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.