cost business and the public sector £2 billion plus last year - and BDO's Group Head of Fraud expects reported fraud to treble over the next two years as managers uncover more and more theft in the process of clamping down on costs and cashflow.

As usual, the vast majority of fraud reported in 2009 was carried out by white collar workers between the ages of 20 and 39 in order to fund a lavish lifestyle, or was linked to alcohol, gambling or drug problems. Only five percent was motivated by debt, and only one percent by real 'need' for extra cash.

Small and medium-sized companies are very vulnerable to fraud. Don't let it happen to you.

I included some advice as to how to identify potentially vulnerable areas - and potential fraudsters - in my post entitled 'Fraudsters are Equal Opportunity Opportunists'. You can find it by going to the archives for June 2009, or typing the word 'fraud' into the 'Search this Blog' box on the right.

Do it! A leaky boat is the last thing you need when it's so difficult to stay afloat to start with.

Pay in Order to be Paid?

Going back to the cheque-less existence envisaged for us in eight years time by the Payment Council, I think it's worth mentioning that card processing services cost money. In fact one or two of them cost so much money to process each transaction that some traders can't afford to deal with them at all.

Obviously, therefore, and unless card processing services suddenly become free services - and I think you know how likely that is! - new or small businesses who are lucky enough to get card processing services in the first place will have to pay in order to get paid. And inevitably, in order to sustain a viable profit margin, those businesses will have to increase their prices - and may or may not price themselves out of the market in the process.

Where are we going here?

So What if There are No More Cheques?

I've just read my way through the Payment Council's decision on the future of cheques - and you can give yourself that doubtful pleasure by clicking on the link I've provided for you.

Whilst I'm all for going paperless, I do have one small question here.

If, by the target date of 31st October 2018, banks and payment processing intermediaries are still refusing to provide card processing services to new or small businesses - as they frequently do now - what are those businesses to do? Ask customers to put the cash in the post? Cease trading?

I know I seem to be saying this a lot of late - but I really do think that somebody somewhere isn't thinking too clearly at the moment...

Cross Border VAT - Claiming Repayments

As of January 1st 2010, the system for claiming repayments of VAT incurred in other member states will be moved online. It is hoped that the new system will be more efficient and speedier than the old paper-based system.

Prior to January 1st this year, reclaiming VAT payments made in other member states involved submitting a claim to the VAT authority of the member state in question - a time-consuming (and sometimes expensive) exercise. Under the new system, claims must be made online to H.M. Revenue & Customs. It will not be necessary to submit invoices to support the claim, and it is hoped that standardised codes will reduce the amount of information to be supplied in another language.

VAT and Cross Border Services - New Rules

If you supply cross border services, then you may need to seek help from a specialist to ensure that you understand the new rules relating to VAT.

Prior to January 1st, the basic rule was that VAT was payable where suppliers were established. Now, the basic rule is that the opposite will apply, and VAT will be payable by the customer where it is established - unless, that is, services relate to:

• land or property;
• intermediary services;
• transport;
• restaurant and catering services, or
• performance services

each one of which is now subject to specific VAT regulations.

If your Company supplies any of those services, then you really should take specialist advice, because - as usual! - any failure to apply or adhere to the rules correctly is likely to cost you money. And even if you don't supply any of those services - or believe that the services you supply do not fall within those categories - then it would still be good idea to seek advice to make sure that you understand everything that you will now need to do.

If, for example, you supply cross-border services to any EU member State where VAT is payable by the customer rather than your Company, then your Company will have to submit monthly or quaterly EC Sales Lists detailing those services despite the fact that you will not have to account for VAT. You can do this on on-line at H M Revenue & Customs , where you will also be able to find an explanation of the new rules in pdf form.

Bad Ideas and Bad Timing

In case you've forgotten, the temporary reduction in the standard VAT rate ended on the 31st of December last year. So once again everything from brochures to systems will have to be revised to show the new rate - seventeen and a half per cent.

And that isn't the end of the administrative and other costs that face VAT registered businesses this year. Further changes are planned for April 1st which will mean that all existing businesses with a VAT exclusive turnover of £100,000 - and all newly VAT registered businesses - will have to file their VAT returns online and pay their VAT electronically. In many cases, this could involve changes to existing systems or the purchase of new software.

When you consider that National Insurance, income tax, utility bills - and in many cases, rent - will all fall due shortly, or have fallen due already, I can't help but think that somebody, somewhere, isn't thinking very clearly at all.