The long awaited EU Small Business Act was unveiled this week, which hopefully will persuade member state governments to make more efforts in putting small businesses first, thus helping to create a better environment for small businesses to prosper. However, some groups have already criticised the lack of effort from European lawmakers in coming to terms with the perennial problem of late trade payments. This was an area that was supposed to be tackled more seriously in this new ACT, but wasn't.
According to a recent survey undertaken by the small business champions the Forum of Private Business, 81% of respondents said that trade payments had deteriorated in the last year, and more worryingly, 33% said that because of this issue, they were in danger of going into administration, through lack of cash flow. Helping small businesses by reducing administrative burden, providing better access to finance and public procurement are all to be welcomed, but the big issue of delayed payments remains to be tackled by lawmakers both here in the UK and in Brussels, judging by this latest piece of legislation.

June 27, 2008 | Permalink | Comments (1)

I've recently received an invitation to a symposium in July to discuss the Competition Commission's recent proposal to set up a Grocery Ombudsman to check on the affairs of the big supermarkets. After its inquiry into the grocery trade, it was the CC's view that some large supermarkets are responsible for transferring " excessive risk and unexpected costs" on to their suppliers.
It should be interesting to find out how Peter Freeman, Chairman of the CC and Keynote Speaker at the symposium, is going about setting up a new Supermarket Code of Practice and the Grocery Ombudsman position itself.
However, I read in the Sunday Times last week about Debenhams extending its payments to suppliers to 96 days amid claims that trading conditions "are deteriorating". Debenhams join B&Q, Boots Alliance and Selfridges among other high street giants, in a list of companies that believe it's perfectly OK to pass on any pain to suppliers in order to safeguard their own profit margins. In this respect, there doesn't seem to be much difference between the supermarket chains and other high street outlets. Maybe the supermarkets are right to moan about the fact they are facing the introduction of an Ombudsman to scrutinise their dealings with suppliers, whilst other retailers down the road from them are free to adopt similar tactics without fear of reprisal from the authoriies. Who said life was fair? Ask any trade supplier!

June 26, 2008 | Permalink | Comments (0)

Credit people have been talking about the credit crunch and it's potential fallout since last autumn, but despite all the gloom and doom merchants around, the impact is still not being felt in the general market to the level that was anticipated. Okay, credit insurers are reporting that claims are going up, and so is debt collection work, but any substantial increase in liquidations figures are conspicuous by their absence so far. This was also confirmed this morning when I spoke to one of the leading insolvency practitioners- any significant increase in workload hasn't come through yet.

Let's hope this is all good news, but most credit experts are sticking to their assessment that we may all be in for a period of more difficult trading and risk conditions lasting between 12 and 24 months. Are we therefore experiencing the calm before the storm?

June 18, 2008 | Permalink | Comments (0)

Since the last two big economic downturns in the Uk (the industry led "Thatcher" recession of 1979/81 and the consumer led "ERM" recession of the early nineties,) the stable ,relatively calm economic waters have been good to UK credit managers.

Due largely to the computerisation of bulk credit data in the nineties, the barriers of entry into the credit information market have come down, and as a result, credit managers have more choice of agency at far lower prices.Some agencies offer very low prices based on the regurgitation of public record data from the CRO with an appended credit rating. And in the prevailing calm conditions in the last fifteen years, whatever agency was selected, the predictive qualites of credit reports were perceived by the market as "much of a muchness."

The predictive quality of credit reports didn't even seem to be affected by the deterioration in the quality of financials filed at Companies House. As I write, 85% of accounts at CRO are abbreviated and unaudited. To make matters worse, criminals have read the disclaimer on the CRO website saying that accounts lodged there are received "in good faith" and are not validated or verified, and have bombarded Companies House with fictitious documents in order to perpetrate frauds.

The new breed of credit manager has been brought up on this diet, and many have no appreciation of what past generations of credit managers saw in their credit reports, unless of course they continue to use the services of traditional agencies like D&B, Graydon and Experian who still add trade payment data, edit trade magazines, and interview companies to add value to their products.

In turbulent times, a credit report must surely be more than a revamped Companies House image document with an automatic  rating attached? The low cost, no added value credit report has bloomed in "fair weather" conditions over recent years, but will it do the job in bleaker conditions like the ones we are facing now?

June 13, 2008 | Permalink | Comments (0)

At least us Brits are not alone in facing an identity theft epidemic. In the USA, it's the country's fastest growing crime. The Federal Trade Commission in the States undertakes surveys each year and tries to understand why and how these crimes are being committed. On the surface, what might seem strange is that Arizona is the identity theft hot spot state in the union, followed by California, Texas, Nevada and Florida.

Commentators, particularly from the Right, point to the fact that these are all border states, where illegal immigration may be fuelling the theft of US citizens' identities. Others suggest Arizona is perched on top of the list because it has a large older population more easily fooled by pfishers and other identity thieves. It has also been suggested that Arizona has a high incidence of methamphetimine users, and that identity theft is a popular "non violent" way to finance drug habits.

London and the Southeast see almost 50% of identity theft crimes in the UK, whereas Northern Ireland sees only 1% of the UK total. Is illegal immigration the big factor here? Or illicit drugs? Is anyone in the UK doing similar work to the FTC in the States to try to understand the causes, or are we content just to record the statistics?   

June 3, 2008 | Permalink | Comments (2)

Unhappy with some of the user complaints about activity at Companies House and delays in implementing aspects of the new Companies Act , a BERR committee of MPs met up recently with senior executives at the CRO in an oral evidence session. MPs heard that the public fears over false information being filed at Companies Registry by "would be" fraudsters and the like are justified, in that very little information coming into Companies House is actually verfied or validated by staff there. The CRO chief executive complained that too few companies had taken up the system of electronic filing of director changes etc called "PROOF", which would substantially cut down on the incidences of identity theft at CRO. When the BERR commitee asked whether making the system compulsory would greatly reduce the identity theft problem, the CRO said yes. One committee member commented " I feel a strong recommendation to Government coming here". Personally, I would back such a move because in this instance, i totally endorse the CRO's view that electronic filing of such changes would make it more difficult for opportunist criminals to fiddle with public records. 

June 2, 2008 | Permalink | Comments (0)