CM December DECEMBER 2018

CREDIT MANAGEMENT

CM

DECEMBER 2018 £12.00

THE CICM MAGAZINE FOR CONSUMER AND

COMMERCIAL CREDIT PROFESSIONALS

INSIDE

2019 DESKTOP

CALENDAR

Consolidated

Thinking

Is it time for the debt

advice charities to

merge?

Why Crown preference

is causing such a stir.

Page 19

What to do with your

leftover turkey!

Page 52

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4

EDITOR'S COLUMN

SEAN FEAST

DECEMBER 2018

www.cicm.com

CONTENTS

20

ASK THE EXPERTS

LAUREN CARTER FCICM

16 – INTERVIEW

Derek Usher discusses the world of debt

purchase, FCA approval and a love of

cricket.

19 – OPINION

A closer look at the restoration of Crown

preference in insolvency.

30 – COUNTRY FOCUS

The finer details of doing business

in Ireland.

34 – FESTIVE APPS

Some handy shortcuts for organising

present shopping.

38 – CAREERS ADVICE

Credit Managers are earning more than

ever before, especially outside London.

52 – MAKE YOUR CASE

Regular contributors answer the most

pressing of festive dilemmas.

30

COUNTRY FOCUS

ADAM BERNSTEIN

CICM GOVERNANCE

View our digital version online at www.cicm.com Log on to the Members’

area, and click on the tab labelled ‘Credit Management magazine’

Credit Management is distributed to the entire UK and international CICM

membership, as well as additional subscribers

Reproduction in whole or part is forbidden without specific permission. Opinions expressed in this magazine do

not, unless stated, reflect those of the Chartered Institute of Credit Management. The Editor reserves the right to

abbreviate letters if necessary. The Institute is registered as a charity. The mark ‘Credit Management’ is a registered

trade mark of the Chartered Institute of Credit Management.

Any articles published relating to English law will differ from laws in Scotland and Wales.

38

CAREERS ADVICE

KAREN YOUNG

President Stephen Baister FCICM / Chief Executive Philip King FCICM CdipAF MBA

Executive Board Pete Whitmore FCICM – Chair / Debbie Nolan FCICM(Grad) – Vice Chair

Glen Bullivant FCICM – Treasurer / Larry Coltman FCICM, Victoria Herd FCICM(Grad), Bryony Pettifor FCICM(Grad)

Advisory Council Sarah Aldridge FCICM(Grad) / Laurie Beagle FCICM / Kim Delaney-Bowen MCICM / Glen Bullivant FCICM

Lauren Carter FCICM / Brendan Clarkson FCICM / Larry Coltman FCICM / Victoria Herd FCICM(Grad) / Philip Holbrough MCICM

Laural Jefferies MCICM / Diana Keeling FCICM / Martin Kirby FCICM / Christelle Madie FCICM

Julie-Anne Moody-Webster MCICM / Debbie Nolan FCICM(Grad) / Bryony Pettifor FCICM(Grad) /Allan Poole MCICM

Phil Rice FCICM / Chris Sanders FCICM / Paul Taylor MCICM / Pete Whitmore FCICM

67 – ONE FROM THE ARCHIVE

Credit Management December 1972

included an article on the computer and

how it could aid best practice.

Publisher

Chartered Institute of Credit Management

The Water Mill, Station Road, South Luffenham

OAKHAM, LE15 8NB

Telephone: 01780 722910

Email: editorial@cicm.com

Website: www.cicm.com

CMM: www.creditmanagement.org.uk

Managing Editor

Sean Feast FCICM

Deputy Editor

Alex Simmons

Art Editor

Andrew Morris

Telephone: 01780 722910

Email: andrew.morris@cicm.com

Editorial Team

Imogen Hart and Iona Yadallee

Advertising

Grace Ghattas

Telephone: 020 3603 7946

Email: grace@cabbell.co.uk

Printers

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2018 subscriptions

UK: £90 per annum

International: £115 per annum

Single copies: £12.00

ISSN 0265-2099

The Recognised Standard / www.cicm.com / December 2018 / PAGE 3

EDITOR’S COLUMN

Overcoming a

herd mentality

Sean Feast FCICM

Managing Editor

I

love elephants. Did you know that

an elephant cannot run uphill,

spends up to 18 hours a day eating,

and as a result can generate about

a tonne of manure every week?

The biggest elephants can grow up

to three metres tall and weigh an incredible

7,500kg, making them the world’s largest

land mammal. These guys are big, so big

that if one wandered into the room, I think

you’d notice. Which makes me wonder why

it took so long for the debt advice sector to

spot such a little fella.

The elephant I am referring to in this

case is, of course, the issue of funding.

For some time now, there have been

mumblings off stage from certain creditors

and the collections industry as to the

efficiency of the debt advice sector, and

specifically those firms (both charitable

and otherwise) that benefit from the Fair

Share payments. Peter Wyman too, in his

recent report, made specific mention of the

need for the debt advice sector to achieve

greater efficiencies, and to do so quickly.

Whether Fair Share is ‘fair’ or not, or is

paid by those creditors who truly benefit,

is a separate debate; what those current

contributors want to know, is whether their

contributions are being spent delivering

front-line services, or being lost in an evergrowing

overhead of people and property.

The creditors’ argument is that debt

advisors fundamentally deliver the same

‘product’, and why do we need three or four

major players all doing the same thing? The

debt advisors, on the other hand, argue

with some justification that their services

are different, and complementary rather

than competitive.

Now sadly I can’t tell you StepChange’s

position (my entreaties unfortunately

went unanswered so I assume they must

be busy), but of those organisations that

did respond, it’s clear that future funding

is a major concern, and everyone has a

view on what this could look like. Reading

between the lines, they also seem very

aware of the need to justify why separate

organisations are preferred to one larger,

single entity, as has happened in other

sectors.

For the avoidance of any doubt, I am

not knocking the work that debt advisors

do in what are clearly very difficult and

challenging circumstances. (I have a

friend who probably owes his life to the

support he received from one debt advisor

in particular – ironically the one who

wouldn’t come back to me.) And demand

for their services, as we know, is only

going to increase.

But as I have learned from personal

experience, charities who work in similar

areas tend to jealously guard their right to

be there (think of The British Legion versus

Help for Heroes), and that is not always

in their beneficiaries’ best interests. Ego

can do funny things to people. What I also

know is that there are only so many times

that the pitcher can go to the well, and the

more pitchers there are, the more quickly

that well will dry up.

The elephant I am

referring to in this case

is, of course, the issue of

funding.


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CMNEWS

A round-up of news stories from the

world of consumer and commercial credit

Written by – Sean Feast and Alex Simmons

Companies House agrees

to act on Short-Firm Fraud

Philip King FCICM

Chief Executive of the CICM

“At this time of year

we see a number of

fake companies being

set up solely with the

purpose of acquiring

IT and electronics

goods by deception.”

PHILIP King, the Chief Executive of

the CICM, and James Campbell,

Secretary of The European Freight

Transport Association (EFTA)

have succeeded in their representations

to Companies House to challenge the

alarming increase in short-firm fraud.

Companies House will take steps to

display a more prominent warning on its

website regarding the efficacy and accuracy

of the information it holds, confirming that

such information has neither been verified

or validated. Companies House has also

agreed to create a dedicated email through

which businesses can raise concerns over

bogus accounts leintel@companieshouse.

gov.uk.

Philip King says the response from

Companies House executives was both

positive and encouraging: “Credit Managers

often rely on information from Companies

House to make important business

decisions, but need to be aware that such

information can, in fact, be fraudulent.

Credit Reference Agencies, similarly, use

information at Companies House to inform

their decision making, so it is in everyone’s

interest to ensure this information is

accurate.”

Short-firm fraud happens when

criminals set up an apparently legitimate

business intending to defraud its suppliers

and customers. Bogus accounts filed at

Companies House make the business look

substantial.

“Before Christmas, new orders and

new business opportunities tend to

increase. Fraudsters take advantage of

these busy periods, and natural ‘spikes’ in

activity, to commit crime. Only by sticking

to best-practice credit management, sharing

knowledge of risk with your employees in

what to look for, and being sure that you

‘know your customer’, can fraud be avoided.”

Philip says that some sectors are more at

risk than others: “At this time of year we see

a number of fake companies being set up

solely with the purpose of acquiring IT and

electronics goods by deception,” he says.

“Anyone witnessing a sudden and

unexpected increase in orders, or the

emergence of a new customer with whom

they have not previously done business,

should be alive to the potential for fraud,” he

adds.

gov.uk/government/organisations/

companies-house

THE Financial Conduct Authority (FCA)

has confirmed plans to extend access to

the Financial Ombudsman Service (the

Ombudsman Service) to more SMEs.

The changes will mean that SMEs with

an annual turnover below £6.5 million and

fewer than 50 employees, or an annual

balance sheet below £5 million, will now

be able to refer unresolved complaints to

the Ombudsman Service. Under the ‘nearfinal’

rules now published, around 210,000

additional UK SMEs will be eligible to

complain to the Ombudsman Service.

Respondents to the FCA’s January

FCA extends access to FOS for SMEs

2018 consultation strongly supported the

extension of the Ombudsman Service to

larger SMEs, charities and trusts, and a new

category of personal guarantors.

The changes will allow a wider number

of SMEs to access the service, so they can

seek redress. The criteria for access to the

service have been amended so that SMEs

must only meet the turnover test and one

of either the headcount or balance sheet

total tests, not all three tests as previously

proposed. The FCA made this change in

response to feedback that applying all three

tests would unfairly exclude certain types

of SME, for example those with relatively

low turnover but 50 or more employees.

The FCA has published near-final rules,

so the Ombudsman Service can start

taking practical steps towards putting the

extension of its remit in place, including

starting recruitment of additional staff with

the skills and experience required. The

FCA intends to publish final rules later this

year, following its normal scrutiny of the

Ombudsman Service’s draft business plan

and budget. It expects the final rules on the

SME extension to come into force on 1 April

2019. fca.org.uk


New team for the digital market

ATRADIUS and Kemiex have launched a

digital trading platform for raw materials in

the pharma, vet, food and feed industries.

Positioned as a new digital market place,

the platform enables buyers and sellers of

Active Pharmaceutical Ingredients (APIs)

and additives to identify reliable trade

partners and to trade safely. Atradius will

offer support by providing credit risk

insight and trade insurance for trade

partners.

The platform has been designed as an

alternative for existing trading procedures

that are often time consuming, prone to

errors and might be limited to personal

networks. Atradius and Kemiex also

anticipate the need in the human and

animal health and nutrition industries to

comply with strict regulations relating to

quality control. Atradius contributes to the

safety and transparency of the platform

by providing trade insurance for single

transactions through one click on the

Kemiex platform.

The organisations claim that the main

benefit is that buyers and sellers can do

business with reliable parties that comply

with relevant regulations and quality

controls and are credit worthy. Kemiex

estimates whether a company on the

platform complies with quality standards,

whereas Atradius analyses the credit

worthiness of those acting on the platform.

Together, they evaluate companies, their

transactions and the behaviour of traders

in order to ensure that transacting on the

platform is as safe as possible.

atradius.co.uk kemiex.com

>NEWS

IN BRIEF

Senior appointment

TWO Fellows of the Chartered Institute

of Credit Management have been

confirmed in senior positions in the

industry. CICM Executive Board member

and Vice Chair Debbie Nolan FCICM(Grad)

has been appointed as Chief Executive

of Arvato Financial Solutions. She joined

the integrated financial services solutions

company seven years ago as Business

Development Director before becoming

Commercial Director. Colleague and

CICM Chair Pete Whitmore FCICM, has

become Head of Credit Services, EMEA

for Westcon Group. He started as Credit

Risk Manager two years ago at the cloud

solutions provider, and then held the

position EMEA Credit Risk Manager.

arvato.com uk.westcon.com

Climb in complaints

COMPLAINTS against FCA regulated

companies continued to increase for the

fourth successive half year, reaching a

new record level of 4.13 million made

to 3,161 firms. This was a ten percent

increase compared with the previous

six-month period; 98 percent of the

complaints were made to 235 firms. PPI

continued to be the most complained

about product, accounting for 42 percent

of all complaints. The next most

complained about products are current

accounts (15 percent), credit cards

(eight percent) and motor and transport

insurance (six percent). fca.org.uk

£20k Exporting grant

FEDEX Express is offering a grand prize

grant of £20,000 and runner-up prize of

£10,000 to UK SMEs that demonstrate

how they plan to grow their business

internationally. To stand a chance of

winning, business owners must be ready

to provide details on what inspired them to

start their company, their ethical standards,

as well as a clear strategic vision of future

international growth. To apply for the Small

Business Grant, business owners should

register online and demonstrate their

ambitions to FedEx’s judging panel. The

winner and runner-up will be announced on

24 January 2019. uk.grant.fedex.com

New authority

THE leading retail payments authority

in the UK – formerly known as the New

Payment System Operator / NPSO – has

been rebranded as Pay.UK. Its remit

includes working in the public interest

to ensure that the systems the country

relies on for its banking transactions are

safe, open, innovative and resilient. In

2017 it processed more than eight billion

transactions worth £6.7 trillion, through

Bacs Direct Credit, Direct Debit, Faster

Payments, cheques and Paym.

wearepay.uk

CICM index

THE CICM is looking at ways of developing

its current Credit Managers’ Index (CMI)

programme to embrace all areas of the

commercial and consumer credit industry

and include benchmarking statistics. The

Institute welcomes ideas from members to

governance@cicm.com.

CSA recognised for 'outstanding' levels of service

THE Credit Services Association, the

voice of the UK debt collection and

debt purchases sectors, has registered

‘outstanding’ customer service levels

in its first ever assessment under the

independent Investor in Customers (IIC)

assessment process.

In being granted a Silver Award, the CSA

had to demonstrate a strong understanding

and desire to meet its members’ needs.

It was especially strong in the area of

‘delighting’ its customers in matters of

treating customers fairly, and when it came

to ‘engendering loyalty’ it was recognised

for building quality relationships. In both

of these sub categories it attained the Gold

standard.

Comments from customers included:

“Good service, clear user-friendly

information, great people”;

“The CSA provides excellent advice and

resources. We are kept up-to-date with any

industry changes or new requirements”;

“The CSA is a valuable service that

champions on our behalf at times when

we may not have a voice”; and “I would

have no hesitation in recommending the

Association to others, and have already

done so on a few occasions.”

IIC is an independent assessment

organisation that conducts rigorous

benchmarking exercises. These exercises

determine the quality of customer service

and relationships across a number of

dimensions, including how well a company

understands its customers, how it meets

their needs and how it engenders loyalty.

IIC also compares and contrasts the views

of staff and senior management to identify

how embedded the customer is within the

company’s thinking.

Peter Wallwork, Chief Executive of the

CSA is delighted with the Award: “To be

recognised by the IIC for the way in which

we deliver our service is a great accolade

and a tremendous reflection on the hard

work, dedication and commitment of the

head office team.” csa-uk.com

“Good service,

clear user-friendly

information,

great people”


NEWS

IN BRIEF

FENCA adopts

GDPR code

THE Federation of European National

Collection Associations (FENCA) has

formally adopted a Code of Conduct to apply

the rules of the General Data Protection

Regulation (GDPR) to the debt collection and

debt purchase sectors. Acknowledged in this

endeavour by European Commissioner for

Justice, Consumers and Gender Equality Věra

Jourová, FENCA is one of the first European

trade bodies to develop a Code of Conduct,

as encouraged by Article 40 of the GDPR. In

close exchange with national Data Protection

Authorities, FENCA will now embark on the

official process of adoption of the GDPR Code

of Conduct by the European Data Protection

Board. fenca.eu

Soggy bottom line

THE total pre-tax profits at the UK’s Top 100

restaurants have plunged 80 percent in the

last year to just £37 million, down from £194

million 12 months ago, research shows by

UHY Hacker Young. The drop means that

pre-tax profits at the UK’s Top 100 restaurant

groups have now fallen 89 percent from £345

million since the first quarter of 2017. UHY

Hacker Young says that the cost of closing

struggling sites has weighed heavily on the

profits of restaurant groups over the past two

years. Household-name groups including

Gaucho, Strada, and Prezzo have all shut a

number of outlets in recent months as the

casual dining sector deals with overcapacity.

uhy-uk.com

Services slowdown

THE UK’s service companies grew by their

slowest pace in seven months in October,

according to IHS Markit's Purchasing

Managers' Index (PMI). The PMI for services

fell from 53.9 to a seven-month low of 52.2,

below City expectations of 53.8. A reading

above 50 indicates growth. Optimism levels

among UK executives also fell to their lowest

point since July 2016.

ihsmarkit.com/products/pmi.html.com/

products/pmi.html

The same cloth

DESPITE Archbishop of Canterbury Justin

Welby saying in 2013 that the Church would

look to compete with payday lenders and

drive them out of existence, figures show that

just 8.8 percent of Anglican churches have

any involvement in social financial projects

or offer debt advice, while only two percent

run advice or lending operations.

CICM and ITN combine

to present 'Credit Experts'

THE Chartered Institute of Credit

Management (CICM) has once again

partnered with ITN Productions to

create a new flagship news-style

programme entitled ‘Credit Experts.’

Presented by national newsreader,

Natasha Kaplinsky, ‘Credit Experts’ will

explore the vital role credit management

plays in keeping businesses in business, will

showcase the latest innovative technologies

and best practices facilitating effective

customer outcomes, and will highlight

industry-leading knowledge and guidance

that is vital for sustaining and growing a

successful business landscape.

The news-style piece will combine key

interviews and reports with sponsored

editorial profiles from leading organisations

and will premiere during Credit Week in

March 2019.

Philip King, Chief Executive, CICM says

now, more than ever, credit professionals

are needed to help guide businesses, large

and small, through unchartered waters and

an uncertain future post-Brexit: “Hearing

from those professionals, learning about

best-practice credit management, and

exploring the increasing role of AI and other

technologies in enhancing the customer

Financial boost for apprenticeships

THE Chancellor has announced the new

rates of National Minimum Wage, National

Living Wage and Apprentice Minimum Wage

from April 2019 as recommended by the Low

Pay Commission (LPC). The LPC estimates

that the increase for the Apprentice

Minimum Wage of 20 pence (5.4 percent) will

benefit up to 36,000 apprentices.

The ten percent fee that small businesses

must pay when they take on apprentices will

also be halved. SMEs will only contribute

five percent to the training, as part of a ‘£695

million package to support apprenticeships’.

Up to £5 million is going to the

Institute for Apprenticeships and National

Apprenticeship Service in 2019-20, to

‘identify gaps in the training provider market

and increase the number of employerdesigned

apprenticeship standards available

to employers’. A figure of £20 million has

been allocated to new ‘skills pilots’ which

will include a £3 million scheme to help

‘employers in Greater Manchester and

surrounding areas to address local digital

skills gaps through short training courses’.

There will also be a £10 million pilot in

Greater Manchester, working with the FSB, to

‘test what forms of government support are

most effective in increasing training levels

for the self-employed’.

A £7 million match funding pilot ‘alongside

employers to provide on-the-job training to

young people not currently in employment,

education or training in Greater Manchester,

and to move them into sustainable career

paths with employers’.

Launch of new Export competition

THE Institute of Export & International

Trade (IOE&IT) has launched the 10th ‘Open

to Export Competition’ – an opportunity for

UK companies to take ownership of their

international strategies and win £3,000

towards implementing them.

Sponsored by Bibby Financial Services

(BFS), ‘Taking UK Plc to the World’ asks

SMEs to create an international strategy

using the online ‘Export Action Plan’ tool

on OpentoExport.com. The tool encourages

companies to take decisions along each step

of their international trade journey – from

journey will make this a compelling

programme.”

Elizabeth Fisher-Robins, Head of Industry

News, ITN Productions, says this programme

builds on the success of ‘Credit Champions’:

“We hope this programme continues to

spotlight the importance of excellent

credit management in supporting business

success and the wider UK economy.”

The programme builds on the success

of ‘Credit Champions,’ a launch initiative

broadcast earlier this year.

For more information, or to participate

in the programme contact James Linden,

Director of UK Programming at ITN

Productions on 0207 430 4228 or

james.linden@itnproductions.com.

selecting a market to delivering products or

services to new customers.

Companies have until 25 January to

enter their ‘Export Action Plans’ into the

competition – giving them all of Christmas

and the key planning month of January. Ten

shortlisted finalists will then be invited to

pitch their businesses at a showcase final at

the end of February. The finalists will pitch

to a panel of expert judges about how they

would use the £3,000 cash prize.

export.org.uk

bibbyfinancialservices.com


Cedar Rose launches new

late payer warnings app

>NEWS

IN BRIEF

CEDAR Rose has launched a new scoring

system that allows suppliers to rate

business transactions through its ‘Trade

Rate’ system which aims to provide a

more efficient and robust credit reporting

service.

By searching for a company at cedarrose.com,

visitors will see whether

information on the customer is already

available, and the date of any data already

held. By selecting the Trade Rate tab,

users can then rate their customer’s

payment history using a star scoring

system. Companies can be rated from

one to five, depending on whether or not

the client adhered to pre-agreed payment

terms. Once the ratings are verified by the

credit analysts and at least two ratings

are received on the subject from different

sources, the rating will show in the subject

company’s credit report.

Trade Suppliers can also give a full

reference on a company including their

agreed payment terms, maximum credit

limit amount, average invoice amount,

business trend and usual payment

method by completing a simple form.

There is also the opportunity to add

comments, which the user can decide

whether to share with future purchasers

of the credit report, or leave just for

Cedar Rose’s analysts to view. All ratings

subsequently shown in a credit report are

provided anonymously. cedar-rose.com

Once the ratings are

verified by the credit

analysts and at least

two ratings are received

on the subject from

different sources, the

rating will show in the

subject company’s credit

report.

Tech Committee

THE CICM Technical Committee met on

6 November and discussed a number of

important topics including: BEIS Call

for Evidence on Creating a responsible

payment culture; launch of a further

HM Treasury consultation on ‘Breathing

Space’; HMRC returning to the list of

‘Preferential creditors’ from April 2020

and updates on the progress of Pay.UK

and its plans for the payment space. The

Committee also discussed the process,

rules and risk around insolvency

petitions and their advertising; and the

Government announcement on new

measures to boost funding for small

businesses with new laws to arm small

businesses against unfair contracts that

stop them raising money from unpaid

invoices.

Starling murmurs

STARLING Bank has become the first

mobile-only bank to partner with the Post

Office to offer everyday banking services to

its customers. The partnership will allow

Starling current and business account

customers to deposit and withdraw cash

through the Post Office’s 11,500 branches

nationwide. Starling’s business account

customers will be able to see near ‘real

time’ credit into their account from their

cash deposits into Post Offices. It brings

the total number of banks now part of

the Post Office’s Banking Framework

to 28, helping to provide vital access to

banking services, especially in those 1,500

communities across the UK which are

without a bank branch. stateofflux.co.uk

ALARM BELLS

TWO firms that were behind nearly 600,000 nuisance calls attempting to sell home security

systems to people registered with the Telephone Preference Service (TPS), have been fined

a total of £220,000 by the Information Commissioner’s Office (ICO). ACT Response from

Middlesbrough was behind 496,455 live marketing calls to TPS subscribers and has been

fined £140,000. There were 128 complaints made about the company between January

2017 and February 2018. Secure Home Systems (SHS) of Bilston, has been fined £80,000 for

making calls to 84,347 numbers registered with the TPS between September and December

2017, using call lists bought from third parties without screening them. People made 268

complaints about the company over a two-year period. ico.org.uk

CICM to chair conference

THE CICM will once again host a Trade

Credit Conference as a key event supporter

of Credit Week 2019 (18-22 March).

CICM Chief Executive Philip King will

chair discussions that examine the credit

management lifecycle, perspectives on

building an effective credit management

team and regulatory updates.

Philip said he was delighted to be

supporting the week-long series of

conferences, meetings and networking

events: “The series of events bring together

leading consumer and commercial credit

professionals from Europe and beyond, and

provides a great opportunity for networking,

learning and sharing of best practice.

“All of these are fundamental to the

objectives of the CICM and this is a great

example of a professional body working with

a commercial organisation for the benefit of

the credit community.”

The CICM Trade Credit Conference, part of

the Credit Summit, will take place at the QEII

Centre in Westminster on 21 March 2019.

Measuring up

BIBBY Financial Services (BFS) has

provided a funding package of £500,000

to Haddow Group, a West Yorkshire based

clothing manufacturer which designs and

supplies lifestyle products for some of the

UK’s top high street retailers. Based in

Bradford and founded in 1986, the familyrun

business produces a variety of interior,

swimwear, nightwear and beauty ranges for

retailers. Haddow Group has experienced

significant growth since its creation and

now employs a team of around 60 people.

bibbyfinancialservices

CICM INBRIEF

THIS month's briefing includes details of the

new programme with ITN Productions called

Credit Experts, a survey re the BEIS Call for

Evidence, a guest blog by Emma Lovell, Chief

Executive of R3, and an article from Karen

Young from Hays on the benefits of having a

career mentor.


HMRC preferred

status to be restored

THE Chancellor’s plan to give HMRC

preferred status in company

insolvencies has led to dismay

from senior members of the

insolvency profession.

Chief Executive of R3, Emma Lovell,

says the proposal would be a retrograde

and damaging step to UK plc if not thought

through carefully.

“It will amount to a tax on creditors,

including small businesses, pension funds,

suppliers, and lenders, and reverses a status

quo that has been encouraging business

rescue since 2002,” she says. “It may also

make borrowing for small businesses

harder to come by.”

R3’s members say that HMRC could do

more to engage actively in insolvency

procedures, and at an earlier stage. HMRC

has a wide-ranging toolkit to help it to

tackle abuse and evasion, which could be

used more fully, instead of forcing its way to

the top of the queue by legislation.

“HMRC considers itself to be an

‘involuntary creditor’ of businesses, because

it cannot choose which companies to

engage with,” Emma continues. “However,

all suppliers to businesses are ‘involuntary

creditors’ and have to take commercial

risks, and this announcement will

hugely increase the risks taken by small

enterprises trying to do business.”

The Government has moved in recent

months to improve and strengthen the

UK’s business rescue framework, which R3

has welcomed. However, Emma feels this

announcement risks throwing away much

of the recent progress that has been made.

“We hope that the Government will

reconsider this move and listen to concerns

of the insolvency and restructuring

profession as it consults on the issue over

the coming months.”

Frances Coulson goes into more detail on

page 19.

gov.uk/government/organisations/hmrevenue-customs

Emma Lovell

Chief Executive Officer at R3

Debt deceit by nearest and dearest

ALMOST one fifth of Brits (19 percent) would

never inform a partner of their debt situation,

according to research by Equifax. The survey

found those aged 65 and over (29 percent)

are almost twice as likely as those aged 18-24

and 35-44 (both 12 percent) not to reveal their

debt to their significant other.

Only a third of respondents (32 percent)

would inform a new partner of their debt

situation within three months of beginning

a new relationship. Of those, men are more

forthcoming than women – 37 percent vs 27

percent respectively.

Furthermore, over a third (35 percent)

of people who are either married or in a

civil partnership do not have a shared

bank account, with the proportion rising

considerably for people earning less than

£20,000 (71 percent).

Meanwhile, similar findings from research

by the Money Advice Service reveals UK

adults are hiding more than £96 billion of

debt from their friends and family, with the

average amount of hidden debt in the UK

standing at £41,643 per person.

Of those in a relationship, almost a third

(29 percent) say their other half does not

know about all the money they owe. And

five percent admit that their partner is

completely in the dark about their debts.

Almost half (47 percent) say their close

friends don’t know they have any debts at all.

Men are less likely than women to open up

about it; half (50 percent) of men admit that

their close friends don’t have a clue about

their debts, which is seven percentage points

higher than women (43 percent).

The research finds that credit cards

account for the largest quantity of hidden

debt (48 percent). Personal loans from a

bank or building society (17 percent), an

overdraft (16 percent), money owed to friends

and family (12 percent) and store cards (11

percent) follow. Meanwhile, eight percent of

all those with debt hide payday loan debt.

equifax.co.uk

>NEWS

IN BRIEF

Bean counting

UK consumers are spending less

on habitual leisure activities such

as drinking coffee and eating out

compared to last year, according to the

latest findings from Deloitte’s ‘Leisure

Consumer Q3 2018’ report. The quarterly

survey of 3,105 UK leisure consumers

also revealed that, while overall spending

was flat compared to Q3 2017, consumers

increased their spending in both ‘culture

and entertainment’ and ‘gym and sport’

by two percentage points, with the boost

likely caused by the dry weather over the

summer months. Consumers reported

spending less on drinking in coffee shops

than they did in Q3 2017, falling by three

percentage points. In addition, eating and

drinking out saw a two percentage points

fall in net spending year-on-year.

deloitte.com/uk/en.html

Real-time ID checks

EQUIFAX has teamed up with open

banking technology provider consents.

online to allow it to match customer

data and transactions in real-time.

Users will be able to match identity

information such as the consumer’s

name, address and date of birth with

transaction data provided through

open banking, helping them verify who

someone is faster and help avoid fraud.

It will be used within Equifax’s bank

account verifier system that lets lenders

compare sort codes and account

numbers to its own database.

equifax.co.uk

Service charge

SERVICE exports increased to £72.3

billion in the second quarter of 2018, up

from £66.9 billion in the first quarter, and

up from £68.6 billion during the same

period in 2017, according to the Office for

National Statistics (ONS). Exports to the EU

increased by more than any other region

between the first and second quarter.

However, the US remained the UK’s largest

single country trade partner, buying £15.2

billion of British services in the second

quarter. ‘Other business services’ –

including legal, accounting and advertising

– was the biggest type of exported services,

followed by financial services. ons.gov.uk

PPI payout

A total of £3.7 billion has been paid out

following PPI claims since the Financial

Conduct Authority (FCA) launched its

campaign to promote consumer action,

with monthly volumes up 40 percent

since the launch. Since 2011 more than

£30 billion in redress has been received

by consumers.

fca.org.uk


Bailiff research ridiculed as

‘mathematical gymnastics’ by

enforcement leader

A

senior business leader has

slammed research from Citizens

Advice into the use and actions of

bailiffs as ‘clever, mathematical

gymnastics’ after the charity reported a

24 percent rise in bailiff complaints since

2014 and cited more than half a million

examples of where bailiffs have breached

current rules.

Russell Hamblin-Boone, Chief Executive

Officer of the Civil Enforcement Association

(CIVEA), took the charity to task: “Citizens

Advice has used clever, mathematical

gymnastics to come to the figure of a rule

broken by bailiffs every minute,” he says.

“Bailiffs collected 12 million debts over

the years quoted in the report, so it is

wrong to make those sweeping judgement

about bailiffs who operate against tight

regulations.”

The research took the form of a poll by

YouGov involving 277 people. It suggested

that bailiffs are flouting the laws in a

number of cases, by refusing to accept

affordable payments, misrepresenting their

rights of entry, and taking control of goods

inappropriately. The purpose of the report

was to show that 2014 reforms haven't

worked, and new regulation was required.

Gillian Guy, Chief Executive of Citizens

Advice, says too often bailiffs, and the firms

they work for, are a law unto themselves:

“This is inflicting widespread harm on

people and their families and it has to stop.

“The 2014 reforms were well intentioned

but sadly have had little effect on

improving the behaviour of some bailiffs,”

Mrs Guys adds. “Faced with the evidence

we’ve put in front of them, the Ministry of

Justice has no other option but to establish

an independent bailiff regulator.”

Phil Andrew, StepChange Debt Charity

Chief Executive, agrees: “This is completely

unacceptable, especially as the people

on the receiving end are often distressed,

vulnerable and unempowered. Across the

debt advice sector, we are united in the

view that it’s now time for regulation to be

more robust, and for the rules to be properly

enforced. Even some bailiff firms seem

to be realising that the days of informal

regulation need to end.”

But Russell takes a very different stance:

“Some of the things that Citizen’s Advice

are saying is happening are illegal, so why

aren’t they being reported to the Police? We

record our bailiffs – they have video badges

on their jackets and that is reviewed on a

daily basis to make sure they are following

the rules appropriately.

“A visit by an enforcement agent is

always the last resort. In order to receive a

visit you must have ignored final demands,

emails, phone calls and texts. Of course,

agents need to be assertive when chasing

down people who refuse to pay their

council tax or court fines. But if there

is any genuine evidence that agents are

acting illegally then we will investigate

and take the necessary action. But if we

are to continue working together to drive

up industry standards, we must avoid an

emotionally-charged debate and instead

focus on robust facts and strong evidence.”

Citizens Advice has used

clever, mathematical

gymnastics to come to the

figure of a rule broken by

bailiffs every minute.

>NEWS

IN BRIEF

FECMA APPOINTMENT

CHIEF Executive of the CICM, Philip King,

has been elected as Vice President of

Federation of European Credit Managers

(FECMA) during the meeting of its council

in Budapest. He will be serving a second

term as one of the two Vice Presidents.

fecma.eu

Unsustainable

SOME eight in ten organisations are

struggling to include sustainability in their

supply chain management, according to

research by State of Flux. The annual report

surveyed more than 300 organisations

and found only five percent of these can

be classed as ‘leaders’ in supply chain

sustainability. The report also revealed that

47 percent of organisations do very little

or no joint work with suppliers to manage

sustainability. stateofflux.co.uk

Flashing the cash

UK Finance data shows that consumers

spent £10.7 billion using credit cards in

September – the highest monthly total

since records began in 1997. This came

in a month where the amount of money

placed into savings accounts climbed by

0.9 percent, the smallest increase since

2007. Contrastingly, growth in consumer

credit has slowed to its lowest level in

more than three years. Bank of England

data showed that personal borrowing via

loans and credit cards was up 7.7 percent

on an annualised basis in September, the

lowest rate since June 2015. It is also well

below the peak of 10.9 percent recorded in

November 2016. ukfinance.org.uk

Self-employed exhibit debt dilemma

A growing number of small business

owners and self-employed people are

facing high levels of debt as they struggle

to keep their businesses afloat, according

to research from Business Debtline.

Findings show that half (49 percent)

of the people contacting the service last

year had debt totaling £10,000 or more,

with nearly a quarter (23 percent) owing

more than £30,000.

Issues such as late payments, low

and variable incomes and a lack of

essential business management skills are

identified as some of the key challenges

that can lead to financial difficulty and

in some cases business failure. Both

business and personal debts are common

amongst the people helped via Business

Debtline, with the two often intermixed,

further complicating their situation.

While the people helped by Business

Debtline had a wide income range, 39

percent had gross business annual

turnover below £25,000. Low and irregular

income were major challenges and often

prevented small business owners from

saving, investing in the business and

having the financial resilience to deal

with changes in circumstances such

as ill health. More than six in 10 callers

surveyed (61 percent) said they had used

personal credit at some point to pay for

business costs in the past two years.

Nearly half (45 percent) of callers

to Business Debtline surveyed said

they experienced problems with late

payments, where they are uncertain

when the money they have earned

will be paid. The issue was common for

both sole traders and company directors.

Before starting trading, most felt

confident completing a budget (80

percent) but they were less confident

constructing a business plan (59 percent)

and completing tax and VAT returns

(47 percent). After seeking advice from

Business Debtline, 82 percent of callers

reported that they felt more in control

of their finances, with 86 percent saying

they were less likely to find themselves

in a similar situation again.

A significant proportion (69 percent)

considered themselves to be in a

vulnerable situation. Financial difficulty

was the main reason given, with

depression, anxiety and stress commonly

cited. For many, being in a vulnerable

situation caused them to struggle to

trade, further impacting their income.

businessdebtline.org


INSOLVENCY

Budget 2018

The potential impact on insolvency following

the budget announcement.

AUTHOR – David Kerr MCICM

David Kerr

IN among Philip Hammond’s

jokes and the headlines about

the ending of austerity, one of

the main points likely to attract

interest from creditors is the

announcement regarding the

position of HM Revenue & Customs

in insolvencies. In a surprise move,

after dealing with the new digital tax

on corporate giants in his speech, he

switched to a measure that seems to be

characterised as part of a push on tax

avoidance, saying:

‘We must also make sure people play by

the rules. We’ll make HMRC a preferred

creditor in business insolvencies to

ensure that tax which has been collected

on behalf of HMRC is actually paid to

HMRC.’

This is not a criticism of insolvency

practitioners. The Government removed

the Revenue’s preferential status some 15

years ago as part of an initiative to boost

enterprise and allow more money in

insolvency cases to flow through to other

creditors. At the same time it introduced

the prescribed part rules so that the tax

man’s sacrifice wasn’t entirely eaten up by

secured creditors with floating charges.

While some see the return of HMRC’s

preferential status as a backward step,

it might be viewed in conjunction with

an intention to increase the value of

the prescribed part, and perhaps more

widely in the context of other businessfriendly

Budget measures. Irrespective

of the merits of the Chancellor’s move

(and the Treasury’s argument that this

money should go to fund public services

‘as intended’) and bearing in mind that

the Finance Bill has yet to be passed, the

limited information published to date

makes interesting reading.

The taxes at the heart of the measure

are VAT, PAYE/NIC and construction

industry scheme monies collected or

deducted by companies and not passed

over to HMRC at the commencement of

insolvency. Non-payment of such monies

is already a consideration in director

disqualification cases, but that hasn’t

stopped directors using those funds to

finance trading when companies are in

distressed situations. Other tax payable

by the business is not affected.

The proposed change (alongside other

tax avoidance rules targeted at directors)

will come into force on 6 April 2020, so that

in respect of insolvencies commencing

on or after that date the new preferential

status will apply.

UNSECURED CREDITORS?

A key element of the new proposal is that

in respect of the affected taxes, HMRC’s

preferential status will be secondary to

existing preferential creditors such as

the Redundancy Payment Service. So, the

creditors impacted will be floating charge

holders and ordinary unsecured creditors.

Treasury makes the point that lending

to businesses should not be affected in a

‘material’ way, as fixed charges holders

are unaffected, and the reduced recovery

by floating charge holders represents only

a ‘very small fraction’ of total lending;

some may disagree.

There will of course be a negative

impact on unsecured creditors, but

Treasury argues that most will not be

affected as they are usually unable to

recover their debts in any event (only

four percent of debts owed on average,

it states). Some might argue with these

figures and their assessment of the impact

on unsecured creditors; inevitably, those

cases which produce dividends will

in future be likely to produce smaller

dividends (or none at all) for those at the

bottom of the insolvency pecking order.

It is interesting to be returning to

something that existed for the first half

of the 30-year period since the 1986

Insolvency Act. There is some clue to the

Government’s thinking in the wording

of the HM Treasury statement which

suggests these taxes ‘paid in good faith by

(a business’s) employees and customers’

are ‘held on trust’ by the business. There

has not been any suggestion that they

will be regarded as trust monies in a

way that would create all sorts of legal

complications, merely a hint that HMRC

has a moral case for jumping the queue

and claiming its dues (estimated by

Treasury to be £185 million per annum)

on behalf of the Great British public and

taxpayers.

Finally, there has been no published

information at this stage suggesting a limit

on the new preferential claims, unlike

the position with Revenue preferential

creditor claims pre-2003; also, while

the announcement refers to businesses

and could in theory cover individual

insolvent traders, the focus appears to

be on corporate insolvencies. Further

clarification is awaited on these points.

David Kerr MCICM is an insolvency

practitioner with extensive regulatory

experience.

We must also make

sure people play by the

rules. We’ll make HMRC

a preferred creditor in

business insolvencies to

ensure that tax which has

been collected on behalf

of HMRC is actually paid

to HMRC.


OPINION

First impressions

Philip King FCICM reflects on a busy and exciting

year for the CICM, and a series of ‘firsts’.

Philip King FCICM

THEY say that time flies when

you’re having fun. That may

be the case, and often is,

and it is certainly true that

12 months can go by in a

flash when you are busy,

and the Chartered Institute of Credit

Management has probably had one of

its busiest years since I became Chief

Executive in 2006.

Three key purposes of the CICM are

to raise awareness of the importance of

credit management, drive best practice,

and support credit professionals as their

careers develop.

The launch of our Credit Champions

documentary at the start of the year

ticked all three of those boxes and

more. A collaborative initiative with ITN

Productions, it was launched to wide

acclaim at the Credit Summit in March,

and is a programme we are looking to

revisit in 2019.

Indeed 2018 was a year of significant

‘firsts’: our first venture into television

documentaries; the launch of our

Knowledge Hub, providing members and

subscribers with access to more than 1,000

knowledge resources covering the entire

credit management lifecycle; and the

launch of our CICM Mentor Hub, a simple

yet highly-practical way of matching

suitable mentors and mentees.

We also launched our new CICM branch

in Ireland, (see November 2018 news), and

I have been delighted with the enthusiasm

shown by the newly-appointed officers and

the levels of engagement already being

realised.

The thirst for knowledge around

best-practice in credit management, not

just in the UK but also internationally,

was evidenced by the broad spread of

nationalities represented in recent exams.

Students in no fewer than 17 different

countries, from the UK to the US, chose the

education pathway offered by the CICM,

confirming in my mind the essential

role that the CICM continues to play in

delivering real expertise.

That does not mean we can rest on

our laurels, and as you can read on

page 46, we are continually looking at

how our qualifications can be further

enhanced to meet a new generation of

credit professionals, as well as how we can

support a growing number of apprentices.

Closer to home, we celebrated yet

another successful event with our CICM

British Credit Awards and look forward to

announcing our 2019 Awards winners in

February. The Awards continue to grow in

popularity, as does our CICMQ accreditation

scheme that delivers real evidence of bestpractice

credit management in action.

Of course, we have had our challenges

this year too. I do not always find myself

in agreement either with my Peers in other

leading business organisations, or with our

MPs and public servants. I am continually

frustrated by the late payment debate

being hijacked as a point-scoring exercise

without any real understanding of what

can be a very complex issue.

I will say, however, that by debating

the issue, and challenging other people’s

opinions, we are also managing to promote

the importance of credit management, and

I will continue to champion the value that

professional credit managers can add to

building better businesses.

With that in mind, I wish you all a Merry

Christmas and a happy and prosperous

New Year.


OPINION

Plus Ça

Change?

Is it time for the larger free debt

advice organisations to merge or will

they continue to ignore the elephant in

the room?

AUTHOR – Sean Feast FCICM

ASK anyone working in

consumer credit about the

debt advice sector, and you’re

likely to hear a broad range

of views, especially when

it comes to how free debt

advice is funded. Amid the calls for a

more level playing field, and for Fair

Share payments to be – well – fair, there

are also murmurs that the sector should

stop squandering limited resources and

consolidate (see boxed out section).

Certainly they would not be the first to

see consolidation as a logical next step. One

only has to think of the examples of Age

Concern and Help the Aged, pooling their

resources and coming together as Age UK, or

the consolidation that led to the creation of

Cancer Research UK.

There are also examples closer to

home. In July 2017, UK Finance came

into being, bringing together various

disparate financial bodies (including the

British Bankers Association, The Asset-

Based Finance Association, the Council of

Mortgage Lenders, the UK Cards Association

etc) under one roof. Stephen Jones, the UK

Chief Executive said at the time that ‘…the

boundaries between banking services are

blurring, enabling the industry to become

more efficient and customer-focused.’

The argument at the time was that

consolidation would save money, maximise

resources, and bring a single, more powerful

and more unified voice to government in what

are essential services for business growth.

Whether it has succeeded in its mission is

rather difficult to tell, and approaches to the

UK Finance Press Office have yielded little

(or indeed nothing) in the way of supportive

facts. Instinctively, however, it feels like the

right thing to have done, even if some of the

larger directors’ salaries do not seem to have

completely disappeared.

Consolidation in the debt advice sector, it

is argued, could similarly save considerable

amounts of cash, and this is money that

could be better spent in supporting the

customer. A glance at various publicly

available accounts might suggest where

savings could be realised.

The outgoing CEO of StepChange Debt

Charity, for example, reportedly earned

more than £180,000 in 2017 (according to its

annual report), while the total remuneration

to senior staff was just shy of £1.2 million.

The chief executive and two deputy chief

executives at the Money Advice Trust (MAT),

by comparison, earned more than £270,000

between them.

Christians Against Poverty (CAP), meanwhile,

states in its annual report that the

total remuneration paid to its four key

management personnel totalled c£300,000

in 2017. If we add to these numbers the

salary of the highest-paid director of Payplan

(Payplan is not a charity but still receives

industry funding) – a salary it should be

noted that has risen by almost 70 percent in

the last 12 months to more than £190,000 –

then c£2 million is paid out to fewer than 30

people. And that figure does not take into

account pension contributions, dividends

etc.

Good people cost money, and there is

nothing to suggest that these executives don’t

earn every penny and possibly more besides.

(There is arguably something incongruous

about high-earners providing services to

the least well-off, but that’s a story best left

to the Red Tops.) And while salaries will

grab the headlines, the real cost is in the

infrastructure and cost of operations.

StepChange has a dozen or so offices

in the UK and employs c1,500 staff. MAT

employs 190. CAP a further 260 at its head

office. Start adding up the staff costs and

total expenditure, and it doesn’t take long

to see that tens of millions of pounds are

being spent by multiple organisations who

are effectively endeavouring to deliver

fundamentally the same thing – helpful debt

advice to struggling consumers.

Those organisations might themselves


OPINION

Sean Feast FCICM

Not so Fair

DEBT Buying members of the Credit Services Association (CSA) are on

target to contribute at least £25.5 million in voluntary ‘Fair Share’ payments

in 2018 to help fund free-to-customer debt advisers, according to latest

statistics.

This is an increase on the 2017 total of £23 million which at the time

represented 46 percent of the £50 million the Money Advice Service (MAS)

reports as contributed by the financial services sector in its entirety to

StepChange Debt Charity, PayPlan and Christians Against Poverty.

The contribution, which has risen from c£15 million in 2016, an increase

of 70 percent, has led some senior debt industry executives to question

both the existing funding model and whether the debt advice sector itself

should be re-organised.

“The industry is paying more than its fair share of ‘Fair Share’, and not

shirking its responsibilities,” says John Ricketts, President of the CSA. “In

fact, our members’ voluntary Fair Share contributions, when added to the

recent substantial increase in the Financial Conduct Authority levy on debt

buyers to directly fund the Money Advice Service (MAS), means that debt

buyers are being asked to contribute a total of £30 million to help fund debt

advice in the UK.

“Where we should really be looking is at the effectiveness and efficiency

of a fragmented debt advice sector who all fundamentally deliver the same

thing. There certainly needs to be an ongoing review of how all free-to-use

debt advice is funded in the future – it needs to be fair and proportionate

funding from all sectors that benefit including Utilities, Local Authorities

and Central Government.

“But there also needs to be a root and branch review of how debt advice

is delivered and whether consolidating and therefore simplifying those

activities will deliver a better, more cost-effective and more sustainable

service to the consumer. We remain committed to working with the

regulator, the MAS and the debt advice sector in finding a fair, workable

and sustainable long-term funding solution.”

Additional reporting by Ali Bond.

argue, with some justification, that their

services are different. Joanna Elson OBE,

Chief Executive of MAT, says that each charity

has different models and channels, and that

their services are complementary. “That

said,” she explains, “there is a need for even

closer working, to ensure people receive the

right support they need as early as possible,

and that collectively we use the resources

available as cost-effectively as we can.”

Joanna says that MAT is continuing to

explore further opportunities for working

more closely together to ensure it delivers

services in an efficient and effective way:

“We are grateful to our funders and other

stakeholders for their help in ensuring we

collectively operate in a way that meets the

needs of the thousands of clients who need

our help,” she adds.

Alistair Chisholm of Payplan chimes a

similar message and conciliatory tone: “We

believe in consumer choice and working

together with partners to deliver services

effectively, ensuring that advice funding is

used efficiently and spent in a way that is

measurable. We believe in a collaborative

approach to providing debt advice as

this allows each provider to play to their

strengths.”

Christians Against Poverty, in its

submission to Peter Wyman’s [report], is on a

similar page, citing the nuanced differences

in the services that various organisations

provide: ‘CAP’s model is unique because it

is designed to accommodate and support

people with multi-complex needs. As a

result, it is an expensive model that can only

cater for small numbers. There is a need for a

variety of different channels to cater for all in

need of debt advice, but extending a service

due to its cost-effectiveness should not be the

sole dimension of the decision’.

Consolidation, of course, is only ever a

good thing if it results in an improved service

for the customer. There are doubtless many

examples of mergers within the commercial

space that promised much, but in the end

simply resulted in a small number of top

executives filling their boots without any

discernible improvement in the customer

experience. Indeed, by consolidating the debt

advice charities and associated organisations,

it could be a case of ‘be careful what you wish

for’ if the end result is a bloated, inflexible

organisation that loses sight of its real

purpose. Sometimes niche, focused charities

deliver better outcomes.

That said, it’s clear that the issue needs to

be addressed. At the moment, debt collection

agencies, for example, are obliged to

signpost a dozen or so debt advisors in their

correspondence with customers, but how

such a list is meant to make life easier for the

consumer is difficult to fathom. Channelling

those enquiries through a single entity could

be the answer.

In his own report, Peter Wyman says that

at the very least, debt advice organisations

need to redouble efforts to achieve efficiency

savings, and that the sector had to ‘move with

the times’. He also states that the quality of

advice given ‘is not uniformly high’ which

adds another layer of challenge.

It would take a brave executive to lead on

this debate, and an incredibly brave turkey

who voted for Christmas. It would mean

casting egos aside and the point scoring

that is sometimes evident in their PR and

marketing campaigns. But like any huge

elephant in the room, the issue cannot stay

hidden forever, especially in the context of

ongoing rumblings among creditors with

regards future funding.

Creditors, understandably, want to know

that the money they are contributing is being

properly spent, and going to support the

customers who need it, rather than feeding

an inefficient engine that may be in urgent

need of retuning.


INTERVIEW

ON THE

FRONT FOOT

Sean Feast FCICM speaks to

Derek Usher about debt purchase,

customer engagement, and the batting

style of Geoffrey Boycott.

LIKE many senior executives

in the credit industry, Derek

Usher never set out to work in

collections. His parents owned

a small general store in Erith,

Kent, and the family lived above

and behind the shop. His father also worked

nights as a lathe operator in a local factory, so

Derek has always understood the concept of

hard work: “If you work hard then good things

come from it and opportunities will come your

way,” he says.

It certainly seems to be true in Derek’s case.

From comparatively humble, working class

origins he is now the Managing Director for

Cabot Credit Management’s UK debt purchase

business, a role he has held since 2016.

Originally schooled at Southfields in

Gravesend (in 1997, Southfields was named as

one of the worst in the country and put under

special measures!), he found happier times

when his parents move to Felixstowe, and

he attended the local Comprehensive. Derek

proved a capable student: “I was in the top

sets,” he says, “but whereas for some it came

easily, I always had to work hard.”

NARROW CHOICE

Derek remembers little or nothing in the way

of significant careers advice, but does recall

narrowing his choice between being a quantity

surveyor or an accountant. “I was fixated on

who earned the most,” he laughs, “and in the

end decided that being close to the money was

probably the best route!”

It proved a wise decision. At Brighton

Polytechnic he opted for a one-year foundation

course followed by four years of articles, which

he spent with a small, local practice, Chater

Spain. “I had been interviewed by Touche

Ross,” he explains and got through to the

second interview. “Then they wanted me back

for a third as they said it was between me and

one other, and they couldn’t decide. I made

the decision for them and declined. I’d been

offered a job by Chater Spain, and wanted to

work for a company that wanted me.”

It proved yet another wise decision, and

Derek spent a thoroughly enjoyable four

years at the firm, quickly learning the ropes

and working closely with small businesses,

understanding their operations from the

ground up. It was a learning curve that has

proven invaluable ever since.

From Chater Spain he joined Brighton’s

biggest employer, American Express, initially

in a Finance role for Europe, the Middle East

and Africa (EMEA) and then into operations.

This included, in the latter stages, a focus on

the firm’s collections operations: “My role

was to automate processes that were then still

largely manual,” he says.

“American Express was a great business to

work for,” he continues, “and had a fantastic

culture and customer service ethic. Many of

the people I worked with there are still friends

today.”

AMERICAN FRIENDS

Among those friends and colleagues was Ken

Stannard, Derek’s boss today. “Ken said that

I needed to leave before I became part of the

furniture,” he smiles. As it was, Derek received

a call from another former colleague, James

Corcoran (now of New Day), to join him at

Bank One where he was Chief Executive: “I

was initially the Minister without Portfolio,” he

jokes.

That all changed, however, with the sale of

the business to the Halifax: “Coinciding with

my arrival were two profit warnings from the

business in the US, and after the sale our very

small business ended up running Halifax’

credit card business.”

His time at the Halifax was exciting to say

the least. They grew the business quickly and

profitably, at one point adding more than one

million customers in a year. Derek learned

a good many lessons, about what to do and

what not to do! In 2004, however, and although

having been offered a new role in Leeds as Head

of Collections for the Retail Bank, he decided

instead to resign so that he could go travelling

with his wife.


“If you work hard then

good things come from

it and opportunities will

come your way”

The Recognised Standard / www.cicm.com / December 2018 / PAGE 17 continues on page 18 >

INTERVIEW

AUTHOR – SEAN FEAST

“I knew that if I didn’t do it then, I

might never get around to it,” he explains.

“As it was, the company did not accept

my resignation, and I was able to take a

sabbatical, travelling across South America,

North America, Australia, New Zealand and

India, and spending several weeks skiing in

France. My fondest memory was in Central

Australia, sleeping out under the stars in

a swag bag. It is only then that you realise

how small you are!”

INTEGRATION ROLE

On his return, Derek once more threw

himself into his role, moving to Leeds and

spending four years with the business until

it was taken over by the Lloyds Banking

Group (LBG), by which time he was the

Chief Operating Officer for its Retail

operations, responsible for more than

14,000 staff at its peak. He was latterly the

Integration Director of LBG, and as such

has some sympathy for the IT traumas

recently experienced by TSB as it looked

to migrate systems: “We had every form of

contingency plan but in the end we were

able to stand the team down after a week

as the programme had been a success,” he

says.

The workload, however, was relentless:

“We were working every day, starting with a

conference call at 7-30 in the morning and

finishing with another at 6-00 at night, for

the better part of 18 months,” he continues.

“I was working for Mark Fisher, the COO

for LBG. Mark had led the RBS/NatWest

integration which was the benchmark

project of its time, so knew what it took to

be successful. He was super smart but very

demanding.”

Moving south once again, Derek was

tempted away from LBG with an offer

from Travelex to become the global CIO:

“We’d come to the end of the integration

programme and all of the jobs I might

have been interested in were filled, so the

opportunity came just at the right time.

Travelex was getting ready for a sale; it

operated in 26 countries that had been

somewhat under-invested in terms of

technology, and so there was a great deal of

work to do. In the time I was there, we were

able to significantly improve service levels

and make some general improvements to

systems and processes, but we never quite

achieved everything we wanted.”

Derek stayed on until after the

business was sold, and shortly afterwards

he agreed to join Ken Stannard at Cabot.

“Ken had spoken to me before to get me

to join him at Marlin, and now that the

business had merged with Cabot, Ken’s

role had expanded to include Europe and

he needed a dedicated managing director

for Cabot’s debt purchase operations.

While I had never bought debt before, I

had sold some.”

Using his accountant’s skill in getting

beneath the skin of a business, Derek

identified where further improvements

could be made, especially in the use of

analytics and improving the customer

journey. The business had just become

one of the first to achieve FCA approval,

and was looking to optimise its position in

the market.

“I felt we’d become something of a ‘tickbox’

company,” he tells me, honestly, “in

the way that we engaged with customers.

In one of the first calls that I listened into,

a woman was making her last payment,

and wanted to give us some feedback. She

said that while we had always been very

helpful and polite, she did not have the

same experience with every creditor. Even

then I thought that we could do more, and

so worked hard with the management

team to further improve our customer

engagement and better understand the

customer’s individual position.”

BOARDROOM MEETINGS

Since joining the business, Derek has

instigated a regular Friday morning

Boardroom catch up, involving every

department, listening to calls and

discussing how those calls were handled:

“If a customer cannot pay, they cannot

pay,” he adds. “Yes of course as a Debt

Purchaser, the amount we collect and

over what time period is important. What

is more important, however, is achieving

the right outcome for the customer,

because in doing that you can build a

sustainable business.”

SIZE ADVANTAGE

As the largest Debt Purchasing business

in the UK, Cabot has the advantage of

size. This has enabled it to invest in new

digital technologies such as ‘Eureka’.

Eureka analyses conversations in real

time, converts them into text and defines

‘rules’ that can prompt the consultant

into asking specific questions based on

what has been said. “Our consultants are

very well trained,” he says, “but Eureka

is an excellent tool in helping them help

their customer to the right outcome. They

really like it.”

Size and scale have also been important

in meeting the additional costs involved

in gaining FCA approval: “The FCA

has been a good thing for the industry

overall, because it has led to a focus on

the customer and demonstrating good

customer standards. Yes it has added an

additional layer of cost but arguably this

was needed.”

Derek says that being the best that you

can in whatever you do, is a good mantra

to live by: “You have to make the most of

any opportunities that come your way,”

he explains, “and throw yourself into

whatever you do. But by the same token,”

he adds, “keep life in perspective.”

A keen sportsman and a self-confessed

evangelical ‘green’, Derek still likes to

keep fit by cycling and has set himself a

number of personal challenges for the

year to run 1,000km, cycle 1,000km, and

perform 12,000 sit ups and 12,000 press

ups. He’s on target, but still has 311K left

to run at the time of writing. But Derek’s

particular passion is for cricket; he

coaches a local Under 11’s team and as a

batsman modelled himself on the great

Geoffrey Boycott: “I could bat all day and

still not score many runs,” he laughs.

You have to make the most of any

opportunities that come your way,

and throw yourself into whatever you

do. But by the same token, keep life in

perspective.


OPINION

BUDGET

SURPRISES

Time to dust off your old manuals?

AUTHOR – Frances Coulson

MANY of the initial reports

of the budget

streaming into your inbox

will have cheered

small businesses, focused

as they were on

income tax, digital commerce tax and business

rates cuts. However in the world of insolvency

and therefore in the wider credit

arena, two areas of the budget sent shockwaves

through the finance and insolvency

professions and will have a radical effect on

credit, business start-ups and rescue as well

as the very concept of limited liability.

First, the big announcement, in respect

of which there was no prior warning

or consultation (even, it seems within

HMRC or BEIS) the resurrection of Crown

preference in insolvency. The view is that

VAT, Employers’ NIC, PAYE and CIS are

all taxes collected on behalf of the Crown

and therefore should not form part of the

available funds for unsecured creditors in

an insolvency. For example, Company A

supplies Company B with widgets for £1,000

plus VAT. Company B pays Company A

£1,200 – £1,000 is for the widgets and £200

is for Company B’s VAT payment which

Company A should pay over to HMRC. So far

so logical. However, in a real-life situation

cash fluctuates and all the VAT, to take one

example, is not sitting in a deposit account

for HMRC but is used in the business of

Company A. So long as Company A pays

that VAT over to HMRC on the due date no

problem, but if Company A is insolvent and

the £200 is no longer there, the administrator

or liquidator of Company A will realise its

assets and, where appropriate, bring claims

against directors to replenish the company

pot for creditors. At present, aside limited

preferential creditors such as employees,

the company pot after payment of secured

creditors is paid to the unsecured creditors

– including HMRC – ‘pari passu’.

In administration the Enterprise Act

2002 which abolished Crown preference

also made provision for a ‘prescribed part’

carved out of floating charge realisations

(as floating charge holders were getting

a Crown windfall in the Crown no longer

being preferential) of up to £600,000 for

unsecured creditor then including the

Crown. From 2020 it seems the prescribed

part will change or go. In insolvent estates

HMRC will rarely have trust money in the

form of carefully preserved tax to recover

so will eat into unsecured creditor returns

generally.

At the time of the Enterprise Act

arguments were made that the abolition of

Crown preference was good for business

and for UK plc. They were right. The old

order meant that HMRC were far too quick

to liquidate and make a grab for their cash

when in fact business rescue was feasible.

This is a shortsighted move even if done in

the name of the good of the taxpayer. What

UK plc needs is a good flow of lending, a

good rescue culture, and an efficient pursuit

of those who trade at the expense of their

creditors and fail. Instead lending and trade

credit will tighten and the Crown might well

find that its take goes down not up. All this

at a time when businesses face the Brexit

challenge. While the changes announced

do not usurp the position of secured lenders

with fixed charges, many of the challenger

lenders who have proved so vital in SME

lending do not have fixed charges and might

look harder at their lending criteria.

BARRIER TO BUSINESS

As if this wasn’t bad enough the other

HMRC proposals, which were (briefly)

consulted upon-and apparently universally

condemned-in their ‘Tax Abuse in

Insolvency’ paper, have also been adopted

in the budget. These proposals allow

HMRC – as Judge Jury and Executioner – to

determine when a company is guilty of tax

evasion or avoidance, or phoenixism, and

look directly to directors for recovery. Again,

this must tighten lending. The Treasury has

previously been keen to resist any erosion of

limited liability as a barrier to business, but

it seems that this is all forgotten in a shortterm

land grab by HMRC.

Many now successful businesses

have arisen from early failure. Would

entrepreneurs try again so readily if their

family home is on the line? Would a lender

support them trying again or provide a

distressed business with finance under the

post 2020 regime? Less likely. Fewer and

fewer businesses are built on fixed asset

bases in the SME market. Floating charge

and unsecured lending has enabled such

business to thrive.

Time to tighten your credit policies?

These proposals allow

HMRC – as Judge Jury

and Executioner

– to determine

when a company is

guilty of tax evasion

or avoidance, or

phoenixism, and look

directly to directors

for recovery.

Frances Coulson

Head of Insolvency and

Litigation at Moon Beever

Solicitors.


ASK THE EXPERTS

Passport to Export

How can best-practice credit management support

international growth?

AUTHOR – Lauren Carter FCICM

WE live in uncertain

times, and the

invention of the

all-seeing crystal

ball is still on Elon

Musk’s ‘to do’ list

(perhaps). Political uncertainty is global:

Brexit, Trump’s trade tariffs and China’s

retaliation mean that politics is impacting

international trade in every region of the

world. Changes in global trade links on

this scale are likely to have an increasingly

disruptive effect in the coming years.

But uncertainty and disruption also

produce opportunity: as patterns of

international trade shift, new doors open.

Companies that are prepared to step into

new markets can maximise their chances

of capitalising on new opportunities and

position themselves for success. While

many companies are currently choosing

to delay decisions in the short-term, this

needs to be balanced against the risk of

missing a window of opportunity that

change on this scale can bring.

Companies thinking of trading in new

countries need to know how to expand

their operations into these areas, and the

credit function has a clear role to play

in managing the risk associated with

this. Here we look at factors that can

help credit managers deliver strategic

and operational advantage in unfamiliar

territories.

UNDERSTAND THE CONTEXT

Knowledge of political, social and

economic conditions is essential for good

credit management. A country’s sovereign

risk impacts trade at a national level, so it

is important to be aware of the operating

environment. A PESTLE analysis is a

useful tool to aid the understanding of

the factors at play, and staying abreast of

current affairs gives global context to the

trading relationships being set up.

Knowledge of local market conditions

is also important. Not all competitors

operate in all territories, so who are the

local competition? What trading terms

do they offer? How does their offering

compare and what advantages does your

company have? Credit management

always happens within the business

context and so it is essential for credit

managers to understand the strength of

their commercial position on a local basis.

REVIEW YOUR STRATEGY

Entering a new territory should trigger

a review of risk strategy, as it needs to

be adjusted to match the new trading

conditions. New countries may have very

different market conditions, requiring a

new approach to commercial risk. Even

if market conditions are similar, the

competitive forces at play in entering

a new market may require a riskier

commercial position, such as loss leaders

and penetration pricing. Take the time

to set your risk appetite and set out the

policies that naturally follow from that.

For example, if local competition means

you have to set your prices lower, then

a reduction in payment terms will help

support profit margins. Alternatively, if

the company needs to accept a greater

level of credit risk in order to support

growth, then ensure that the bad debt

provision is a true reflection of the

commercial position.

UPDATE YOUR POLICY

The credit policy formalises a company’s

approach to credit and sets out the

processes that will be used, so consider

how this needs to be adapted to include the

needs of trading in the new territory. Set

out what currencies you will accept, and

consider whether a local bank account is

needed. Consider what payment methods

will be accepted, as payment platforms

can have regional prevalence, such as

Alipay in China. Currencies and platforms

may bring a greater risk exposure, but

can be a source of competitive advantage

by making the trading relationship

easier for the customer, so link this into

a commercial strategy. Consider revising

KPIs to ensure they drive performance in

the appropriate way. If payment terms are

reduced, there should be a corresponding

reduction in DSO targets. Bad debt targets

need to be adjusted if the level of risk has

changed.

New territories can require the company

to adopt a different organisational

structure or distribution channel, and

so decisions need to be made to ensure

that roles and responsibilities are clear.

Will the credit team undertake customer

visits, and if so, who will they visit and how

frequently? The policy also needs to set

out who is responsible for accepting the

risk of exceptional transactions for the

territory, who has the authority to put customers

on stop, and who needs to attend

internal risk review meetings.

TAILOR YOUR CONTRACTS

Contracts need to be adapted when trading

in a new country. The requirements for

executing a contract differ around the

world, with some countries needing only

verbal acceptance and others needing a

signed or double signed agreement. Other

countries require a contract to be stamped

with a company stamp. This is important

because in the event of non-payment, a

debt cannot be legally enforced if it is not

supported by a valid contract.

In some countries, an email is sufficient

to form a valid contract, and in others

email is not considered legally binding.

Electronic signature of agreements is

widely but not universally accepted, so

check local precedents before this method

of contracting is deployed as standard

(docusign.com/how-it-works/legality/

global) is a good resource for this.

If you use personal guarantees,

make sure that you understand the

requirements for how this needs to be

drafted and implemented in order to be

legally enforceable in your new territory.

Jurisdictional clauses also need to

be tailored to international trading.

Prescribing that the company’s ‘home’

law governs a contract gives some degree

of certainty over legal risks, however can

restrict debt recovery options. Specifying

that legal action can be brought in a

customer’s jurisdiction can make recovery

quicker and cheaper, so a non-exclusive

clause can be beneficial. Ensure that

whatever is used supports the company

strategy and consider all of the risks.

BUILD YOUR KNOWLEDGE

Developing a knowledge of a few key facts

about a country can help an organisation

avoid common pitfalls. For example,

an understanding of the legal forms of

companies in each country will help in

assessing risk and determining what

assets can be levied in a non-payment

situation; and knowing the relevant

limitation period enables a collections

approach designed to avoid unnecessary

write-offs. In some countries, debt is time

barred after two years so overdue accounts

need to be escalated in a timely manner.


ASK THE EXPERTS

AUTHOR – Lauren Carter FCICM

While many companies are currently choosing to

delay decisions in the short-term, this needs to be

balanced against the risk of missing a window of

opportunity that change on this scale can bring.

Companies selling services need to

be aware that cancellation fees are not

enforceable in some jurisdictions where

there is no provision for a charge where

no service has been rendered. Companies

selling goods need to be aware of local

retention of title (RoT) regulations. Most

countries do acknowledge RoT clauses,

but there are variations in the ease of

implementation and the requirements on

the creditor to notify, so be aware of how

this works.

Finally, a basic understanding of the

local insolvency framework is likely to be

needed, particularly for companies who

tolerate a higher degree of credit risk. An

understanding of the types of insolvency

processes available, and the requirements

and deadlines associated with these

processes will help to maximise the

return to the creditor.

Lauren Carter

DEVELOP RELATIONSHIPS

Building relationships is a key part of

good credit management and is essential

when entering a new territory. Strong

customer relationships are as important

as ever, but additionally, relationships

with local partners such as distributors

and shippers can be valuable as a

source of information. Discussions with

collections partners at an early stage

give an opportunity to develop SLAs

tailored to suit the local processes in the

new territory, and to learn from their

in-country experiences.

Contacts can also help to develop

an understanding of local culture

and conditions. It is likely that sales

colleagues will have already travelled to

the new country and can provide valuable

information to the credit team. Informal

discussions with people in your network

can also be a good source of advice and

information on local culture and trading

conditions.

These uncertain times can produce

exciting and profitable opportunities to

those who are prepared to venture into

new markets. I hope these ideas will be

useful to credit managers in supporting

businesses in their strategic goals through

these times of change.

Lauren Carter FCICM is Managing

Director of Vantage Credit


CICMQ

Teamwork at the heart

Equinix

EQUINIX connects the world’s

leading businesses to their

customers, employees and

partners inside the world's most

connected data centres.

More than 7,000 employees work in some

44 markets across five continents, and

have achieved 62 consecutive quarters of

revenue growth. In August 2018 quarterly

revenues had increased 18 percent year-onyear

to $1.262 billion.

“By involving the team to fully participate

and project manage the accreditation

journey, our people are more engaged

and learn new skills along the way,” says

Nick Williams MCICM, Senior Manager

(EMEA), Credit and Collections Equinix.

“The team members were able to give

“AS part of the development of the

apprentices in our credit academy,

we decided that they should take

responsibility for organising the reaccreditation,”

says Phil Rice FCICM, Head

of Credit, Aggregate Industries. “This was

a challenge because they had never done

anything like this before, but we felt it was

good experience and essential as part of

their development. They also went on to

present their experience at a CICMQ best

practice event.”

The company has a full-time

complement of 34 in the credit services

team that handle inbound payments,

their input based around their practical

experience of our operations and that

makes the processes more robust and fit for

purpose.

“I experienced how proud each individual

feels to be part of the process leading up

to the accreditation, and the jubilation it

brings when you are successful. It was my

target to gain the accreditation within two

years of joining Equinix and I am pleased to

say we did it within 16 months.”

Pam Thomas FCICM, CICMQ Assessor,

said in her report: “Good controls

and policies together with strong

communication continue to be a key

activity in the department. This ensures

that disputes and queries are kept to a

minimum and overdue debt is reduced.”

Apprentices lead the charge

Aggregate Industries

allocation, credit risk, cash collection and

legal. A number are undertaking Level 3

and Level 5 CICM qualifications, and each

has to complete 18 hours CPD each year and

attend an industry conference or workshop.

They also actively participate in CICMQ

workshops and exchange staff with other

CICMQ accredited companies so they can

gain experience and share best practice.

“There have been a significant number

of major developments in the team

since Aggregate Industries completed

its first QICM/CICMQ Accreditation in

2010,” says Chris Sanders FCICM, Head of

Accreditation – CICMQ.

The Right Energy

GAZPROM Energy, the award-winning

supplier backed by one of the world’s

largest energy companies, has achieved

CICMQ accreditation following an

impressive assessment performance

in which it delivered an extremely

detailed and high-level evidence file,

accompanied by support from key

stakeholders within the business.

Sharon Noland MCICM, Credit Risk

Manager at Gazprom Energy, says that

education and future training is crucial

to the organisation: “The company

culture places a lot of emphasis on

people, development and recognition,

which has been very successful and

something we will look to continue.”

Gazprom Energy has 350 employees

operating across three countries,

supplying over 30,000 industrial and

commercial customers across the UK.

Their parent company, Gazprom, are

responsible for 13 percent of global gas

production.

Injection of Quality

PIONEERS in the development of blood

glucose monitoring systems, Roche

Diabetes Care, excelled in a number

of areas during CICMQ accreditation,

including outstanding training and

development plans for staff.

Roche Diabetes Care, part of the

Roche group, was created in 2014 for

the import, market and distribution of

diabetes care equipment, associated

consumables and value adding services

to the UK and Irish healthcare markets.

It employs over 150 people across the

UK and Ireland, and last year reported a

turnover circa £79 million.

Christelle Madie, FCICM(Grad), MSc

Credit Solutions Manager at Roche

Diabetes Care says: “Our aim is to keep

the bar high and continually improve;

the opportunity to access a wider bank

of knowledge through the Best Practice

network is a key advantage of CICMQ.

There is also a keen and growing

interest within the team to embark

on CICM training courses and attend

professional forums.”


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THE ONLY AML RESOURCE YOU NEED

OPINION

Victory for law and

common sense

Payments due in construction contracts can be

very complicated and a cause of disputes – not easy

for credit managers.

AUTHOR – Peter Walker

IF you should see me in London’s

Leicester Square, I am usually

going to the neighbouring

Chinatown for a meal of Chinese

dim sum, but a winding-up petition

relating to the development and

conversion of Victory House in the Square

instead was recently the concern of a High

Court judge. A creditor, the contractor,

had petitioned for the winding-up of the

employer because of non-payment of over

£800,000 awarded by an adjudicator of an

arbitration.

An unusual element of the case was

that the debt was not disputed, but it was

part of a complicated transaction. The

complication was a counter-claim for more

than the outstanding amount.

The dispute itself arose from a

contractor’s application for an interim

payment under a building contract to

develop and convert Victory House into

a hotel. The contract was governed by

the JCT Design and Build Contract 2011,

and the agreement referred to interim

payments and pay-less notices should

there be disputes about the instalments.

There is also legislation such as the Scheme

for Construction Contracts (England and

Wales) Regulations 1998 (SI 1998/649).

These agreements are very complicated:

credit management is very difficult.

The debtor, or employer of the

contractor, therefore challenged the

petition for winding up, and it had made

what is called a Part 8 Application under

the Civil Procedure Rules. A claimant may

use this procedure, where it firstly ‘seeks

the court’s decision on a question which

is unlikely to involve a substantial dispute

of fact’. There may alternatively be a

specified type of proceedings, although this

seemingly did not apply to this situation.

The situation was a building contract

providing for stage payments. The

contractor was to obtain a transformer

or substation from the relevant statutory

authority. Once this had been installed,

work could begin to commission the hotel’s

electrical and mechanical services.

DISPUTED DELAYS

An arbitration and High Court judges

indicate that there were problems. These

included delays and a disagreement

about the entitlement of the contractor

to an interim or stage payment. In

March 2017 the parties to the agreement

tried to resolve the dispute by means

of a Memorandum of Understanding

acknowledging the delays. This included

the information that the contract price

was around £6.6m, but the employer had

paid just over £8 million. The contractor

wanted more funds to complete the job.

The Memorandum allowed for three stage

payments of £200,000 each.

The first two payments were made,

and in June 2017 there was an operating

transformer. The contractor then applied

for a payment under the main contract.

The amount was just over £682,000

plus VAT. The employer objected, and

it asserted that payments were now

governed by the Memorandum.

Time for arbitration! There were

plenty of issues including the allegation

that the third payment required by the

Memorandum had not been made. The

Adjudicator decided that it was legally

binding, but importantly that it did not

supersede the building contract. The

Memorandum suspended the obligation

to make interim payments under that

contract until the transformer had been

installed. The employer should therefore

pay the amount demanded plus of course

interest until the date of payment.

NATURAL JUSTICE

The employer then decided to appeal to

the Technology and Construction Court

in the High Court, where in November

2017 Joanna Smith QC sitting as a deputy

judge reviewed the facts in Victory House

General Partner Ltd v RGB P&C Ltd

[2018] EWHC 102 (TCC). The employer

asserted that there had been a breach of

natural justice, and it suggested that the

adjudicator had gone ‘on a frolic of his

own’.

Joanna Smith QC responded by

referring to the judgment in Cantillon

Ltd v Urvasco Ltd [2008 EWHC 282

(TCC), which stated the obvious, that an

adjudicator must be shown to have failed

to apply the rules of natural justice. The

breaches must be material such as where

the adjudicator has failed to bring to the

attention of the parties an important

issue. An adjudicator’s frolic would apply,

for example, if he or she decided on a

factual or legal issue not argued by either

side.

Edwards-Stuart J in Roe Brickwork Ltd

v Wates Construction Ltd [2013] EWHC

3417 (TCC) refined this ruling. It would

be acceptable for an adjudicator to decide

on the information before him or her,

although neither party had contended it.

They must, however, have been aware of

the material.


OPINION

AUTHOR – Peter Walker

On the facts in front of her Joanna

Smith QC, in her judgment in January

2018, rejected the contention that the

arbitrator had failed to apply the rules

of natural justice. The parties had, for

example, made submissions regarding

the Memorandum of Understanding.

There were other considerations, and

the adjudicator had furthermore posed

specific questions to the parties, who

had the opportunity to answer. Part 8

Procedure was not appropriate in a claim

including disputed facts.

WINDING UP OR WIND-UP

The adjudication debt, however, as

ordered by Joanna Smith QC was unpaid

in February 2018, so the contractor

petitioned to wind up the employer.

The employer applied in the Chancery

Division of the High Court, to strike out

the petition. Morgan J in the resulting

case In re Victory House General Partner

Ltd [2018] 3 WLR 1024 noted that there was

other litigation, not about the judgment

debt, but about a liability to make a

further payment under the contract.

The contractor, for example, had made

an application for a further payment of

around £3 million, and the absence of any

payment resulted in another adjudication.

The adjudicator significantly decided that

the value of the work done was around £7

million, but that the contractor had been

paid around £8.5 million, i.e. there had

been an overpayment.

This did not end the dispute, because

the employer, not the contractor, initiated

a third arbitration. It claimed that there

were defects in the work.

Morgan J considered this background

to the contractor’s winding-up petition.

He noted that, if the employer paid

the judgment debt resulting from the

first arbitration, it would have a crossclaim

against the contractor due to the

overpayment found by the adjudicator in

the second arbitration.

He turned for guidance to the decision

of Coulson J in Grove Developments Ltd

v S&T (UK) Ltd [2018] EWHC 123 (TCC).

This case concerned the construction

of a new hotel at Heathrow Terminal 4.

There was a completion date of October

2016, but the project was not ready until

March 2017. There were three subsequent

adjudications. The first decided that a

Schedule of Amendments was part of the

contract. The second decided that the

contractor was entitled to an extension

of time, but only until January 2017. The

third arose from the employer’s pay-less

notice in response to the contractor’s

application for a stage payment. This is

important to credit management, because

if an employer does not serve such a notice

on time, it is deemed to have accepted

the valuation. This is known as a smashand-grab

claim, whereby a contractor

claims payment of the sums in their

interim application without regard to the

employer’s assessment as to its validity.

The third arbitration concluded that it was

not entitled to do so with the result that

the contractor was entitled to £14 million.

The employer finally started a Part

8 Application, but Coulson J ruled that

the pay-less notice was effective. It was

accompanied by a spreadsheet detailing

the sum to be paid. Coulson J added

that upon payment the employer could

apply for an adjudication of the true sum

due. It could then make a claim for any

consequent financial adjustment.

NO SHORT CUTS

There are consequently no short cuts when

the other party has what Nourse LJ in the

Court of Appeal described as ‘a genuine

and serious cross-claim’. He did not have

to deal with a Part 8 Application, but he

was considering an undisputed debt case

In re Bayoil SA [1999] 1 WLR 1471. Bayoil

had chartered a tanker, but there were

problems with the tanker’s engines and

with the voyage generally. There were

disputes resulting in an arbitration, and

the ship’s owner was awarded over $1

million. When there was a subsequent

petition to wind up Bayoil, it did not

dispute the debt, but its counterclaim

exceeded the awarded amount.

Nourse LJ proceeded cautiously, and he

pointed out the potentially serious effects

of a winding-up order. It was ‘draconian’,

and if it was wrongly made, a company

would have little chance of revival.

Morgan J in the Victory House case

followed this reasoning. The amount

awarded by the adjudicator was not

disputed, but the employer had a

substantial bona fide cross-claim based

on the alleged overpayment. The judge

therefore dismissed the winding-up

petition.

A victory for law and common sense!

A Part 8 Application or winding-up

petition can be the correct procedure

after the award of an undisputed and

unpaid judgment debt, but there are no

procedural short cuts if the debtor has a

justifiable cross-claim. Where there are

complicated building and other contracts

involving stage payments, credit managers

must monitor them carefully.

Peter Walker is a freelance business

writer.


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Targets; Debt Recovery; Insolvency; Management Skills.

TRADE TALK

A true collaboration

Working with UK Export Finance to implement the

Government’s Export Strategy.

AUTHOR – Lesley Batchelor OBE FCICM

Lesley Batchelor

OVER the summer the

Government announced

its intention to increase

exports as a proportion

of GDP from 30 percent

to 35 percent. Export

volume has started to increase in the last

couple of years and though much more

work needs to be done to increase national

trade confidence among the UK’s SMEs in

particular, a start has been made towards

making the UK a greater exporting nation.

One of the real success stories of

recent years has been the Government’s

broadening of the support provided

by its export credit agency UK Export

Finance (UKEF). In the past UKEF has

been criticised for serving mostly larger

corporates, however, over the last five years

this has changed. Indeed, in the last five

years it’s provided £14 billion of support to

UK exports in partnership with banks and

brokers.

Its mission is ‘to ensure that no viable

UK export fails for lack of finance or

insurance, while operating at no net cost

Its mission is ‘to ensure

that no viable UK export

fails for lack of finance or

insurance, while operating

at no net cost to the

taxpayer’.

to the taxpayer’, and recently it’s been

moving much more efficiently towards

this end-goal.

At the Institute of Export &

International Trade (IOE&IT) we are

proud of the part we’ve played in this

burgeoning national success story. We

have partnered with UKEF on an ‘Award

in Trade Finance’ qualification, which all

UKEF, Foreign & Commonwealth Office

(FCO) and Department for International

Trade (DIT) staff take to ensure thorough

product knowledge. This creates an

understanding of how these financial

products fit within a commercial setting

in all sizes of business.

Once this is completed, staff can move

on to a Level 5 Diploma in International

Trade which ensures they understand the

fuller context of international trade when

advising companies on key international

business tasks such as international

physical distribution, international

marketing strategy, and of course the

financing of international trade. We do so

in such a way that ties in effectively with

UKEF’s core offerings and services.

For instance, in the part of the course

in which we train UKEF advisers in how

to ensure the security of international

payments, as well as covering key areas

like currency risk, open account trading

and documentary letters of credit, we also

explain how UKEF’s Export Insurance

Policy can be applied. When training

UKEF advisers in how international

working capital cycles work and the role

of bonds and guarantees in supporting

export trade, we also address how UKEF’s

Export Working Capital Scheme is used

to support UK exporters. And we also

evaluate how UKEF’s medium and longterm

export finance support services are

applied, including Buyer Credit, Supplier

Credit, and Direct Lending.

NETWORK TO THRIVE

Not only do we train UKEF’s advisers, but

all of the UKEF managers are members of

the Institute, meaning they receive daily

bulletins about the key developments

in trade, have access to our Technical

Helpline, and can constantly stay on

top of things through our CPD scheme;

our support network and the access to

knowledge and skills we provide have

proved invaluable.

Elizabeth McCrory, an Export Finance

Manager at UKEF who works in Northern

Ireland, recently told me: “As a local point

of contact for exporters I am helping

them to get a better understanding

of their export finance requirements

and, where possible, I’ll identify an

appropriate solution to support their

export transactions. The Diploma in

International Trade has given me a

broader understanding of International

Trade. Being a graduate member of the

IOE&IT gives me added accreditation

and I’m delighted to use the letters MIEx

(Grad) after my name.”

JUST THE START

At our recent World Trade Summit event

in London, we were delighted to be

joined by Louis Taylor, Chief Executive

of UKEF, and Baroness Fairhead CBE, the

Minister of State for Trade and Export

Promotion. Both of these key decisionmakers

made the point that this can only

be the beginning for UKEF, and as the

Department for International Trade looks

to go about producing its second Export

Strategy in as many years, the role of UKEF

looks certain to become even greater.

Our work with UKEF is a great

testament to the importance that

education and training has in any export

strategy as our trade advisers can only do

the job of supporting UK businesses into

international trade if they know how it’s

done themselves. We are always keen to

forge relationships, like the one we have

with UKEF, because it is only through

driving the export skills agenda that any

strategy becomes achievable.

Lesley Batchelor OBE FCICM is Director

General of The Institute of Export and

International Trade.


INTERNATIONAL

TRADE

Monthly round-up of the latest stories

in global trade by Andrea Kirkby.

AFTER months of slightly

nervous trading, the stock

market finally gave way to its

jitters at the start of October.

The S&P 500 lost six percent

in a few days, giving up all but two percent

of its gains for the year, with more than one

commentator suggesting that the tenth

anniversary of the 2008 credit crunch could

see an even bigger crisis.

Certainly, the oil price increase together

with increasing interest rates look similar

to the backdrop to the credit crunch. So,

Stock market sell-off

does the increase in real estate prices since

the trough. But it's trade tensions that were

at the forefront of investors' minds as a

reason for the shock mini-crash; a new cold

war with China would have very serious

repercussions for world economies.

How serious? Don’t get too alarmed. I

saw a report that suggested Euler Hermes

had said global trade would fall 50 percent

by 2020. In fact, Euler Hermes says global

trade growth could fall 50 percent from four

percent to two percent; that's not quite the

same. There are also some technical reasons

for the stock market slump. Rising interest

rates have pushed up yields on bonds.

That's resulted in many investors dumping

their equity holdings to invest in bonds

which deliver the same return for less risk.

Meanwhile, a fund manager at BlackRock

says hedge funds are unwinding 'crowded'

positions – which while it's a reminder of

the risks inherent in the financial system,

isn't really a forecast for the world economy.

What to do? I think I saw the best advice

on a tea towel a few days ago. ‘Keep calm

and carry on.’

Dollar reverse…and changing trade patterns

THE dollar had been strengthening for

a good long while, but that's all over

now. The dollar has suddenly taken on

board the negative prospects for world trade

of a Trump-Xi standoff, resulting in a weeklong

slump against other currencies that

even a Fed rate hike couldn’t stop. While it's

a bit early to bet against the US, I wouldn't

mind betting Donald Trump’s trade war will

result in more damage to his own country

than to China.

It's interesting to see other countries

taking advantage of the situation to improve

their own trade with China. Brazil is

exporting more and more soybeans, and the

'stans' as well as Qatar and Kuwait, who are

focusing more attention on China trade.

It’s not a tectonic shift yet, but if the

standoff continues, it could bring China

more and more into the mainstream of

global trade and make it ever more present

in global supply chains. And those are

the kind of changes that aren't easy to

reverse.

>WATCH OUT FOR INFLATION

THE munificent Jeff Bezos has given Amazon

employees a generous pay rise. An act of pure

generosity? If you’re a cynic, you’d note that

the US labour market is getting very tight; add

two and two together, and you see Amazon

firing a shot across other employers’ bows to

make sure it gets the pick of the crop.

Tight labour markets and rising oil prices,

together with higher interest costs, haven't yet

put the squeeze on consumers or corporates

– but they’re likely to do so over the medium

term. The last couple of months’ inflation

figures from most major economies show

a slight fall in inflation, but don’t be fooled;

inflation is becoming even more of a risk. That

will push central banks to guard against it

by increasing interest rates – and that could

affect currencies, too.


Fallen angels in the making

FIRMS need to watch out for rising interest

rates and inflation. Hikes in interest rates

haven't hurt consumers or corporates yet,

but they will, eventually, put increasing

numbers of companies under pressure.

The damage won't be evenly distributed.

Bond Vigilantes blog identifies some

interesting wrinkles in the ways some

highly indebted companies might be

affected; for instance, some companies

have issued non-investment-grade

bonds with covenants that won't let

them pay dividends unless they have

below a specified leverage ratio, or above

a certain level of interest cover. Quite a

few shareholders run the risk of a major

disappointment in their high-yield

portfolios. Now, you may think that this

is only of interest to finance enthusiasts,

a sector of the population I'll reluctantly

admit I belong to. But actually, there is a

lesson for all credit control departments,

which is not just to rely on the headline

financial information when you're

assessing customers' ability to pay. Do your

research, attach the notes to the accounts,

and make sure you know exactly where you

rank for your pay-out if the worst happens.

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GBP/JPY

149.280 143.195 Down

East Africa – booming but risky

EAST African countries are seeing great

GDP growth at the moment; Ethiopia's

growing by eight percent, Kenya by six

percent, and all the East African countries

scoring above the average for sub-Saharan

Africa. Infrastructure development has

been fast and is improving the prospects

for business – once you get reliable 24-hour

electricity, it transforms manufacturing

business's ability to compete – and the

lives of citizens.

But that infrastructure comes at a high

cost; public deficits have been going up all

over the region, and according to Credendo,

what makes matters worse is that these

deficits have been funded by external

RUSSIAN RESILIENCE

IF you were asked for a great export prospect, Russia might not be your first thought –

but it’s not looking that bad. True, expected growth is rather modest at 1.5 percent, and

there’s a high level of business insolvencies, but the country is managing to do reasonably

well despite sanctions. Exports have been diversified, and the manufacturing sector has

strengthened. Russia has also kept an even keel with relatively prudent management of

government finances. Improving oil prices should help this commodity rich country, too.

So far, so good.

debt (though Ethiopia and Tanzania have

managed to attract significant foreign

investment, which reduces their exposure).

Many of the components have to be

imported – there is no local semiconductor

or telecoms manufacturing industry, for

example. And while eventually the export

sector should grow, right now most of

these countries are limited to commodity,

primary exports.

So, there's great potential in these

markets, but also big risks, particularly

in the government sector. Moody's

downgraded Kenya's credit rating earlier

this year, and has Tanzania on a negative

outlook, so mind how you go.

FROM THE FENS

TO THE PAMPAS

ELGOODS brew some great beers in the middle

of the Fens, which most people will tell you

is pretty much the middle of nowhere. Until

2015, they didn't export. Now, they export

to ten countries, have been on four trade

missions, and are just starting to export to

Argentina, which they expect will double their

international sales. Their next target? Japan.

That's a great success story. But it's

interesting that their biggest problem has

been finding reliable buyers. Not marketing,

not changing the product, or labelling, but

just finding the right partners abroad. Never

forget, when you’re running the slide rule over

customer credit, you're dealing with the future

of your business.

DO YOU NEED

A TONIC?

UK gin manufacturers sold £1.6 billion

worth of gin in the year to June 2018, and

£532 million of that was exported. British

gin is on a roll right now with a surge of

popularity helping everyone from the biggest

manufacturers to tiny artisan start-ups.

One big lesson from this? Clustering. Once

an industry starts making a name for itself

in export, it’s that much easier for the next

exporter to get into the market. We’ve done it

in gin – can we do it in other sectors too?

Global geography reappraised

SOMETIMES we trust statistics too much,

particularly when it comes to average. For

instance, do you know anyone who actually

earns the average UK salary?

That's why I liked Euler Hermes' latest

analysis of global corporate debt. Average

net gearing across the world is 53 percent –

but that's about as useful as knowing global

average rainfall or average temperatures. If

you're in South Africa, you will get higher

temperatures – but also the world's least

indebted corporates, with only 38 percent

gearing. (Poland and Australia come close

with 43 percent and 41 percent respectively.)

Alternatively, if you're looking for trouble

to steer clear of, Southern Europe looks like

a hotspot of debt. Portugal has an impressive

96 percent average leverage, with Greece at

68 percent and Spain at 69 percent. Turkey,

at 72 percent, doesn't look as exposed as

Portugal until you think about its high

budget deficit and the rising oil price.

The same goes for sectors – some are

horribly indebted, others not. Paper, transport

and textile sectors are the chief trouble

spots, but there is some good news in store

– energy and metals companies are actually

improving, though still with fairly high debt

levels. Of course, these are still only averages.

Even if you're exporting within a highly

indebted sector and to a highly indebted

country, you can at least choose the most

credit-worthy customers and beat the odds.


COUNTRY FOCUS

The mechanics and

legalities of doing

business in Ireland.

AUTHOR – Adam Bernstein

Ireland: Part two

BUSINESS

MATTERS


COUNTRY FOCUS

AUTHOR – Adam Bernstein

WITH a framework

not too dissimilar

from that of the UK,

little of the process

should be much

of a surprise to

exporters. Ireland allows businesses to

operate through companies (there are ten

variants from private limited companies,

public limited companies and Societas

Europaea). These of course come with the

usual regulatory duties to report and file

on a public register. The duties placed on

directors are similar to those placed on UK

directors under Companies legislation.

Partnerships are also available to those

wanting to carry on business between

two or more people (without the need for

any formal registration). As in the UK,

partners have unlimited personal liability

for business debts. Again, as in the UK,

a hybrid model exists of limited liability

partnerships where partners are only liable

to the limit of their investment.

PROTECTING PROPERTY

Businesses that depend upon IP rights

benefit from practical protection under

Irish law. Some consider that the Irish

Trade Marks Act 1996 and the Copyright

and Related Rights Act 2000 to be state

of the art legislation which offer better

protection than that afforded by other

European states.

Irish law meets the requirements of the

Berne Convention, the TRIPS Agreement

and the 1996 Geneva Copyright treaties,

as well as all relevant IP EU directives.

Considering that Ireland is one of the

world’s largest exporters of software it’s

not surprising that appropriate protections

have been enshrined in Irish law to protect

these IP rights. The regime is overseen by

the Irish Patents Office at patentsoffice.ie/.

EMPLOYMENT LAWS

As in the rest of the EU, employment law

applies to those working in Ireland, no

matter what their nationality.

Employment law is governed by a

multitude of laws – the Constitution of

Ireland 1937; Irish statutes and EU law;

judicial precedents; common law (including

contract law); statutory regulations that

cover health and safety, redundancy

payments, transfers of undertakings,

collective bargaining agreements; as well

as custom and practice in the workplace

and workplace or industry rules.

The primary legislation regulating

employment includes the Unfair Dismissals

Acts 1977 to 2015; Employment Equality

Acts 1998 to 2015; National Minimum Wage

Act 2000 and the Payment of Wages Act

1991; Terms of Employment (Information)

Acts 1994 to 2012; Maternity Protection

Acts 1994 to 2004 and other protective leave

legislation; Minimum Notice and Terms

of Employment Acts 1973 to 2005; Fixed

Term Workers, Part Time Employees and

Agency Workers Protection Legislation;

Organisation of Working Time Act 1997.

Quite a list, but it should outline where

those with queries should look.

TAX MATTERS

Corporation tax – companies that are

resident in Ireland must pay corporation

tax on worldwide profits and chargeable

capital gains (subject to double taxation

treaty relief). The standard rate on Irish

trading profits is 12.5 percent. To benefit

from this rate, companies must derive

income from a trade that is actively

carried on in Ireland.

A rate of 25 percent applies to nontrading

(for example, rental income

and royalty income) and foreign-source

income.

VAT is charged on certain imports

and on goods and services supplied in

Ireland in the course of business. VAT

ranges from zero to 23 percent depending

on the product or service. There is more

detailed information on this at revenue.ie/

en/Home.aspx together with all the other

taxation information an exporter will be

interested in.

As an aside, it’s worth stating that while

taxes are never much fun other than for

accountants and the tax collector, the

Irish Revenue’s website is well designed

and very easy to navigate.

Employment – individuals who are a

tax resident (183 days or more in a year,

or 280 days or more over a year and the

previous tax year taken together) will pay

income tax on their worldwide annual

taxable income at 20 percent on the first

€34,550 to €43,500 (depending marital

status / children) and 40 percent on the

remainder.

As in the UK, there are individual tax

credits, which vary depending on the

employee’s circumstances, and can be set

off against their income tax liability.

The Universal Social Charge (USC)

replaced the health and income levies in

2011, at rates varying from 0.5 percent (up

to €12,012) to eight percent (income up to

€100,000) with a three percent surcharge

for income over €100,000, depending on

income and age. USC is treated as a tax

rather than a social security contribution

for tax purposes.

Most employers and employees (over

16 years of age and under 66) pay social

insurance (PRSI) contributions into the

national Social Insurance Fund. This is

set at four percent for employees.

VISAS AND PERMITS

Lastly, those from non-exempt countries

must obtain an entry visa before travelling

to Ireland; details of exempt and nonexempt

countries can be obtained from

the Department of Foreign Affairs and

Trade (dfa.ie).

Employment permits are required

by all non-EEA/Swiss nationals. The

Employment Permits Acts 2003 to 2014

establish a statutory regime governing

employment permits which is operated by

the Department of Business, Enterprise

and Innovation (dbei.ie). There are three

primary types of permit: Critical Skills

Employment Permits; General Work

Permits and Intra Company Transfer

Permits.

Ireland is a land of opportunity and

an easy gateway into Europe. For a post-

Brexit United Kingdom, Ireland is a

natural place to consider doing business.

Adam Bernstein is a freelance

business writer.


DRIVE DRIVE DRIVE!

What drives debt in your organisation and

whose responsibility is it?

AUTHOR – Chris Sanders FCICM

IT is true that the sales ledger is

the window into an organisation’s

processes. To be more accurate,

it is the window into how good

(or bad!) those processes are.

Any credit management

professional will tell you that 90 percent

of the issues as they appear on the sales

ledger are not of their making, but as

the credit controllers are responsible for

collections, so the expectation is that they

are responsible for resolving the issues.

But while Days Sales Outstanding (DSO) is

seen as a finance measure against which

the success of the credit management

process is measured, credit managers

are rarely measured on their ability to

‘trouble shoot’ and resolve issues that

ultimately impact the debts collected.

Establishing the root causes of debt

should be a fundamental part of the credit

manager’s role, but many seem to just try

to collect the debt as it is presented to

them. Best practice credit management

is more than that; it is about driving the

organisation in the reduction of debt. This

is where Stakeholder Management is a

key requirement of a credit professional

and the reasons why it is one of the six

CICMQ Criteria.

Credit managers rarely have direct

responsibility for the Order to Cash

process so working with stakeholders

becomes important. Identifying who these

stakeholders are is just the beginning.

Stakeholder maps – who these individuals

are, and their level of influence, is the

place to start; stakeholder management

is a constant requirement. The role of the

credit manager here is to find the button

that, when pressed, will change the

behaviour of the business encouraging

them to take action in improving debt.

Looking at the end-to-end Order to Cash

process, there are a number of areas

which drive debt:

Payment Terms – those which are

standard and those which are offered

to customers by sales teams may not

always be the same, but do you as credit

manager have control over this? If not,

how can you get control? Days sales

outstanding is formed of two component

parts Delinquent Days Sales Outstanding


OPINION

AUTHOR – Chris Sanders FCICM

(DDSO) and Terms DSO. It is the Terms DSO

which your sales can influence.

I recall a client once said to me ‘Sales are

only ever allowed to give payment terms

that are listed in the SAP system.’ When

asked ‘how many payment terms do you

have on the system?’ the answer was an

incredible 238, so this credit team failed to

demonstrate any control over the process

of payment terms and so, unsurprisingly,

DSO was exceptionally high. If you can

understand Terms DSO, working with Sales

to reduce the number of terms offered

would be a start. Putting in place escalation

processes for the approval of non-standard

terms will also help.

New Customer Information – there is a

standard credit mantra that ‘Sales don’t do

admin.’ That may or may not be the case,

but what is essential is that they are good at

the necessary admin. It is the responsibility

of the credit manager to educate the

business on the critical elements of their

role that impact debt and cash. During one

CICMQ client assessment I attended a sales

briefing where the credit manager and one

of her team took the sales team through the

credit application form – one of a series of

presentations they had done. Again, this is

not something that is ‘fire and forget’. This

was something that the credit manager

recognised would have to be an ongoing

process at all sales meetings – educating new

and existing sales people in the importance

of clear and correct customer information.

Billing Accuracy – this is a personal

soapbox of mine and as I have said before

‘the bill is another window into your

processes’. One of the most common

problems with billing is the poor processes

leading up to bill production – pricing

is a frequent root cause. Delays in the

loading of prices and slow rebates for bulk

discounts drive debts. There is a hidden

cost in organisations: billing re-work; the

investigation of disputes; raising of credits;

credit and re-billing etc. If you think about

it, the cost of re-work is more than the cost

of the bill. This is a hidden cost because the

resolution of disputes is spread throughout

the organisation – from receiving the call

to the investigation, raising of the credit,

senior management sign-off and the costs

of credit added to the terms for these delays.

The required ‘segregation of duties’

almost demands that these costs are

distributed so they are difficult to measure.

Start with the measurement of credit notes

to bills as a percentage, and if you struggle

to get traction with finance to create a

‘Billing Assurance’ programme use this

tactic. I once asked a FD of a client what the

billing accuracy was. He said ‘pretty good

actually around 95 percent.’ I said ‘So you

are happy with five percent of your revenue

being billed incorrectly?’ As this was a

major international company, five percent

amounted to a few billion dollars. This was

the button I mentioned earlier that changed

behaviour – two years later that 95 percent

was 99 percent and debt performance

improved dramatically.

Measurement – some years ago I

attended a CICM Masterclass in London

where I first heard the concept of ‘DSO

Drivers’. Essentially, by understanding what

a DSO day is worth you can then attribute

these days to the values of the debts on

your ledger. Presenting this at the senior

managers meeting will enable you to

demonstrate that DSO is not just a finance

measure but one which should be owned by

all of the business. You will also be able to

establish how much is outside the control of

the credit management team.

Organisational Capability – what you

are looking for as a credit manager is an

engaged and motivated team, but a team

that is neither of these things will result in

poor collections performance. There is a

soundbite meme that says ‘think of the cost

if the people we train leave?’ and someone

else says ‘but what is the cost of not training

them and they stay?’ It is very difficult to

quantify a benefit for training in value terms;

it is one of those things that is an enabler.

As one credit manager said at a CICM Best

Practice Event ‘training your staff is like

servicing your car. You are making sure that

it is operating at optimum performance.’

The CICMQ network of organisations invest

in training and as a result it clearly enables

higher performance in cash collection and

debt management.

These elements of the Order to Cash

process are something to consider when

you are seeking to improve the standing and

performance of your credit management

function. These elements also form a part

of the CICMQ programme’s six criteria –

Policy and Compliance, Customer Service,

Performance Monitoring, Personal and

Professional Development and Stakeholder

Management. Putting this together into a

plan of action becomes your roadmap for

improvement. All CICMQ organisations

strive for best practice and share this with

others.

Getting better never stops and, as we

know, the credit manager can never take

their foot off the accelerator, but we need

also to recognise that it is not just the credit

team’s responsibility to manage credit and

debt. Looking at what drives debt in your

organisation and sharing that responsibility

is also part of the credit manager’s role.

For more information please contact

cicmq@cicm.com.

Chris Sanders FCICM

Head of Accreditation – CICMQ.

It is true that the sales

ledger is the window

into an organisation’s

processes. To be more

accurate, it is the

window into how good

(or bad!) those processes

are.


TECHNOLOGY FOCUS

CHRISTMASAPPS

Our ongoing series has taken a festive twist. Credit Management takes a look

at the most useful apps for tablets and smartphones to help with financial

planning and gift buying for Christmas.

Got a great app?

Tell us about it at editor@cicm.com

CHRISTMAS GIFT BUDGET

Using Christmas Gift Budget you can add person and gift

budgets, create groups, and it helps to keep track of budget and

gift purchase status as well. One of the best features is a pass

code that keeps your Christmas gift shopping list and budget

secret from others.

AVAILABILITY: Android

COST: FREE

MYSUPERMARKET

mySupermarket lets you compare food prices across the UK’s

biggest supermarkets. You can create shopping lists, and add

alert notifications if products you enjoy drop below a certain

price. And if you’re not sure where to do your main Christmas

shop, you can find out which supermarkets Which? readers

love, using the supermarkets compared guide.

AVAILABILITY: Android/iOS

COST: FREE

WISH

Wish suggests flash deals in categories of your choice such

as dresses, watches and makeup, and allows you to buy them

directly from the app.


COST: FREE

ETSY

Etsy is the ideal app for finding handmade and vintage presents. There

are four tabs: For You, which recommends products based on your likes;

Etsy Picks, a curated list from Etsy Editors; Local, showing nearby deals;

and the Holiday Gift Guide. Etsy is the app you need if you want to find a

custom gift with a personal touch.

STREETLINK

Christmas is also a time to think of others – StreetLink allows

members of the public to inform local authorities about rough

sleepers in their area and help get them off the streets.

AVAILABILITY:Android/iOS

COST: FREE

NOTONTHEHIGHSTREET

This app picks products from the UK’s best small businesses

that are not on the high street. You can choose from an array

of custom-made jewellery and homeware without having to

search around looking for a different gift for that ‘difficult to

buy for’ person any longer! Notonthehighstreet also has a

variety of experiences on offer, such as urban beekeeping or

gin making.

AVAILABILITY: iOS

COST: FREE


COST: FREE

VOUCHERCODES

When you open VoucherCodes for the first time you’ll be asked

to list some brands that you like. This determines which offers

appear in the ‘Tailored for you’ section. Many of the codes on

this app are for food, and the Nearby tab is worth taking a look

at if you’re keen to save money on lunch. The VoucherCodes

app also includes advice on the best champagne and the best

Christmas pudding.

AVAILABILITY: iOS

COST: FREE



PAYMENT TRENDS

BAH HUMBUG

The latest monthly business to business payment

performance statistics.

AUTHOR – Jason Braidwood FCICM(Grad)

TIS the season to be jolly, or is it? Last month

saw signs of encouragement as the average

Days Beyond Terms (DBT) figures across

regions and sectors fell back into line

following a blip the month before.

This month, however, things have

fluctuated again, and not in a good way. The average DBT

figures across regions and sectors are on the up again, to

16.0 days and 15.9 days respectively.

SECTOR SPOTLIGHT

The table does not make for particularly pleasant reading

this month, with only five sectors showing improvement.

It has, however, been an encouraging month for the

Energy Supply sector, posting the biggest improvement

across the board with a reduction of 4.0 days and with

that moving off the bottom of the table. Not too far

behind are Wholesale and Retail Trade and Real Estate,

which have reduced their DBT scores by 3.0 and 2.5 days.

It has also been a successful month for Agriculture,

Forestry and Fishing and Public Administration, which

have all reduced their DBT. Hospitality remains at the

top of the table with a DBT of 9.8 days despite a slight

increase.

At the opposite end of the scale, it has been a very

poor month for both International Bodies and Business

from Home, with increases of 6.5 up to 18.6 and 5.9 up

to 19.2 DBT. Meanwhile, Business Admin and Support

continues to slip down the rankings, with DBT now up to

18.7 days. Mining and Quarrying (17.4 DBT), Real Estate

(17.2 DBT) and Financial and Insurance (16.8 DBT) are all

moving in the wrong direction. It has also been another

disappointing month for Professional and Scientific,

now sitting rock bottom with a DBT of 21.6 days.

REGIONAL SPOTLIGHT

The regional standings are also a cause for concern,

with Scotland the only region to show improvement,

reducing their DBT to 16.0 days and ending their lengthy

stint at the bottom of the table. Things only get worse for

London however, with their DBT increasing a further 4.5

up to a worrying 20.7 days.

Elsewhere, the South East, which topped the table

last month with a DBT of 9.7, has experienced a sharp

increase up to 14.4 days. Similarly, Yorkshire and

Humberside’s DBT has jumped from 9.8 to 14.2 days,

demonstrating the fluctuation in regional performance

on a month-by-month basis.

Perhaps it is not the time to panic, but it is a concern

to see the majority of sectors and regions moving in

the wrong direction when it comes to late payments,

especially on the back of an encouraging last month.

Ongoing uncertainty looks like it is here to stay for the

foreseeable future, so will we have to wait and see how

things fare as we enter the New Year and edge closer

towards the dreaded Brexit deadline.

Jason Braidwood FCICM(Grad),

Head of Credit and Collections at Creditsafe Business

Solutions.

Getting Better

-4.0 Energy Supply

-3.0 Wholesale & Storage

-2.5 Transportation & Storage

-1.1 Agriculture

-0.7 Public Administration

Getting Worse

6.5 International Bodies

5.9 Business from Home

3.3 Health & Social

3.0 Other Service

2.4 Water & Waste

Top Five Prompter Payers

Top Five Prompter Payers Oct 18 Change from Sep 18

South West 13.8 1.9

Yorkshire and Humberside 14.2 4.4

South East 14.4 4.7

West Midlands 14.7 1.9

East Anglia 14.7 0.3

Top Five Prompter Payers

Region Oct 18 Change from Sep 18

Hospitality 9.8 0.8

Entertainment 11.7 2.0

Education 12.6 1.4

Public Administration 12.9 -0.7

Wholesale and retail trade 13.1 -3.0

Bottom Five Poorest Payers

Bottom Five Poorest Payers Oct 18 Change from Sep 18

London 20.7 4.5

North West 17.6 3.7

Northern Ireland 17.5 1.9

East Midlands 16.5 3.0

Scotland 16.0 -0.3

Bottom Five Poorest Payers

Region Oct 18 Change from Sep 18

Professional and Scientific 21.6 2.6

Business from Home 19.2 5.9

Business Admin & Support 18.7 1.1

International Bodies 18.6 6.5

Mining and Quarrying 17.4 1.0


PAYMENT TRENDS

AUTHOR – Jason Braidwood FCICM(Grad)

Perhaps it is not the time to panic,

but it is a concern to see the majority

of sectors and regions moving in the

wrong direction when it comes to

late payments.

SCOTLAND

-0.3 DBT

NORTHERN

IRELAND

1.9 DBT

WALES

2.1 DBT

NORTH

WEST

3.7 DBT

YORKSHIRE &

HUMBERSIDE

4.4 DBT

WEST

MIDLANDS

1.9 DBT

EAST

MIDLANDS

3.0 DBT

LONDON

4.5 DBT

EAST

ANGLIA

0.3 DBT

SOUTH

EAST

4.7 DBT

SOUTH

WEST

1.9 DBT

Getting Better – Getting Worse

0.3

3.0

4.5

3.7

1.9

-0.3

4.7

1.9

2.1

1.9

4.4

East Anglia

East Midlands

London

North West

Northern Ireland

Scotland

South East

South West

Wales

West Midlands

Yorkshire and Humberside


CAREERS ADVICE

A bright future

Salaries rise faster outside of

London as credit professionals

continue to be in demand.

AUTHOR – Karen Young

THE latest annual Hays Salary

& Recruiting Trends 2019

guide shows that credit

professionals are confident

in their skills and prepared to

move roles as average salaries

rise higher in areas outside of London. As

credit talent continues to be in demand,

salaries have risen steadily again this year

at 2.4 percent, above the UK average of 1.9

percent.

Regionally, the largest increases

witnessed for credit professionals were seen

in Northern Ireland at 7.3 percent, followed

by 6.9 percent in the North West, 6.1 percent

in Scotland and 4.7 percent in the North

East. Credit professionals in these areas

are in particular demand, and as such are

aware of their worth, and this together with

skills shortages, is inflating salaries further.

Encouragingly the steady salary rise seen

over the past few years looks set to continue

as 81 percent of finance employers said

their salaries increased this year, and over

three-quarters (77 percent) hope the same

will happen again next year.

As a result, over half (57 percent) of

credit professionals say they are satisfied

with their salary, an increase from 43

percent last year. Pressure remains however

for employers to continue to keep salaries

above market rate, as close to two thirds (63

percent) of professionals in the industry

expect their salary to increase again in the

year ahead.

Two fifths (40 percent) of credit

professionals said they have moved jobs

in the last 12 months, while a further

37 percent said they had considered

leaving their roles. This figure combined

points towards a large proportion of

professionals who would be tempted

to move for the right offer. With

over two-thirds of employers expecting to

encounter a shortage of suitable applicants

over the next 12 months, organisations

should look to tap into this passive talent

pool.

Looking ahead, over half (54 percent)

of professionals expect to move jobs in

the next 12 months, higher than the year

prior at 49 percent. Over a third (37 percent)

of the 49 percent plan to look for a new job

in the next six months. The top reasons

for professionals wanting to leave their

roles is split equally between salary/and

benefits packages and a lack of future

opportunities – both at 23 percent.

Half of professionals also cited that

an improved salary or benefits package

would tempt them to move jobs indicating

that salary will be an important factor for

employers if they hope to tap into the

talent market in the year ahead.

JOB SATISFACTION

Alongside an increase in salary

satisfaction, over two-thirds (67 percent)

of professionals working in credit say they

are currently satisfied in their roles and 49

percent feel there is scope for progression

within their organisation, an increase

from 34 percent.

While it’s reassuring employers

have clearly been more transparent in

communicating progression pathways

within their organisations, only 39 percent

of credit professionals feel positive about

their career prospects. Although 94

percent of finance employers expect their

organisation’s activity levels to increase

or stay the same over the next 12 months,

it’s evident employees may be more

concerned about future opportunities as

economic uncertainty continues.

WORK-LIFE BALANCE

Over half of professionals (55 percent)

rated their work-life balance as good,

above the UK average of 45 percent. 51

percent of professionals said they would

change their working hours, including

flexible working in order to improve this.

Additionally, 29 percent of professionals

said work-life balance was the most

important factor when considering a

new role with flexi-time cited as the most

popular option. Positively, employers

are aware of the importance of this for

professionals. Aside from salaries, finance

employers say work-life balance including

flexible working was the most important

factor towards helping to attract staff.

While employers may be concerned

about the impact of changing working

hours when already struggling with staff

shortages, offering and promoting these

options is a valuable aid to attraction and

retention.

EMPLOYERS UNAWARE

Our research indicates a clear mismatch

between the benefits professionals in the

industry desire and what employers are

currently offering. Only two of the top five

benefits for employees feature within the

top five benefits offered by employers.

The top benefits for 60 percent of

professionals when looking for a new

role were: over 28 days paid annual

leave; pension provision above the legal

minimum (51 percent); health insurance

or private medical care (51 percent); life

insurance (43 percent); and training and/

or professional certification support (38

percent).

Employers, however, believe the top

five benefits for attracting talent are:

childcare voucher schemes (71 percent);

pension provision above the legal

minimum (54 percent); cycle to work

schemes (51 percent); financial support

for professional studies (49 percent); and

health insurance/private medical care (45

percent).

It’s evident that benefits aid worklife

balance such as a generous holiday

entitlement are attractive to employees

and employers who want to attract the

right talent should think about how they

can tailor their benefits to suit a changing

workforce.

Overall, it’s positive that professionals

in the sector have the confidence to move,

encouraging employers to offer increased

and competitive salaries. Employers

looking to hire in the coming year will

need to act decisively as competition

for talent continues to be fierce. Those

looking for the best talent will require a

clear progression map for their teams, as

employees are not scared to move in order

to build a long-lasting career in credit

management.

Karen Young is Director

at Hays Credit Management.


CAREERS ADVICE

CREDIT SALARIES UK 2019

Credit

Controller

Senior

Credit Controller

Credit Risk

Analyst

Credit Control

Supervisor

Credit

Manager

Group Credit Manager

/ Head of Credit

Credit

Director

Region 2019 2019 2019 2019 2019 2019 2019

East Midlands £23,000 £25,000 £40,000 £30,000 £40,000 £58,000 £80,000

East of England £24,500 £28,000 £40,000 £30,000 £38,000 £55,000 £70,000

London £27,000 £32,000 £50,000 £36,000 £55,000 £72,000 £95,000

North East £21,000 £25,000 £32,000 £26,000 £38,000 £60,000 £75,000

North West £23,500 £26,000 £40,000 £30,000 £42,000 £60,000 £80,000

Northern Ireland £23,000 £26,000 £32,000 £30,000 £42,000 £55,000 £70,000

Scotland £22,500 £26,000 £32,000 £30,000 £40,000 £55,000 £65,000

South East £26,500 £30,000 £40,000 £34,000 £45,000 £65,000 £85,000

South West £24,500 £26,000 £42,000 £27,000 £38,000 £55,000 £70,000

Wales £20,000 £23,000 £30,000 £27,000 £36,000 £52,000 £65,000

West Midlands £23,500 £26,000 £40,000 £31,000 £45,000 £65,000 £85,000

Yorkshire and the Humber £23,000 £24,000 £30,000 £27,000 £38,000 £57,000 £70,000

National Average 2019 £23,500 £26,417 £37,333 £29,833 £41,417 £59,083 £75,833


LEGAL MATTERS

The European Order

for Payment

How to use an EOP to enforce cross-border debt.

DD +353 1 790 9415

E susan.connolly@dwf.law W www.dwf.law/recover

Susan Connolly –

Senior Associate Commercial

Litigation and Professional Indemnity

THE European Order for

Payment (EOP) is an underused

but highly effective

tool which allows for

enforcement of crossborder

debts. Council

Regulation (EC) 1896/2006 brought about

the EOP process, which allows a creditor

to enforce a debt against a debtor residing

in another European Member State (with

the exception of Denmark). The procedure

is administrative in nature and is faster

and less costly than litigating uncontested

money claims.

For a claim to have a cross border

element, at least one of the parties must

be domiciled or habitually resident in

an EU Member State other than the state

where the Court is dealing with the EOP

application. Article 3(3) of the Regulation

outlines that the appropriate point at which

to determine if a case can be considered

as being of a 'cross-border' nature is the

point at which the application is made as

opposed to the point at which the subject

matter of the claim arose.

The procedure is available for 'civil and

commercial matters in cross border cases

irrespective of the nature of the court

or tribunal'. The Regulation expressly

excludes revenue, customs, administrative

and state liability claims.

Jurisdiction is determined in

accordance with the Brussels I Regulation

except in the cases of disputes arising

from consumer contracts where the

defendant is a consumer. In that instance,

the Brussels I Regulations provides that

the jurisdiction must be the Member State

where the defendant is domiciled.

The EOP procedure is particularly

helpful in money claims for a specific

amount, due and owing at the time the

application is submitted.

The procedure is that the creditor

completes a series of forms in their own

Member State. The initiating document

is a Form A, which sets out the details of

the parties, the amount claimed including

principal, any interest or contractual

penalties, a summary of the claim and

supporting evidence.

The Court first examines the

application but does not consider the

evidence. There is a Form B stage which

affords applicants an opportunity to

rectify applications if the Court deems it

necessary. If the Court rejects the claim, it

will issue a form D. If the Court only finds

that part of the claim should proceed, it

will issue a Form C.

If the Court finds that the claim has

merit, an EOP will issue by means of Form

E. This contains the names and addresses

of the parties and the order to pay the

amount claimed, the interest, contractual

penalties and costs. The debtor is notified

by means of the Form E of the obligation

to (1) pay the amount owed or (2) dispute

the EOP by lodging a statement of

opposition by means of Form F within 30

days. Form E also notifies the debtor that

if a statement of opposition is lodged, the

matter must thereafter be dealt with by

the courts of the Member State of origin.

Form E must be served on the debtor

in accordance with the national law of the

Member State of origin and the method of

service must comply with Articles 13 to 15

of the Regulation.

The procedure to proceed from Form

A to Form E should take no more than

30 days, but this does not include where

a Form B amendment or rectification is

required.

If the debtor wishes to challenge the

EOP a Form F must be lodged. There is

no requirement to state grounds for the

opposition.

If no opposition is lodged, the Court

will issue Form G which is a declaration

of enforceability. Any EOP that has been

declared enforceable in its Member State

of origin is therefore enforceable in other

Member States.

The law of the Member State of

enforcement will determine the means

by which the EOP may be enforced. Any

remedies which are available in relation

to a judgment or order made within a

Member State are also available in relation

to the enforcement of the EOP.

This procedure is well worth

considering as a means to cut through

lengthy and costly procedures when

dealing with debtors outside of your own

jurisdiction. The procedure affords the

opportunity to have an enforceable order

in a very short timeframe. In conventional

civil litigation, the court proceedings can

be lengthy and costly only to be followed

by what can be equally lengthy and

costly enforcement procedures. Where

available, the EOP can have creditors at

enforcement state in the Member State

of enforcement significantly sooner than

they would be if court proceedings were

pursued.

This information is intended as a general

discussion surrounding the topics covered

and is for guidance purposes only. It does

not constitute legal advice and should

not be regarded as a substitute for taking

legal advice. DWF is not responsible for

any activity undertaken based on this

information.

As a CICM member you can receive free legal advice from

DWF. Visit the CICM website and click on the free Advice Line.


A Credit Manager walks into a bar…

…and the Finance Director’s buying. Well, why not? DSO is down,

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building rapport with customers, not ploughing through chase letters

or wrestling complicated spreadsheets.

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collection costs for some of the UK’s biggest names.

We want to find out how we can help you too.

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01235 856400 • info@credica.co.uk • www.credica.co.uk


EXCLUSIVE REPORT

RISKY

BUSINESS

A global outlook of business performance in Q3.

AUTHOR – Nalanda Matia

THE global economic

upswing that caused an

uptick in global growth

around mid-2016 and early

2017 has largely sustained

itself, with Real GDP

growth rates for most country groups

continuing to expand before stabilising

in the next few years. While the overall

trend seems to be similar in general, the

outlook for emerging markets remains

more positive. On average, the emerging

nations are expected to maintain growth

rates of about 4.5 percent in 2019, while

the global average hovers around a tame

three percent, although managing to

remain above the post-recession average

of two percent. Divergence will occur

among the advanced economies as well,

as Dun & Bradstreet economists expect US

growth to decelerate post-2019 while the

UK is expected to maintain an accelerated

pace, given the nation is able to achieve

the desirable outcome of a negotiated

Brexit. From an economic perspective,

Brexit negotiations aiming at retaining

open trade with and access to the financial

markets of the European Union will prove

to be most beneficial.

However, some global risks continue

to linger. Markets have been rallying

recently on reports that China and the US

are making headway on trade, but tensions

still remain. Another cause for concern

and a possible threat to global growth

prospects is that China seems to be in the

initial phases of an economic slowdown

that primarily emanates from declining

effectiveness of several key factors like

quality of labour, efficient re-allocation of

capital that fuelled the country’s impressive

economic expansion in the past. On the

other hand, matters have eased slightly on

the prospect of a North American trade war

by the new agreement (USMCA) between

the US, Mexico and Canada. Although final

ratification and implementation of USMCA

remain pending, the agreement went a

long way to allay fears of a possible trade

war in the region impacting sustainable

growth within it and spreading globally.

However, none of the above factors nor the

currency crises in Argentina and Turkey

will have a significant bearing on the

outlook for global growth – at least in early

2019.

According to the Office for National

Statistics, overall UK GDP grew by 1.4

percent on a year over year basis in the second

quarter of 2018. A look into the vertical

specific view shows a wide range of growth

among the key industry segments. The

Services segments, led by the Professional,

Scientific and Technical Activities registered

the most growth (5.3 percent) since Q2 2017,

followed by Manufacturing and Real Estate

which grew 1.3 percent and 0.5 percent

respectively. Other segments like Health and

Social activities, Agriculture and Natural

Resources and the Financial and Insurance

sectors saw some contraction since Q2 2017.

Clearly, imbalances between important

sectors of the British economy as the nation

treads uncertainties surrounding Brexit.

Despite pockets of concern, the UK

labour market fundamentals remain fairly

healthy. Unemployment rate stands at its

post-recession low at four percent. Also,

labour productivity measures by the ONS’

Output per Worker index has continued

to climb since late 2015, with a few dips

along the way. There is some growth seen in

wages (Average weekly earnings), which has

increased by a little over two percent over

the past year – the growth rate being slightly

slower than that seen over the past quarters

and also from what could be expected in the

current job market.

Moving from the fundamentals of the

economy, to that of business health, we take

a detailed look at business liquidations by

industry. Significant variation exists between

sectors, with sectors like Personal Services

and Agriculture showing an increase in the

number of business liquidations over the

past year. Although all these sectors show

an increase in business liquidations during

the current quarter, differences in the trend

exist among them.

A third group of industry segments, led

by Transportation/Comms/Utilities and

Business Services, show a considerable

drop in business liquidations. Although all

these above-named sectors show a certain

outcome (increase/decrease/no change)

from the business liquidations perspective,

during the current quarter, differences in

the trend exist among them and may tell

a more detailed story. For example, for

the Agriculture, Government or the Retail

sector, the number of business liquidations

remain considerably lower than the post-


EXCLUSIVE REPORT


recession (2010-11) era while for sectors like

Personal Services, Construction or Machinery

Manufacturing have not seen any significant

reduction in the number of liquidations since

the post-recession period. These latter group

of industry segments may be suffering on the

stability perspective and it needs to be seen

whether or not policies could be put in place to

help businesses continue on the path of stable

and sustainable growth. Overall, the number of

businesses that closed their doors in the past year

has declined by a little over 20 percent. However,

on the whole, the volatility in change of business

failures has declined considerably, businesses

within the UK economy have slowly gained

stability over time, attaining maximum stability

around late 2015 through mid 2017. Business

liquidations seemed to take an upturn on the

annual basis again in the second half of 2017,

but have been steadily declining, achieving the

highest decline since Q1 2016 during the current

quarter – but there are pockets of concern that

need further attention.

A potent leading indicator of business

stability is a business’ payment performance

– how promptly a business has been paying its

creditors and/or suppliers. The 12-month view

of the percentage of prompt payments made

by UK businesses on an average shows that the

metric has been quite stable over this period of

time. For the past year, the percentage of prompt

payments for these businesses have hovered

approximately around the 30 percent mark,

with small improvements around early 2018 and

stabilising around 31 percent currently after a

slight drop earlier in the quarter. This number

Nalanda Matia

In conclusion,

the overall health

of the business

population in

the UK seems to

be fairly robust,

with pockets of

concern present

in some major

industries.

varies considerably for business segments – and

have a strong correlation with business size.

The smallest businesses (by employee counts)

seem to make the highest percentage of prompt

payments – over 35 percent of their account

payables are paid promptly within terms. This

percentage declines systematically, dropping to

14 percent of prompt payments for mid-sized

businesses with 101-250 employees on their

payroll. The percentage of prompt payments for

the largest businesses in the country with more

than 1,000 people under their employ pay only

about six percent of their accounts payable in a

prompt manner. This trend is not only true for

the current recording period, but holds true for

all historical periods as well and clearly points to

the position of confidence that large businesses

enjoy by virtue of their market power and possibly

brand name in the industry. This also brings

to the forefront the plight of small businesses,

that in spite of their incessant cash-constrained

state, they do not have the bargaining power to

attain more favourable terms for their accounts

payable and are obligated to pay a relatively

higher percentage of these in a prompt manner.

This trend can best be addressed by regional and

local authorities by providing special financing

programs for small businesses in need to help

them maintain better payment terms as well as

gain stability and reduced financial stress.

As for all other metrics reviewed above,

the percentage of prompt payments vary

considerably by industry as well. This variation

is usually attributed to the norms set within

an industry which vary considerably from

industry to industry. As can be seen from the


continues on page 44 >

EXCLUSIVE REPORT


chart, the Agriculture sector pays close

to 55 percent of their accounts payables

in a prompt manner. This is followed by

Construction at approximately 40 percent

and then the Personal Services Sector

by about 33 percent. The above-named

sectors, specifically the Agriculture and

Construction verticals have a seasonality

element in their operations and earning

cycle and possibly not able to bargain

payment terms beyond their operating

periods and have to pay their suppliers

relatively promptly. For all other industries,

the percentage of prompt payments

remains below the national average of 31.2

percent. It seems that the Government is

able to evoke enough confidence among its

suppliers to be able to pay only 20 percent

of their accounts promptly. The industry

payment pattern is something that is

noticed in historical periods as well – not

just the current one and seem to be wellestablished

norms among businesses in

each sector.

The final segmented look at the

percentage of prompt payments is by

regions. Like the last two segmentations,

the time series view of prompt payments

shows that the pattern of percentage of

prompt payments has remained more or

less stable over the past 12 months.

A glance at the regional breakdown

of percentage prompt payments shows

that the East Anglia region registers the

highest percentage of prompt payments

with 38 percent of their accounts payable

promptly. Greater Manchester, which is on

the other side of the spectrum pays 25.1

percent of their accounts payable promptly.

Businesses in the United Kingdom do not

vary widely in payment manner as they do

by business size or by industry segment.

This indicates some consistency in the

nation’s economic profile as far as the

larger regions are concerned, which will

prove to be as a positive as the country

explores the arduous process of Brexit.

Finally, we take a look at UK business

health under the backdrop of Dun &

Bradstreet’s Failure and Delinquency

scores, classifying business into four

categories based on their risk profiles.

The first category are businesses with the

lowest risk profile, by both delinquency and

failure perspectives. Around 82 percent of

all businesses considered for this study fall

into this segment. These are the ideal set

of businesses to engage in commerce and

will prove to be the ideal customers down

the line. The next segment is made up of

businesses that are marked as the riskiest

with high probability of failure in the next

12 months, but with a low risk of severe

delinquency. These are the businesses

that might be able to cover their payables

before closing their doors but need to be

monitored very closely. It might be worth

to cut as many ties with these businesses

as possible.

The UK economy has approximately

one percent of these businesses that might

face insolvency in the next 12 months.

The third risk segment are businesses

that are in a contrasting situation – with

high risk of delinquency in the next 12

months, but not projecting a high risk

from the standpoint of liquidation. These

businesses are ones under severe financial

duress and having severe difficulties

managing their cashflow. About 13 percent

of all businesses fall into this category and

any relationship with them needs to be

handled with utmost caution. The final

segment – about four percent of the UK

business population – are considered to

be under severe risk. These businesses

face the risk of both severe delinquency as

well as insolvency in the next 12 months.

Any commercial relationship entered

into with these set of businesses has a

very high probability of incurring severe

losses.

In conclusion, the overall health of the

business population in the UK seems to

be fairly robust, with pockets of concern

present in some major industries. With

the country’s inflation hovering above

target, and uncertainties looming in

the next few quarters, monetary policy

is expected to normalise gradually. To

help businesses gain stability and move

towards a sustainable growth path in

this environment, internal policies like

strategic investments and adoption

of productivity-augmenting technologies

may prove to be effective.

Nalanda Matia is Senior Director,

Econometrics Solutions at Dun &

Bradstreet.


“CSA compliance essentials is a

one stop shop to key compliance

changes and highlights.

It helps me keep up-to-date with

factors that could potentially

impact my firm and its clients

and customers, saving me lots of

time having to complete research

myself.”

Hayley Crombleholme

Ascent Performance Group Ltd

CSA compliance essentials

Compliance updates straight

to your inbox

• Monthly compliance updates with accompanying questions to aid learning

• Access to a regularly updated knowledge database

• Email alerts to notify when new content is available

• The ability to trace progress for audit purposes and compliance records

• Annual certification

To learn more contact:

t: 0191 217 3073

e: sales@csa-uk.com

or visit

www.csa-uk.com


EDUCATION

Have you heard the news?

CICM Qualifications are changing

We are delighted to be launching our new programme of professional

qualifications. With a simpler and more flexible structure to help you and

your teams find the right level and path to become CICM qualified, we are

now offering more flexibility in subject and study methods.

SO WHAT’S NEW? SOMETHING FOR

EVERYONE AND FLEXIBILITY

You can now choose to study a small CICM CPD

‘award’ or unit that you can bank to build up to a

full CICM qualification over time, or you can decide

to study for a Certificate or Diploma leading to

Professional Membership up front.

THE RIGHT LEVEL

We now have combined Credit & Collections

qualifications at three levels:

Entry Level – the benchmark for credit controllers,

collectors and enforcement agents working in

operational roles, with little or no experience in the

profession.

Intermediate – the benchmark for credit

controllers, collectors working in senior operational

roles.

Advanced – the benchmark for credit and

collections management, strategic/managerial level.

THE RIGHT CONTENT AND SUBJECTS

We are offering you and your teams the opportunity

to tailor your qualifications and learning to fit your

needs. With a selection of awards or units for each

level, you can choose to study the areas that fit your

role, business or career aspirations.

THE RIGHT STUDY METHODS

AND TIME COMMITMENT

Whether you want to study in groups, at home or

online, we are offer a wide range of study options.

I AM STUDYING ALREADY –

WHAT SHOULD I DO NOW?

Do not worry. If you are part way through your CICM

qualification we will move you to the new format

automatically if that is the best path for you.

You can stay on the current qualification route if this

suits you better (if you only have one further unit to

pass) and you will have until 2021 to complete the ‘old’

qualification assignments and exams.

LOOK IN YOUR INBOX

We will be contacting our members soon with more

details about the new qualifications and instructions

on what to do if you are part way through your CICM

qualification.

ENTRY LEVEL CERTIFICATE AND

DIPLOMA IN CREDIT AND COLLECTIONS

For professionals working at operational level, or

looking for an introduction to credit, collections or

enforcement.

CHOICE OF 7 CICM AWARDS

Choose one as a CPD

award, or build to the Entry

Certificate or Diploma.

ENTRY LEVEL

CERTIFICATE

2 CICM awards at

Entry-Level

Regulated by the qualifications regulators in England, Wales and Northern Ireland

INTERMEDIATE DIPLOMA IN

CREDIT AND COLLECTIONS

For professionals working in, or working towards,

senior operational roles in credit, collections or

enforcement.


Choose 1 as a CPD award,

or build to the CICM

Intermediate Diploma.

INTERMEDIATE DIPLOMA

4 CICM INTERMEDIATE

AWARDS

including at least one

mandatory unit

LEVEL 2

ENTRY LEVEL

DIPLOMA

Any 4 CICM awards

at Entry-Level


ADVANCED DIPLOMA IN CREDIT

AND COLLECTIONS MANAGEMENT

For professionals working in, or working towards,

managerial or leadership roles in credit, collections

or enforcement.


Choose 1 as a CPD award, or

build to the CICM Advanced

Diploma.

ADVANCED

DIPLOMA

Any 4 CICM

Advanced awards

LEVEL 3

Diploma leads to

ASSOCIATE

(ACICM)

MEMBERSHIP

LEVEL 5

Diploma leads to

MEMBER LEVEL MCICM (GRAD)

(must have Intermediate

Diploma or MCICM Experience

Assessment pass)


See www.gov.uk to compare qualification levels in different countries.

You can get in touch any time to talk to the CICM

qualifications team. They will be able to give you advice on

the next steps. E: professionalqualifications@cicm.com

T: 01780 722909


CICM

QUALIFIED

your way

CICM qualifications

are changing

In a world where time is your most precious

commodity, we understand that you need flexibility

and different options at different times of your life

and career.

Find out more

T: 01780 722900 W: www.cicm.com

E: qualifications@cicm.com

Where will the new flexible

CICM qualifications take you?

WHAT

ARE YOU

WAITING

FOR?

Entry Level awards, Certificate and Diploma in Credit & Collections (Level 2)

Intermediate awards and Diploma in Credit & Collections (Level 3, leading to ACICM)

Advanced awards and Diploma in Credit & Collections (Level 5, leading to MCICM (Grad)*

* MCICM (Grad) is awarded to those who meet specific criteria. Please call us for more information.

Your choice, your way: subject, study method, place and time


EDUCATION - LEARNING ONLINE

KNOWLEDGE

TESTS

NEW

Knowledge Hub

Premium

Content

Check your knowledge of key credit management,

collections and enforcement areas with these knowledge tests.

PREPARE FOR A CICM AWARD

Equally valuable as a baseline test of your team’s knowledge on CICM Knowledge Hub, these multiple

choice questions support preparation towards CICM Level 2 and 3 awards and credit controller/

collections apprenticeships.

Each test includes advice on the art of answering multiple choice questions, the opportunity to

practice multiple choice exam questions for each syllabus area working at your own pace, feedback

on the correct answer, a final timed mock exam accessed anywhere/anytime, and a mock exam

completion certificate for learners who complete course evaluations and pass the mock.

KNOWLEDGE TESTS ARE AVAILABLE IN:

• Credit Management (trade, export and consumer)

• Consumer Collections NEW programme

• Consumer Credit Management

• Taking Control of Goods

• Trade Credit Management

• Export Credit Management

• Business Environment

• Business Law

The knowledge test course takes around three hours to complete,

including the pre-reading, mock exam at the end, a course evaluation

and CPD reflection. The course could form part of a taught programme

leading towards a CICM award or stand-alone knowledge test.

You can complete multiple choice questions for each module all

at once or over several visits to suit you. The one-hour mock exam

must be completed in one go, however it can be repeated on more

than one occasion.

Course fees apply

CICM members £25 for 12 month licence * Non-members - £83

Learners studying through a CICM Credit Academy virtual class,

evening class or Learning Support will have free access to the related

test as part of their programme.

The Taking Control of Goods test is part of an online course

sponsored by the High Court Enforcement Officers Association and is

therefore offered free to CICM members (Non-member fee - £50*).

CPD

3

Email: learningsupport@cicm.com or

call 01780 722909 to purchase course

*Fees are subject to VAT

CICM MEMBER

EXCLUSIVE

Your CICM lapel badge

demonstrates your commitment to

professionalism and best practice

TAKE PRIDE IN

WEARING YOUR BADGE

If you haven’t received your badge

cicmmembership@cicm.com

Debt Recovery is

nothing new to Keebles.

Having practised successfully in this

area for many decades, you can be

confident inour experience and ability.

We appreciate the needs of our clients

and understand that each client’s

requirements are different. Whether

you are alarge organisation requiring

regular management reports and file

reviews, or asmall business growing

rapidly, but with little experience of the

debt recovery process, we have the

flexibility tocater for your needs.

We work closely with our clients and

will tailor aservice level agreement so

that we both know exactly what needs

to be achieved and at what cost.

No Recovery No Fee

We do not charge for issuing aLetter

Before Action. Wewill only charge you

commission, at an agreed rate, on any

sums recovered. If we are unable to

recover your debt atthis stage it will

cost you nothing.

No Hidden Costs

For many cases, where itisnecessary

to issue legal proceedings, we can

offer service on afixed fee basis with

no hidden costs and, where possible,

we will make additional claims onyour

behalf for interest and compensation

under The Late Payment ofCommercial

Debts legislation to further minimise the

recovery cost to you.

Success is the Key

Over the past 5years we have

successfully recovered over 80%

of our Clients’ debts in full or by

way ofanagreed settlement.

Call now totalk toamember of

the Debt Recovery Team:

0113 399 3470

charise.marsden@keebles.com

www.keebles.com

HR MATTERS ROUNDUP

Unintended Consequences

Giving notice but not resigning, searching an

employee’s mobile phone, and the new parental

bereavement act.

CAN an employee ‘resign’ and

not mean it? It appears that

they can following East Kent

Hospitals University NHS

Foundation Trust v Levy.

The claimant, Mrs Levy,

was employed in the records department

of the trust. She successfully applied for

an internal position in the trust's radiology

department, subject to pre-appointment

checks.

After having been given the conditional

offer and following some form of

altercation with another staff member in

the records department, Levy handed in

a letter stating: ‘Please accept one month's

notice from the above date’.

On receiving this letter Levy's manager

wrote back accepting the ‘notice of

resignation’ and referring to her last

working day in the records department.

AUTHOR – Gareth Edwards

Her manager did not complete a staff

termination form and did not deal with

any other outstanding issues, such as

making a payment for accrued but unused

annual leave.

Following the completion of the

pre-appointment checks, the offer of a

position in the radiology department was

withdrawn, prompting Levy to attempt

to retract her notice. The trust refused

to accept the withdrawal of her notice,

stating that her employment would end at

the end of her notice period. Levy made

an unfair dismissal claim stating that she

had not resigned.

The Employment Tribunal (ET) held

that Levy's letter had been ambiguous as

to whether she was giving notice to leave

the records department or the trust. The

ET went on to find that, from the trust’s

actions, it could be shown that the notice

had been taken by the trust to be notice

of Levy's departure from the records

department and therefore Levy had not

resigned. Her unfair dismissal claim was

successful.

The Employment Appeal Tribunal

(EAT) agreed with the ET, holding that

Levy's letter had been ambiguous despite

the use of the word ‘notice’. On these

particular facts, the EAT held that the ET

had been entitled to find that the words

used in the letter related to Levy's position

in the records department.

The decision highlights that employers

should not be too eager to accept an

employee's apparent resignation without

considering the meaning behind it,

particularly where there could be any

ambiguity as to the employee's intentions.

Changing phone passwords without permission

IN what circumstances can an employer

search an employee’s mobile phone? The

High Court case of Richmond v Selecta

Systems Limited offers guidance in that

it found that a search can be conducted

where a company wants to protect its

interests, has a reasonable suspicion that

an employee has openly taken confidential

information, and the mobile phone has

been provided by the employer.

However, in this case, the managing

director's actions of changing the employee's

passwords in relation to personal accounts

(iTunes, iCloud and WhatsApp) while

searching for information, because some

company data was found, was deemed

a step too far. The court found that

the employer had breached their duty of

care owed to the employee who was deprived

of access to his personal accounts and

was therefore awarded £1,000

compensation.

The employer had been in discussions

with the employee who had worked for

the company for over 20 years, as to the

terms of his departure from the company.

The employer knew that the employee

had previously asked for copies of client

information to be made for him to keep

at home. The employee was involved in

a sales role and worked from home from

time-to-time. The information being sought

included customer contact information

as well as discounted price structures for

the company's products. The latter being

commercially sensitive information.

New Parental Bereavement Act 2018

UNDER the Parental Bereavement (Leave

and Pay) Act 2018, parents who suffer the

death of a child under the age of 18, or a

stillbirth from 24 weeks of pregnancy, will

be entitled to two weeks paid leave.

The Act, which is expected to come into

force in 2020, will give bereaved parents

a statutory right to two weeks' pay by

inserting new sections (80EA- 80EE) into

the Employment Rights Act 1996. This new

right will be subject to employees meeting

eligibility criteria similar to that of statutory

paternity pay, which includes having had 26

weeks continuous employment. However,

much of the detail is still unknown as it will

be set out in supporting regulations.

The regulations will detail among other

things the definition of ‘bereaved parent’;

how and when parental bereavement leave

and pay can be taken; and the notice and

evidence which will be required.

Gareth Edwards is a partner in

the employment team at

VWV.gedwards@vwv.co.uk.


3

YEARS

IN 2018

Credit

Controller

Accounts Receivable

Specialist

Credit Control

Supervisor

Head of

Credit

Billing

Administrator

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MAKE YOUR CASE

MAKE

YOUR CASE

With the festive season almost upon us,

Credit Management asked some of its contributors for

their top hangover cures and recipes for leftover turkey.

Brendan Clarkson FCICM

Chris Sanders FCICM

Kevin Reed

HANGOVER – drink between half-apint

to a pint of water before you go to

bed, also ensure you have a large glass

of water next to your bed for thirsty

moments in the night. In the morning

start with a decent breakfast, something

hot and stodgy! If this fails, a can of Stella

around 11.01am.

Turkey leftovers – I love a turkey

toasted sandwich. Not some half-hearted

attempt using a pre-sliced loaf but

instead with some thickly cut soda bread

lightly toasted with some melted brie

done under the grill. Add some sliced

turkey which has been warmed in the

microwave and then top with cranberry

sauce and some rocket leaves or baby

spinach. Season with salt and pepper.

Bon appetit!

PERSONALLY, I have never had a

hangover so I wouldn't know. Obviously,

that is nonsense. The best hangover

cure that I know is a full English. Now

the controversial bit – with brown sauce

as is only proper with a full English.

Tomato Ketchup is only for steak, chips,

burgers and Americans. As far as the

sausages in a full English are concerned

(there should be two) these are best cut

lengthways then spread with Marmite.

Yes, you either love it or hate it, but don't

knock it until you try it. Trust me on this I

am a credit manager!

I have two Chocolate Labradors –

believe me when I say there is never

any leftover turkey. So, what to do with

leftover turkey? Get a Labrador or two.

They will help you walk off Christmas

over-indulgence and the fresh air will

clear your head the morning after.

SO, the life of a journalist – freelance or

otherwise – is pretty hectic at Christmas.

Deadlines don’t take breaks in December.

Having said that, advertising

salespeople do like to take a break. So that

means print titles usually drop an issue

over the festive period. So, December can

become a bit of a ‘meetings boozefest’.

Hangover cures? Well, in the old days

I simply wouldn’t have stopped drinking

and a Bloody Mary, pint of stout or even

fizzy lager would sort out the headache.

Nowadays, I can’t keep up that pace.

So, my emergency hangover kit normally

includes salt and vinegar crisps and

Ribena as the first line of offence.

As for leftover turkey – I’d go with it

gently reheated and whacked between

two doorsteps of bread with an inch of

butter either side of said meat, along

with salt, ketchup and stuffing. I should

probably go and get my cholesterol level

checked!


MAKE YOUR CASE

Karen Young Peter Walker Heather Greig-Smith

AS crazy as it might seem, my best cure

for a hangover is to be brave and do some

exercise! You have to go through a bad

patch at the start as it will get worse

before it gets better, but once your pores

open and you are exercising hard you

will drink more water – sweat it out and

re-hydrate all in one cure.

I’ve got to be honest and say in our

house that the leftover turkey from

Christmas Day usually turns into Boxing

Day dinner i.e. the cold meats put out on

a platter with mashed potato and salad.

Although we always cook some fresh

pigs in blankets which go down a storm

every time. Anything that is left over

from that (unlikely) gets put into a curry

for the day after Boxing Day once I have

done duties of running relatives back

home and things go back to ‘normal’.

THE festive season can be a source of

problems including what to do with the

leftover turkey. When my late wife, a

Chinese from Malaysia, cooked turkey

for the first time, she then had to deal

with the remains. She made a soup stock

– ordinary so far – but she had brought

some shark’s fin from Malaysia, so the

result was shark’s fin soup. That was

back in 1970, but don’t do it today! Sharks

need protection, so make something less

adventurous with that stock.

I was once adventurous with wine

during an evening with some barristers

– this time we were all at a different

bar. I telephoned my tenants from the

tube station. They came to the rescue

and poured me back home. No cure for

the subsequent hangover, but at least I

arrived home safely. I will make such

rescues as an obligation in the tenancy

agreement.

THE best hangover cure has to be going

for a run – rain, shine or snow, a winter

run always leaves me rosy-cheeked and

virtuous (smug), even if it’s utter hell at

the time. A two-hour adventure through

snow-coated fields with an equally

crazy friend or a true crime podcast for

company. Followed by a nice rewarding

gin and tonic. Oh, wait...

What to do with leftover turkey?

Obviously, sandwiches – lots of

mayonnaise and salad. There is always

masses left in our house so we box it

up carefully and put it in the freezer for

future meals/curries, only to dig it out

from the back of the freezer and chuck it

away 12 months later. Must do better this

year!


SOAPBOX CHALLENGE

High Drama

The editor’s love of all things aviation

does not necessarily extend to flying

with the World’s Favourite Airline.

SOAPBOX

challenge

HAVE any of you, I

wonder, ever taken off

in a passenger aircraft

at the departure time

stated on your ticket?

That, you may argue,

is not a problem as long as you arrive at

your destination on time, and to an extent

I agree. But what really annoys me is the

unnecessary, soap-opera style drama that

we now go through before, during and

after every flight. I shall explain.

Take my recent return from a

business trip to Hamburg. Having been

patronisingly congratulated for boarding

our aircraft on time (‘Cabin crew, boarding

complete’) the Captain then adds that we

will be delayed taking off, cos although

we’re all good to go, there are delays from

Air Traffic Control. There is an audible

groan from the passengers upfront in the

posh seats.

Never fear, we’re told, while the Captain

is speaking to us, the First Officer is busy

on the blower, attempting to negotiate an

earlier slot (yeah, right). Now when I say

‘earlier’, that will of course still be later

than our actual stated departure time, so

let’s not dress it up like he (or she) is doing

us a favour.

Finally, of course, we do get away, 30

or so minutes late, but our Captain Marvel

again comes on the intercom to tell us

that there is a tail wind and he’ll put his

foot down and do his damnedest to get us

there on time, come hell or high water.

Great. Thanks skipper, but you do know

you are just delivering a service we’ve all

paid good money for, don’t you? And it

wasn’t cheap.

Then of course we have the comedy

of approaching London Heathrow, and

being told that we are going to have to

‘hold’ for ten minutes or so to the south.

‘It’s very busy’ our Captain says, ‘but

fingers’ crossed we won’t be delayed too

long.’ Fingers’ crossed? Fingers’ crossed?!

I’ll give you blooming fingers’ crossed old

son. Did you not know it would be busy?

We did, and we knew we’d fly around in

circles ‘cos we always do.

Now of course when we do finally

get the nod from the Gods at Air Traffic

Control (who must be having the time of

their lives down there working out who

they are going to let land and who they’ll

leave up top for a few more minutes),

the skipper announces ‘Cabin crew ten

minutes to landing’ and a collective sigh

of relief can be felt down the aisle.

We land to the news that not only have

we made up the time lost while waiting to

take off, but we are now actually early. It is

trumpeted as though we should be doing

cartwheels with joy and wanting to start

a family with our hero up front. But, of

course, there’s another snag.

Because we’re early, there’s another

aircraft on our stand, and we have to wait

for him to push back. Then the ground

crews are not ready for us, the air wing

isn’t aligned, and the coaches scheduled

to ship us back to the Terminal building

are nowhere in sight. When we do finally

disembark (‘Cabin crew doors to manual

and cross check’), we’re back to being

only a few minutes late again, and the

Captain is out of his cockpit, grinning like

a schoolboy whose Tuck Shop allowance

has just been increased, expecting a high

five for his efforts on our behalf.

Communication, we know, is

important, and it is better for the crew

to say something rather than leave us

guessing, but the speech is the same

speech, every time, regardless of airline.

Indeed, it is wholly unfair of me to single

out British Airways; they are still the best

IMHO (to be down with the kids). Every

airline does it. So, stop the pantomime

fellas; we’re on to you.

Sean Feast FCICM is getting grumpier.


Are you a Leader

or follower?

CICMQ accreditation is a proven model that has consistently delivered

dramatic improvements in cashflow and efficiency

CICMQ is the hallmark of industry leading organisations

The CICM Best Practice Network is where CICMQ accredited organisations

come together to develop, share and celebrate best practice in credit and

collections

Be a leader – Join the CICM Best Practice Network today

To find out more about flexible options to gain CICMQ accreditation

E: cicmq@cicm.com, T: 01780 722900


MEET THE PARTNERS

THEY'RE WAITING TO TALK TO YOU...

For further information and to discuss the opportunities of entering into a

Corporate Partnership with the CICM, contact Marketing on 01780 727273

Hays Credit Management is the award winning national specialist

division of Hays Recruitment, dedicated exclusively to the recruitment

of credit management professionals in the public and private

sectors. Whether you are looking to further your career in credit

management, strengthen your existing team, or would simply like an

overview of the market, it pays to speak to the market leaders.

www.hays.co.uk

HighRadius is the leading provider of Integrated

Receivables solutions for automating credit, collections,

cash allocation, deductions and eBilling operations.

The solutions are delivered as a software-as-a-service

(SaaS) or as SAP-certified Accelerators for SAP

Finance Receivables Management. With a track record

of reducing days sales outstanding (DSO), bad-debt

and increasing operational efficiency, HighRadius

solutions help teams achieve payback within a year.

www.highradius.com

We offer the most powerful comparable data

resource on private companies.

We capture and treat private company

information for better decision making and

increased efficiency, so we’re ideally suited to help

credit professionals.

Orbis, our global company database has

information on 250 million companies, and offers:

Standardised financials

Financial strength metrics

Extensive corporate structures

www.bvdinfo.com

Sanders Consulting is a niche consulting firm

specialising in improving Credit Management

Leadership & Performance for our clients.

We provide people and process focussed

pragmatic solutions, consultancy, strategy days and

performance improvement workshops and we

are proud to manage and develop the CICMQ

Programme and the Best Practice Network on

behalf of the CICM. For more information please

contact: enquiries @chrissandersconsulting.com.

www.chrissandersconsulting.com

Key IVR provide a suite of products to

assist companies across Europe with credit

management. The service gives the end-user

the means to make a payment when and

how they choose. Key IVR also provides a

state-of-the-art outbound platform delivering

automated messages by voice and SMS. In a

credit management environment, these services

are used to cost-effectively contact debtors and

connect them back into a contact centre or

automated payment line.

www.keyivr.co.uk

American Express is a globally recognised provider

of payment solutions to the business sector

offering flexible collection capabilities to meet

company cashflow objectives across a range of

industries. Whether you are looking to accelerate

cashflow, create a competitive advantage to drive

business or looking to support your customers

in their growth American Express can tailor a

solution to support your needs.

www.americanexpress.com

Credica are a UK based developer of specialist

Credit and Dispute Management software. We

have been successfully implementing our software

for over 15 years and have delivered significant

ROI for our diverse portfolio of customers. We

provide a highly configurable system which enables

our clients to gain complete control over their

debtors and to easily communicate disputes with

anyone in their organisation.

www.credica.co.uk

Moore Stephens is a top ten accounting and

advisory network. Our national creditor services

team has expert insights in debt recovery. This,

combined with unparalleled industry and sector

knowledge, enables our team to assist creditors in

recovering outstanding debts.

www.moorestephens.co.uk


Proud supporters

of CICMQ

With over 90 years’ experience, we have an

in-depth understanding of the importance of

maintaining customer relationships whilst efficiently

and effectively collecting monies owed, we deliver

when it comes to collecting outstanding debts.

Our Client focus is reflected in the customer

relationships. Structuring our service to meet your

specific needs, providing a collection strategy that

echoes your business character, trading patterns

and budget.

www.atradiuscollections.com/uk/

Graydon UK provides its clients with Credit

Risk Management and Intelligence information

on over 100 million entities across more than

190 countries. It provides economic, financial

and commercial insights that help its customers

make better decisions. Leading credit insurance

organisations, Atradius, Coface and Euler Hermes,

own Graydon. It offers its seamless service

through a worldwide network of offices and

partners.

www.graydon.co.uk

Rimilia provides intelligent, finance automation

solutions that enable customers to get paid

on time and control their cashflow and cash

collection in real time. Rimilia’s software solutions

use sophisticated analytics and artificial intelligence

to predict customer payment behaviour and

easily match and reconcile payments, removing

the uncertainty of cash collection. Rimilia’s

software automates the complete accounts

receivable process improving cash allocation, bank

reconciliation and credit management operations.

www.rimilia.com

DWF is a global legal business, transforming legal

services through our people for our clients. Led by

Managing Partner & CEO Andrew Leaitherland,

we have over 26 key locations and 2,800 people

delivering services and solutions that go beyond

expectations. DWF offers a full range of cost

effective debt recovery solutions including pre-legal

collections, debt litigation, enforcement, insolvency

proceedings and ancillary services including tracing,

process serving, debtor profiling and consultancy.

www.dwf.law/recover

Data Interconnect provides integrated e-billing

and collection solutions via its document delivery

web portal, WebSend. By providing improved

Customer Experience and Customer Satisfaction,

with enhanced levels of communication between

both parties, we can substantially speed up your

collection processes.

www.datainterconnect.com

Dun & Bradstreet grows the most valuable

relationships in business. Whether your customer

portfolio spans a city, a country or the globe, Dun

& Bradstreet delivers the data, analytics and insight

to grow your most profitable relationships and

obtain a global, unified view of your customer

relationships across credit and collections.

www.dnb.co.uk

Organisations around the world rely on Company

Watch’s industry-leading financial analytics to drive

their credit risk processes. Our financial risk

modelling and ability to map medium to long-term

risk as well as short-term credit risk set us apart

from other credit reference agencies. With our

unique H-Score® predicting almost 90 percent

of corporate insolvencies in advance, it is the risk

management tool of choice, providing actionable

intelligence in an uncertain world.

www.companywatch.net

Bottomline Technologies (NASDAQ: EPAY) helps

businesses pay and get paid. Businesses and banks

rely on Bottomline for domestic and international

payments, effective cash management tools,

automated workflows for payment processing

and bill review and state of the art fraud

detection, behavioural analytics and regulatory

compliance. Every day, we help our customers by

making complex business payments simple, secure

and seamless.

www.bottomline.com/uk

Tinubu Square is a trusted source of trade

credit intelligence for credit insurers and for

corporate customers. The company’s B2B

Credit Risk Intelligence solutions include the

Tinubu Risk Management Center, a cloud-based

SaaS platform; the Tinubu Credit Intelligence

service and the Tinubu Risk Analyst advisory

service. Over 250 companies rely on Tinubu

Square to protect their greatest assets: customer

receivables.

www.tinubu.com

The Recognised Standard


BRANCH NEWS

FOLLOWING feedback

received last year, the 2018

Turner Lecture broke with

tradition as it was held on

a Wednesday evening for

the first time in its 18-

year history. Once again, the intimate

surroundings of the Strand, Fleet and Bell

Suite at the Law Society, Chancery Lane,

was the venue and around 60 members

and guests were in attendance. In addition,

there was a welcome return for Robert

Turner, who was unable to attend the event

last year.

The format this year was an interactive

debate/question and answer session and

Richard Seadon, Kent Branch Committee

Member, introduced the session and acted

as moderator/time-keeper throughout.

Following a drinks reception at 17.30, the

delegates then filed into their seats and,

Turner Lecture

The Law Society

in turn, were duly captivated, cultivated

and even somewhat concerned by the

illustrations and presentations of the three

panellists/speakers.

First up was Richard Mawrey QC of

Henderson Chambers who gave a wry but

informative insight into the new Pre-Action

Protocols that were introduced in October

2017. The talk covered the processes

which now had to be adopted by creditors

pursuing money from individuals, and

highlighted the increased time involved as

well as potential pitfalls and scenarios that

could arise for creditors.

Ruth Duncan, immediate Past President

of the Insolvency Practitioners’ Association

(IPA) then took to the stage to explain what

her role involved, the current status of the

world of insolvency, and then discussed

the new rules affecting the Insolvency Act

1986.

The final slot was reserved for

Matthew Richardson, Barrister at Law

with Henderson Chambers, and worldacknowledged

expert in the field of

Cyber-Crime. Some of the statistics, losses

of money involved, and security breaches

covered by Matthew (all backed up with

real-life examples), certainly gave the

audience a jolt as to just how vulnerable

we all are to our personal data being

accessed.

A brief question and answer session

followed the talks before several of the

guests then adjourned for a delightful

dinner in an adjoining room at the Law

Society. Thanks again must go to Richard

for his efforts in making the event such a

success.

AUTHOR: Kevin Artlett FCICM

New CICM members

The Institute welcomes new members who have recently joined

ASSOCIATE

AFFILIATE

FELLOW

MEMBERS

Anna Maria

Apenit-Mitula

William Nelson

Kirsten Wachs

Daniel Carlton

Katherine Flowers

Matthew Gibson

Lucky Locord

Nelson Rea

Sue Wood

Andrew Birkwood

Sean Feast

Ben Archer

Wayne Damster

Parya Darabi

Philip Elliott

Joycelin Evans

Karen Herron

Massimo Lepri

Sharon Noland

Francine Pearlman

Matthew Radcliffe

Patrick Rawson

STUDYING MEMBERS

Qasam Ali

Carmel Austin

Olabanji Bamiduro

Simona Bengescu

John Buckley

James Burke

Ellie Cheetham-Blake

Joanne Clarke

Mitchel Cooper

Hannah Curtis

Gavin Duxbury

Michael Falzarano

Raffeina Feeney

Nick Glendening

Stuart Gray

Adele Gray

Yvette Grey

Janet Grimm

Lynsey Handley

Donna Hardy

Lianne Hare

Nigel Harris

Rebecca Harris

Michael Hashim

Jess Hill

Charlene Hughes

Emma Hynes

Olivia Ionescu

Francine Jackson

Kirsty Johnson

Eric Kezayo

Eloise Lawrence

Karen McManus

Demitra Michael

Christopher Milner

Christopher Moore

Nicola Newman

Jodie Pratt

Eoghan Rodgers

Edward Sagoe

Carla Scott

Gareth Short

Michael Shubh

Aurelija Sitvenkina

Michala Skuse

Julie Smith

Charlie Smith

George Smith

Karl Smith

Julie Somerville

Tammy Taylor

Annette Thornalley

Jodie Todd

Kelsey Toon

Cristina Turturean

Karolina Vacz Hosszu

Rosie Walker

Claire Watkins

Paul Willard

Chelsey Williecarr

Donna Wilson

Max Young


BRANCH NEWS

A Successful Re-Launch

North West Branch

EMIRATES Old Trafford was

the iconic venue for a highly

successful re-launch event

for the North West Branch.

Almost 60 delegates

were present to hear

presentations from Philip King, Chief

Executive, and Claire Bishop, Head of

Member Administration, who talked

about the CICM, its history, its work, its

future plans and the various study and

membership options available.

Executive Board member Victoria

Herd followed explaining why credit

management is vital to any business,

along with real-life examples of what can

go wrong when a company neglects best

practice. Victoria went on to describe

the characteristics that go into making

a good credit professional. Christopher

Hardman from Bureau Veritas gave an

amusing and well-received account of his

journey as a CICM Apprentice, drawing

on comparisons with ‘The most famous

apprentice of them all’, Luke Skywalker.

The presentations were rounded off

with a summary from Karen Young,

Director of Hays Credit Management, of

salary and recruitment trends in the credit

profession, with particular emphasis on

the North West Region.

After a round up from Branch Chair

Peter Gent, there was an opportunity

for a lively networking session, over an

excellent buffet provided by the staff at

Old Trafford.

The branch committee would like to

express its thanks to all who attended,

along with Hays for their support; our

presenters for their time and effort; and

the staff at Lancashire County Cricket Club

for their hospitality.

The committee are keen to maintain

the momentum the event has provided

and would like to receive feedback from

members in order to compile a calendar

of future events which will hopefully be as

strongly supported.

Author: David R Thornley FCICM MAAT

Full name:

Mark Clowes.

Current job title:

Credit Control Team Leader.

Current company name:

Hays Specialist Recruitment.

Number of years in credit management:

One and a half.

Number of years in current role: My current

role is my first in credit management.

How did you get into credit management?

I previously worked in payroll and really

enjoyed chasing overpayments we had made

to temporary workers. When a job in credit

control came up I applied and was successful

in getting the role.

What is the best thing about where you work?

I really enjoy the people I work with on a daily

basis. We are all like a little family.

What motivates you?

Career progression, doing my job to the best of

my ability and supporting my team.

What skill do you think has helped you most in

your credit career so far?

I would say my firm but fair approach. You

need to be able to empathise with clients but

at the same time ensure you get the result you

require.

Name three people you would invite to a dinner

party and why?

Donald Trump, Kim Jong-Un and Vladimir

Putin. Being involved in a private conversation

with the most powerful leaders in the world

would be interesting to say the least.

What is your favourite pastime/relaxation

activity?

I like to spend time with my children and

family, socialising with friends and going to

watch the football or boxing.

What is the best/worst quality in a leader?

The best quality is taking responsibility and

ownership for yours and your team’s actions.

The worst quality is to be disengaged and

unaware in what your team are doing

Who is your business or personal hero?

My personal hero is Aleksandar Mitrovic for

pretty much single handily getting Fulham FC

back into the Premier League.

What can't you live without?

I’d say food as I have to have at least three

meals a day.

60SECONDS

WITH

WE WANT

YOUR NEWS!

Get in touch with Andrew Morris by emailing

andrew.morris@cicm.com with your branch

news and event reports. Please only send up

to 400 words and any images need to be high

resolution to be printable, so 1MB plus.

What’s been your most rewarding moment in

your credit career?

When I have worked with a client by agreeing

a repayment plan and the client sticks to that

plan and pays off all of their outstanding debt.

On a personal level, it was being recognised by

my team in our circle of excellence reward and

recognition scheme.

What has surprised you the most about

working in credit?

How difficult it is to get invoices paid.

If you weren’t working in credit management,

what would you be doing?

When I was younger I aspired to be a TV

presenter so probably the next Ant or Dec.


TAKE CONTROL

OF YOUR CREDIT

CAREER

WORKING CAPITAL ASSISTANT

JOIN AN INTERNATIONAL LAW FIRM

London, up to £29,000

Due to a backlog of high volume invoices, this

international law firm is seeking an individual to assist

and make a difference through a 3-6 month fixed term

contract. With a strong focus on invoice amendments,

high volume processing and allocation of fees and

disbursements, this role will require billings experience

and good time management skills to meet deadlines.

You will be able to deal with enquiries and conduct

yourself professionally, ensuring you assist with the

running of a department. This is a fantastic opportunity

to enhance your CV and make a huge impact.

Ref: 3460483

Contact Megan Allen on 020 3465 0020

or email megan.allen@hays.com

ACCOUNTS RECEIVABLE ASSISTANT

MANAGE YOUR OWN PORTFOLIO

London, £25,000-£27,000

A well-established and successful media publishing

business is looking for an AR specialist to take full

ownership of the end-to-end Accounts Receivable

function. Managing an ever expanding portfolio of

international accounts, you will responsible for chasing

payment in a proactive manner, with the aim of improving

DSO. Experience dealing with international clients

and multi currencies is essential, and a track record of

implementing controls/processes would be advantageous.

In return, you will work in a modern and happy office

environment with a supportive and friendly team.

Ref: 3450829

Contact Julia Foster on 020 3465 0020

or email julia.foster2@hays.com

JUNIOR CREDIT CONTROLLER

GERMAN SPEAKING WITH

FINANCE EXPERIENCE

London, £28,000 + bonus

This fast-paced, modern and exciting recruitment

company is looking for a credit controller to join its

sociable team. In this role, you will chase the European

ledger and speak to multiple German clients, building

relationships with them. You will also be involved in

allocations and reconciliations with the management of

a £5million plus ledger. To be successful, you will have a

driven and hardworking attitude and be able to fit into

a fun and sociable team. Any finance background will be

suitable but fluency in German is essential.

Ref: 3448464

Contact Holly Parkes on 020 3465 0020

or email holly.parkes@hays.com

CREDIT CONTROLLER

BUILD STRONG RELATIONSHIPS

Coventry, up to £24,000

An excellent opportunity has arisen at a large retail

company for a credit controller with experience working

in a large complex commercial business handling debts of

£1 million upwards. With a strong emphasis on reviewing

credit worthiness, credit limits, risk categories and stops in

respect of existing accounts, this role focuses on building

relationships with large clients who hold high volume and

high value accounts, ensuring that queries are resolved

promptly. As a confident communicator, you will be able

to prioritise your own work and manage your own diary in

relation to chasing the debt.

Ref: 3460095

Contact Janice White on 024 7690 2024

or email janice.white@hays.com


MULTILINGUAL SENIOR

CREDIT CONTROLLER

MAKE AN IMPACT

Sheffield, £23,000 + benefits

This well-established, market leading company is looking

for a senior credit controller with linguistic capability to

join its finance team. Your duties will include ensuring

cash collection is achieved and payments obtained by

agreed terms through the maintenance and control of

the sales ledger across the entire EMEA region. Previous

credit control experience is essential and you will ideally

be a French or Italian speaker. To be successful, you will

have the ability to work towards and achieve deadlines,

work well as part of a team or on your own initiative,

possess good self-motivational and organisational skills

and excellent Excel skills. Ref: 3178916

Contact Daniel Cherry on 0114 273 8775

or email daniel.cherry@hays.com

SENIOR CREDIT CONTROLLER

MAKE AN IMPACT

Abingdon, £15-£20 per hour

An industry leading manufacturing company requires

a senior credit controller to join its finance team on

a full time temporary basis until February. Reporting

into the Financial Controller, you will be responsible for

maintaining upkeep of the complicated credit ledger

for specified territories, ensuring the company complies

with the group policies on risk management and aged

debt reporting. As an experienced credit controller, you

will have worked at a senior level, dealing with high debt

clients. You will receive a competitive hourly rate in line

with £30,000-40,000, with guaranteed work over the

Christmas period. Ref: 3465957

Contact Imtiaz Khandokar on 01865 727071

or email imtiaz.khandokar@hays.com

CREDIT CONTROLLERS

PROVIDE EXCELLENT

CUSTOMER SERVICE

Worksop, up to £22,000 + bonus

This national services company requires multiple credit

controllers for a central services office based in Worksop.

This is an excellent opportunity to work alongside a

large finance team and develop your experience as an

outstanding credit controller, working to KPI targets

to retrieve and minimise outstanding debt. You will be

driven and competent, keen to enhance your credit

skills and work for a well-known organisation where

progression opportunities are available for strong

performers. Natural progression into future roles will

likely be available if desired for high performers.

Ref: 3442016

Contact Arthur Blyth on 0114 273 8775

or email arthur.blyth@hays.com

REVENUE ASSISTANT

SUCCESS THROUGH EXPERTISE

London, up to £19 per hour (PAYE)

This company is a market-leading software developer and

is one of leading tech companies in London. Due to rapid

growth, this company now requires a revenue assistant

to come in and take ownership of the revenue. You will

be responsible for client billing, cash allocations and

bank reconciliations. To be successful, you will have high

volume invoice experience and be a motivated individual

who can take control of the entire function. The company

is located in modern offices with an open-plan breakout

area and multiple perks.

Ref: 3452877

Contact Nathan Cumine on 020 3465 0020

or email nathan.cumine@hays.com

This is just a small selection of the many

opportunities we have available for credit

professionals. To find out more email

hayscicm@hays.com or visit us online.

hays.co.uk/creditcontrol


CALENDAR

The rise and rise of

Peer-to-Peer alternative

finance. Page 13

The story behind the

collapse of Toys R Us.

Page 36



CM December 2017.indd 1 21/11/2017 13:41

Sean Feast comments

on the Bell Pottinger

saga. Page 4

Are CRAs doing

enough around bogus

accounts. Page 26

THE CICM MAGAZINE FOR

CONSUMER AND COMMERCIAL

CREDIT PROFESSIONALS

CM October 2017.indd 1 21/09/2017 13:47

MARCH 2018 £12.00

People Power

How self-serve is

supporting customer

engagement. Page 14

Taken On Trust

Sean Feast speaks to

Joanna Elson of the Money

Advice Trust. Page 22



Winners of the

CICM British

Credit Awards

2018

CM March 2018.indd 1 21/02/2018 13:56

How AI is challenging

our ethical code.

Page 17

The state of the credit

management nation.

Page 34



CM April 2018.indd 1 21/03/2018 11:10

Sean Feast talks to

the new CEO of Hoist

Finance. Page 13

How Bexley Council

is improving supplier

relationships. Page 16



CM June 2018.indd 1 21/05/2018 11:04

FORTHCOMING EVENTS

Full list of events can be found on our website: www.cicm.com/events

CICM EVENTS

1 December

CICM Sheffield and District Branch

SHEFFIELD

Tis The Season To Be Networking

Contact : (0114) 2518850 (239) / 0771 3367588

Paula Uttley

VENUE : Genting Casino, St Paul's Place, Arundel

Gate, Sheffield, S1 2PN

4 December

CICM North East Branch

NEWCASTLE UPON TYNE

Christmas Quiz

Contact : Email northeastbranch@cicm.com

by 29 November 2018.

Please look out for any further updates on

our Branch forthcoming events at http://

www.cicm.com/branches/north-east/ .We are

actively seeking people who are keen to find

out more about the CICM, and always welcome

non-members and members bringing a friend,

colleague or even their whole team!

VENUE : Old George Inn (upstairs bar)

Old George Yard (just off Bigg Market), Newcastle

upon Tyne, NE1 1EE.

5 December

CICM West Midlands Branch

BIRMINGHAM

German Market Winter Warmer

Contact : Kim Delaney-Bowen: 07581 160 521

VENUE : RSM Office, St Philips Point,

Birmingham, B2 5AF

30 January

CICM South Wales Branch

CARDIFF

Are The Robots Coming or Are They Here

Already? What will you do?

Contact : To reserve a place please email

southwalesbranch@cicm.com

Diana Keeling (07921) 492348

VENUE : Atradius, 3 Harbour Road, Cardiff, CF10

4WZ

OTHER EVENTS

6-7 December

Forums International – International

Telecoms Risk Forum (ITRF)

LONDON

Contact : For more information email

itrf@forumsinternational.co.uk

11 December

Experian Credit Forum – FMCG Ireland

DUBLIN

Contact : Please contact Brent.cumming@

experian.com on 07885 675 092 if you would like

further details.

11 December

Experian Credit Forum –

Oil & Fuelcard Ireland

DUBLIN

Contact : Please contact Brent.cumming@

experian.com on 07885 675 092 if you would like

further details.

12 December

Forums International – Export/International

Credit Forum (ECF/ICF)

LONDON

Contact : For more information email

ecf@forumsinternational.co.uk

VENUE : Moore Stephens, London

CM

The magazine for

consumer and

commercial credit

professionals

CM

CREDIT MANAGEMENT

DECEMBER 2017 £12.00

INSIDE

2018 DESKTOP

Face to Face

Sean Feast speaks

to Business Minister

Margot James

CM

CREDIT MANAGEMENT

OCTOBER 2017 £10.00

Life on the edge

Consumers caught

in the debt trap

CREDIT MANAGEMENT

Chain Reaction

The cost of being in

– and out – of debt

THE CICM'S HIGHLY ACCLAIMED MAGAZINE

INSIDE

CM

CREDIT MANAGEMENT

APRIL 2018 £12.00

Barrel Role

How the UK wine industry

is finding cash to grow

CM

CREDIT MANAGEMENT

JUNE 2018 £12.00

Winds of

change

Headwinds on

the path to

economic

improvement

SPECIAL

FEATURES

IN DEPTH

INTERVIEWS

ASK THE

EXPERTS

GLOBAL

NEWS

INTERNATIONAL

TRADE

CURRENCY

EXCHANGE

HR

MATTERS

MOBILE DIGITAL

EDITION

THE LEADING JOURNAL FOR CONSUMER AND COMMERCIAL CREDIT PROFESSIONALS

TO SUBSCRIBE CONTACT: T: 01780 722903 E: ANGELA.COOPER@CICM.COM

The Recognised Standard / www.cicm.com / July/August June 2018 / PAGE 2018 / 58 PAGE 58


CICM

KNOWLEDGE

HUB

Access over 1,000 credit

and collection resources

anytime, anywhere.

CICM Knowledge Hub is a new online platform for credit

professionals, providing one location to easily find the tools

and information you need to help you in your job.

‣ Tailored elearning courses ‣ CM Magazine articles

‣ Research papers from industry experts ‣ Webinars

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Cr£ditWho?

CICM Directory of Services

COLLECTIONS

COLLECTIONS LEGAL

CONSULTANCY

Atradius Collections Ltd

3 Harbour Drive,

Capital Waterside,

Cardiff Bay, Cardiff, CF10 4WZ

United Kingdom

T: +44 (0)2920 824700

W: www.atradiuscollections.com/uk/

Atradius Collections Ltd is an established specialist in business

to business collections. As the collections division of the Atradius

Crédito y Caución, we have a strong position sharing history,

knowledge and reputation.

Annually handling more than 110,000 cases and recovering over

a billion EUROs in collections at any one time, we deliver when

it comes to collecting outstanding debts. With over 90 years’

experience, we have an in-depth understanding of the importance of

maintaining customer relationships whilst efficiently and effectively

collecting monies owed.

The individual nature of our clients’ customer relationships is

reflected in the customer focus we provide, structuring our service

to meet your specific needs. We work closely with clients to provide

them with a collection strategy that echoes their business character,

trading patterns and budget.

For further information contact: Hans Meijer, UK and Ireland Country

Director (hans.meijer@atradius.com).

INTERNATIONAL COLLECTIONS

Premium Collections Limited

3 Caidan House, Canal Road

Timperley, Cheshire. WA14 1TD

T: +44 (0)161 962 4695

E: paul.daine@premiumcollections.co.uk

W: www.premiumcollections.co.uk

For all your credit management requirements Premium Collections

has the solution to suit you. Operating on a national and international

basis we can tailor a package of products and services to meet your

requirements.

Services include B2B collections, B2C collections, international

collections, absconder tracing, asset repossessions, status reporting

and litigation support.

Managed from our offices in Manchester, Harrogate and Dublin our

network of 55 partners cover the World.

Contact Paul Daine FCICM on +44 (0)161 962 4695 or

paul.daine@premiumcollections.co.uk

www.premiumcollections.co.uk

COLLECTIONS LEGAL

Blaser Mills Law

40 Oxford Road,

High Wycombe,

Buckinghamshire. HP11 2EE

T: 01494 478660/478661

E: Jackie Ray jar@blasermills.co.uk or

Gary Braathen gpb@blasermills.co.uk

W: www.blasermills.co.uk

A full-service firm, Blaser Mills Law’s experienced Commercial

Recoveries team offer pre-legal collections, debt recovery,

litigation, dispute resolution and insolvency. The team includes

CICM qualified staff, recommended in both Legal 500 and

Chambers & Partners legal directories.

Offices in High Wycombe, Amersham, Rickmansworth, London

and Silverstone

Lovetts Solicitors

Lovetts, Bramley House, The Guildway, Old Portsmouth

Road, Guildford, Surrey GU3 1LR

T: +44(0)1483 457500 E: info@lovetts.co.uk

W: www.lovetts.co.uk

Lovetts has been recovering debts for 30 years! When you

want the right expertise to recover overdue debts why not use a

specialist? Lovetts’ only line of business is the recovery of

business debts and any resulting commercial litigation.

We provide:

• Letters Before Action, prompting positive outcomes in more than 80

percent of cases • Overseas Pre-litigation collections with

multi-lingual capabilities • 24/7 access to our online debt

management system ‘CaseManager’

Don’t just take our word for it, here’s recent customer feedback:

“...All our service expectations have been exceeded...”

“...The online system is particularly useful and is extremely easy

to use... “...Lovetts has a recognisable brand that generates

successful results...”

STRIPES SOLICITORS LIMITED

St George’s House, 56 Peter Street, Manchester, M2 3NQ

W: www.stripes-solicitors.co.uk

T: 0161 832 5000

95percent success rate in disputed litigation

cases over several decades

Stripes technical excellence, tenacity and commercial insight has led

to this 95 percent success rate over several decades. We have been

particularly recommended as a leading law firm by the Legal 500 in

the litigious field for representing clients with significant and complex

issues.

Our specialist commercial debt recovery and insolvency team work

with businesses ranging from SMEs to larger PLCs recovering

business debts on a no cost or fixed fee basis and often

recovering debts within days. We aim to understand your business

and tailor our services to suit your requirements. Our online service

provides you with 24/7 access to manage your account, to upload

new debtor cases and to generate new legal instructions.

Yuill + Kyle

Capella, 60 York Street, Glasgow, G2 8JX, Scotland, UK

T: 0141 572 4251

E: scowan@yuill-kyle.co.uk

W: www.debtscotland.com

Do You Have Trouble Collecting Debts in

Scotland? We Don’t

Yuill + Kyle is one of Scotland’s leading debt recovery and credit

control law firms. With over 100 years of experience, we are

specialists in resolving disputed and undisputed debts. Our track

record for successful recoveries means you have just moved one step

closer to getting your money back.

How we can help you:

• Specialist advice for all of your legal matters

• A responsive and straightforward approach

• Providing you with solutions-driven advice

• Delivering cost certainty and value for money

Our services

• Pre-sue

• Fast track collections

• Judgement enforcement

• Insolvency

• Bankruptcy

• Liquidation

Sanders Consulting Associates Ltd

T: +44(0)1525 720226

E: enquiries@chrissandersconsulting.com

W: www.chrissandersconsulting.com

Sanders Consulting is an independent niche consulting firm

specialising in leadership and performance improvement in all aspects

of the order to cash process. Chris Sanders FCICM, the principal, is

well known in the industry with a wealth of experience in operational

credit management, billing, change and business process improvement.

A sought after speaker with cross industry international experience in

the business-to-business and business-to-consumer markets, his

innovative and enthusiastic approach delivers pragmatic people and

process lead solutions and significant working capital improvements to

clients. Sanders Consulting are proud to manage CICMQ on behalf of

and under the supervision of the CICM.

COURT ENFORCEMENT SERVICES

Court Enforcement Services

Wayne Whitford – Director

M: +44 (0)7834 748 183 T : +44 (0)1992 663 399

E : wayne@courtenforcementservices.co.uk

W: www.courtenforcementservices.co.uk

High Court Enforcement that will Empower You!

We help law firms and in-house debt recovery and legal teams to

enforce CCJs by transferring them up to the High Court. Setting us

apart in the industry, our unique and Award Winning Field Agent App

helps to provide information in real time and transparency, empowering

our clients when they work with us.

• Free Transfer up process of CCJ’s to High Court

• Exceptional Recovery Rates

• Individual Client Attention and Tailored Solutions

• Real Time Client Access to Cases

CREDIT INFORMATION

BUREAU VAN DIJK

Northburgh House, 10 Northburgh Street, London, EC1V 0PP

T: +44 (0)20 7549 5000E: bvd@bvdinfo.com

W: www.bvdinfo.com

We offer the most powerful comparable data resource on private

companies. We capture and treat private company information for

better decision making and increased efficiency, so we’re ideally suited

to help credit professionals. Orbis, our global company database has

information on 250 million companies, and offers:

• Standardised financials so you can assess companies globally

• Financial strength metrics using a range of models and including a

qualitative score for when detailed financials aren’t available

• Projected financials

• Extensive corporate structures so you can assess the complete group

– or take the financial stability of the parent into account

Credit Catalyst is a platform where you can combine information from

Orbis with you own knowledge of your customers and get dashboard

views of your portfolio.

Register for your free trial at bvdinfo.com.


FOR INFORMATION,

OPTIONS AND PRICING

PLEASE EMAIL:

grace@cabbell.co.uk

CREDIT INFORMATION

CREDIT INFORMATION

CREDIT MANAGEMENT SOFTWARE

Company Watch

Centurion House, 37 Jewry Street,

LONDON. EC3N 2ER

T: +44 (0)20 7043 3300

E: info@companywatch.net

W: www.companywatch.net

Organisations around the world rely on Company Watch’s industryleading

financial analytics to drive their credit risk processes. Our

financial risk modelling and ability to map medium to long-term risk as

well as short-term credit risk set us apart from other credit reference

agencies.

Quality and rigour run through everything we do, from our unique

method of assessing corporate financial health via our H-Score®, to

developing analytics on our customers’ in-house data.

With the H-Score® predicting almost 90 percent of corporate

insolvencies in advance, it is the risk management tool of choice,

providing actionable intelligence in an uncertain world.

Graydon UK

66 College Road, 2nd Floor, Hygeia Building, Harrow,

Middlesex, HA1 1BE

T: +44 (0)208 515 1400

E: customerservices@graydon.co.uk

W: www.graydon.co.uk

Graydon UK is a specialist in Credit Risk Management and Intelligence,

providing access to business information on over 100 million entities

across more than 190 countries. Its mission is to convert vast amounts

of data from diverse data sources into invaluable information. Based

on this, it generates economic, financial and commercial insights that

help its customers make better business decisions and ultimately

gain competitive advantage. Graydon is owned by Atradius, Coface

and Euler Hermes, Europe's leading credit insurance organisations. It

offers a comprehensive network of offices and partners worldwide to

ensure a seamless service.

Credica Ltd

Building 168, Maxell Avenue, Harwell Oxford, Oxon. OX11 0QT

T: 01235 856400E: info@credica.co.uk

W: www.credica.co.uk

Our highly configurable and extremely cost effective Collections and

Query Management System has been designed with 3 goals in mind:

• To improve your cashflow • To reduce your cost to collect

• To provide meaningful analysis of your business

Evolving over 15 years and driven by the input of 1000s of Credit

Professionals across the UK and Europe, our system is successfully

providing significant and measurable benefits for our diverse portfolio

of clients.

We would love to hear from you if you feel you would benefit from our

‘no nonsense’ and human approach to computer software.


CoCredo

Missenden Abbey, Great Missenden, Bucks, HP16 0BD

T: 01494 790600

E: customerservice@cocredo.com

W: www.cocredo.co.uk

CoCredo’s award winning credit reporting and monitoring systems have

helped to protect over £27 billion of turnover on behalf of our customers.

Our company data is updated continually throughout the day and access

to the online portal is available 365 days a year 24/7.

At CoCredo we aggregate data from a range of leading providers in

the UK and across the globe so that our customers can view the best

available data in an easy to read report. We offer customers XML

Integration and D.N.A Portfolio Management as well as an industry-first

Dual Report, comparing two leading providers opinions in one report.

Top Service Ltd

2&3 Regents Court, Farmoor Lane, Redditch,

Worcestershire, B98 0SD

T: 0152 750 3990.

E: enquiries@top-service.co.uk

W: www.top-service.co.uk

Top Service is the only credit reference and debt recovery

agency to specialise in the UK construction sector. Top Service

customers benefit from sector specific information, detailed

payment history intelligence and realtime trade references in

addition to standard credit information. There are currently

3,000 construction sector companies subscribing to the service,

ranging from multi-national organisations to small family firms.

The company prides itself on high levels of customer service

and does not tie its customers into restrictive contracts. Top

Service offers a 25 percent discount to all CICM Members as

well as four free credit checks of your choice.


Experian

The Sir John Peace Building

Experian Way

NG2 Business Park

Nottingham NG80 1ZZ

T: 0844 481 9920

W: www.experian.co.uk/business-information/

For over 30 years Experian have been processing, matching and deriving

insights to provide accurate, up-to-date information that helps B2B

organisations to make more effective, fact based decisions, reduce

risks and meet regulatory standards. We turn complex data into clear

insights that help manage UK and international businesses to maximise

opportunities for growth and identify and minimise the associated risks.

Blending our business and consumer data we can offer a truly blended

score for sole traders and enhanced scoring on SME’s to tell you more

about the business and the people behind the business. Experian can

support with new business, acquisition through to collections while

managing KYC requirements online or via our suite of APIs.

Innovation Software

Innovation Software, Innovation House,

New Road, Rochester, Kent, ME1 1BG.

T: +44 (0)1634 812300

E: jay.inamdar@innovationsoftware.uk.com

W: www.creditforceglobal.com

Innovation Software are the authors of CreditForce, the leading

Collections and Working Capital Management Systems. Our solutions are

used in over 26 countries and by over 20 percent of the Top 100 Global

Law Firms.

Our solutions have optimised Accounts Receivables processes for over

20 years and power Business Intelligence, with functionality to:

• improve cash flow • reduce DSO • control risk

• automate cash allocation • speed up query resolution

• improve customer relationship management

• automatically generate intelligent workflows and tasks

• manage the entire end-to-end collections cycle.

Fully integrated with over 40 leading ERP and Accounting systems,

including SAP, Oracle, Microsoft Dynamics and product partners with

Thomson Reuters Elite we can deliver on either your own computing

infrastructure or through Microsoft Azure’s award winning and secure

cloud service.CreditForce remains the choice solution for world class

businesses.

Book a demonstration by calling T: +44 (0)1634 812 300 or visit

www.creditforceglobal.com for more information.


STA International

3rd Floor, Colman House, King Street Maidstone , ME14 1DN

T: +44(0)844 324 0660.

E: enquiries@staonline.com

W: www.stainternational.com

GETTING BUSINESS PAID

STA is an award winning B2B and B2C debt collection, confidential

credit control and tracing supplier. ISO9001 quality accredited, and

with the CSAs Collector Accreditation Initiative, duty-of-care is as

important to us as it is to you. Specialising in international debt, in the

past 12 months we’ve collected from 146 countries worldwide. “Your

Debts Online” gives you transparent access to our collection success

and detailed management information, keeping you in control of your

account. We look forward to getting your business paid.

The Recognised Standard / www.cicm.com / December 2018 / PAGE 65 continues on page 66 >

Cr£ditWho?

CICM Directory of Services

FOR INFORMATION,

OPTIONS AND PRICING

PLEASE EMAIL:

grace@cabbell.co.uk


Tinubu Square UK

Holland House,

4 Bury Street, London .

EC3A 5AW

T: +44 (0)207 469 2577 /

E: uksales@tinubu.com

W: www.tinubu.com

Tinubu Square offers companies across the world the appropriate

SaaS platform solutions and services to significantly reduce their

exposure to risk, and their financial, operational and technical

costs. Easy to implement, our solutions provide an accurate

picture of a customers’ financial health through the entire

order-to-cash cycle, improve cash flow, and facilitate control

of risk across the organization whether group-wide or locally.

Founded in 2000, Tinubu Square is an award winning expert in

the trade credit insurance industry, with offices in Paris, London,

New York, Montreal and Singapore. Some of the largest multinational

corporations, credit insurers and receivables financing organizations

depend on Tinubu to provide them with the means to drive greater

trade credit risk efficiency.


Data Interconnect Ltd

Unit 7, Radcot Estate, 7 Park Rd, Faringdon,

Oxfordshire. SN7 7BP

T: +44 (0) 1367 245777 F: +44 (0) 1367 240011

E: sales@datainterconnect.co.uk

W: www.datainterconnect.com

Data Interconnect provides integrated e-billing and collection

solutions via its document delivery web portal, WebSend.

By providing improved Customer Experience and Customer

Satisfaction, with enhanced levels of communication between both

parties, we can substantially speed up your collection processes.

Proud supporters

of CICMQ

Rimilia

Corbett House, Westonhall Road, Bromsgrove, B60 4AL

T: +44 (0)1527 872123 E: enquiries@rimilia.com

W: www.rimilia.com

Operating globally across any sector, Rimilia provides intelligent,

finance automation solutions that enable customers to get paid on time

and control their cashflow and cash collection in real time. Rimilia’s

software solutions use sophisticated analytics and artificial intelligence

(AI) to predict customer payment behaviour and easily match and

reconcile payments, removing the uncertainty of cash collection. The

Rimilia software automates the complete accounts receivable process

and eliminates unallocated cash, reducing manual activity by an

average 70% and achieving best in class matching rates recognised

by industry specialists such as The Hackett Group.


DATA AND ANALYTICS

Dun & Bradstreet

Marlow International, Parkway Marlow

Buckinghamshire SL7 1AJ

Telephone: (0800) 001-234 Website: www.dnb.co.uk

Dun & Bradstreet grows the most valuable relationships in business.

By uncovering truth and meaning from data, we connect our

customers with the prospects, suppliers, clients and partners that

matter most, and have since 1841. Whether your customer portfolio

spans a city, a country or the globe, Dun & Bradstreet delivers the

data, analytics and insight to grow your most profitable relationships

and navigate credit risk. By combining your insights with our own,

Dun & Bradstreet facilitates a global, unified view of your customer

relationships across credit and collections.

FINANCIAL PR

Gravity London

Floor 6/7, Gravity London, 69 Wilson St, London, EC21 2BB

T: +44(0)207 330 8888. E: sfeast@gravitylondon.com

W: www.gravitylondon.com

Gravity is an award winning full service PR and advertising

business that is regularly benchmarked as being one of the best

in its field. It has a particular expertise in the credit sector, building

long-term relationships with some of the industry’s best-known

brands working on often challenging briefs. As the partner agency for

the Credit Services Association (CSA) for the past 13 years, and the

Chartered Institute of Credit Management since 2006, it understands

the key issues affecting the credit industry and what works and what

doesn’t in supporting its clients in the media and beyond.

INSOLVENCY

Moore Stephens

Moore Stephens LLP, 150 Aldersgate Street,

London EC1A 4AB

T: +44 (0) 20 7334 9191

E: Brendan.clarkson@moorestephens.com

W: www.moorestephens.co.uk

Moore Stephens is a top ten accounting and advisory network,

with offices throughout the UK. Our clients range from individuals

and entrepreneurs, through to large organisations and complex

international businesses. We partner with them, supporting their

aspirations and helping them to thrive in a challenging world.

Our national creditor services team has expert insights in debt

recovery which, combined with their unparalleled industry and

sector knowledge, enables them to assist creditors in recovering

outstanding debts.

LEGAL MATTERS

PAYMENT SOLUTIONS

American Express

76 Buckingham Palace Road,

London. SW1W 9TQ

T: +44 (0)1273 696933

W: www.americanexpress.com

American Express is working in partnership with the CICM and is

a globally recognised provider of payment solutions to businesses.

Specialising in providing flexible collection capabilities to drive a

number of company objectives including:

•Accelerate cashflow •Improved DSO •Reduce risk

•Offer extended terms to customers

•Provide an additional line of bank independent credit to drive

growth •Create competitive advantage with your customers

As experts in the field of payments and with a global reach,

American Express is working with credit managers to drive growth

within businesses of all sectors. By creating an additional lever

to help support supplier/client relationships American Express is

proud to be an innovator in the business payments space.

PAYMENT SOLUTIONS

Bottomline Technologies

115 Chatham Street, Reading

Berks RG1 7JX | UK

T: 0870 081 8250 E: emea-info@bottomline.com

W: www.bottomline.com/uk

Bottomline Technologies (NASDAQ: EPAY) helps businesses

pay and get paid. Businesses and banks rely on Bottomline for

domestic and international payments, effective cash management

tools, automated workflows for payment processing and bill

review and state of the art fraud detection, behavioural analytics

and regulatory compliance. Businesses around the world depend

on Bottomline solutions to help them pay and get paid, including

some of the world’s largest systemic banks, private and publicly

traded companies and Insurers. Every day, we help our customers

by making complex business payments simple, secure and seamless.

RECRUITMENT

PORTFOLIO

CREDIT CONTROL

Portfolio Credit Control

1 Finsbury Square, London. EC2A 1AE

T: 0207 650 3199

E: recruitment@portfoliocreditcontrol.com

W: www.portfoliocreditcontrol.com

Portfolio Credit Control, solely specialises in the recruitment of

permanent, temporary and contract Credit Control, Accounts

Receivable and Collections staff. Part of an award winning recruiter

we speak to and meet credit controllers all day everyday understanding

their skills and backgrounds to provide you with tried and tested credit

control professionals. We have achieved enormous growth because we

offer a uniquely specialist approach to our clients, with a commitment

to service delivery that exceeds your expectations every single time.

HighRadius

T: +44 7399 406889

E: gwyn.roberts@highradius.com

W: www.highradius.com

HighRadius is the leading provider of Integrated Receivables

solutions for automating receivables and payment functions such

as credit, collections, cash allocation, deductions and eBilling.

The Integrated Receivables suite is delivered as a software-as-aservice

(SaaS). HighRadius also offers SAP-certified Accelerators

for SAP S/4HANA Finance Receivables Management, enabling

large enterprises to maximize the value of their SAP investments.

HighRadius Integrated Receivables solutions have a proven track

record of reducing days sales outstanding (DSO), bad-debt and

increasing operation efficiency, enabling companies to achieve an

ROI in less than a year.

DWF LLP

David Scottow Senior Director

D +44 113 261 6169 M +44 7833 092628

E: David.Scottow@dwf.law W: www.dwf.law/recover

DWF is a global legal business, transforming legal services through

our people for our clients. Led by Managing Partner & CEO Andrew

Leaitherland, we have over 26 key locations and 2,800 people

delivering services and solutions that go beyond expectations. We

have received recognition for our work by The Financial Times who

named us as one of Europe's most innovative legal advisers, and we

have a range of stand-alone consultative services, technology and

products in addition to the traditional legal offering.

Hays Credit Management

107 Cheapside, London, EC2V 6DN

T: 07834 260029

E: karen.young@hays.com

W: www.hays.co.uk/creditcontrol

Hays Credit Management is working in partnership with the CICM

and specialise in placing experts into credit control jobs and credit

management jobs. Hays understands the demands of this challenging

environment and the skills required to thrive within it. Whatever

your needs, we have temporary, permanent and contract based

opportunities to find your ideal role. Our candidate registration process

is unrivalled, including face-to-face screening interviews and a credit

control skills test developed exclusively for Hays by the CICM. We offer

CICM members a priority service and can provide advice across a wide

spectrum of job search and recruitment issues.


FROM THE

ARCHIVE

Credit Management

magazine from 46 years ago.19

72

In November 1972 Republican Richard Nixon defeated Democrat

George McGovern in a landslide, although the election has

the lowest voter turnout since 1948 with only 55 percent of the

electorate voting. The last executions took place in Paris – the

President Georges Pompidou upheld both death sentences despite

public opinion. Atari released the arcade version of Pong which

became the first generation of video game to achieve commercial

success. In December 1972 Apollo 17 became the last manned

moon mission when the ‘Blue Marble’ picture of Earth was taken.

THE INSTITUTE’S

ANNUAL DINNER

Robert Head, Financial Correspondent

for the Daily Mirror entertained the

crowd at the Crypt of the Guildhall

as one of the guest speakers.

Chairman of Council, Owen Mayo

summarised the year’s progress with

representations to the Department

of Trade and Industry, and a meeting

with the Conservative Credit and

Insurance Trade Committee.

THE COMPUTER – AN AID TO CREDIT MANAGEMENT

Following the Annual Conference of the Institute of Credit Management at the Royal

Garden Hotel on 25 October 1972, AJ Thomas outlines where a computer could assist

credit managers perform tasks such as reviewing credit limits and debt collecting.


THE RECOGNISED

STANDARD

CICM British Credit Awards 2019

7 February 2019

Royal Lancaster, London

The shortlist has just been announced. Book your table today!

The entries are in... and the shortlist has just been

announced! To see who made the shortlist for the 2019

awards, please visit: www.cicmbritishcreditawards.com

Don’t miss this fantastic evening of networking and celebration

of all of the incredible achievements across the credit and

collections community. With a fabulous line up of entertainment,

it’s the one event in the credit calendar not to be missed!

The CICM British Credit Awards is central to our ethos, rewarding

outstanding achievement and innovation shown by individuals

and organisations.

BOOK YOUR TABLES TODAY

AND JOIN US ON THE NIGHT

WHERE ALL WINNERS WILL BE

REVEALED

cicmbritishcreditawards.com

Table bookings

Please contact Natasha Witter on:

T: 020 7484 9876

E: natasha.witter@incisivemedia.com

HEADLINE SPONSOR:

SPONSORS:

PALADIN

CM December DECEMBER 2018

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