Credit Management June 2019

More documents

Recommendations

Info

Auditors blamed for Carillion's collapse A survey of the supply chain conducted by public sector procurement specialists Scape Group has found that more than nine out of ten (93 percent) of suppliers think the relationship between Carillion and KPMG enabled the outsourcer’s true financial position to be concealed. Over half of suppliers polled think the accounting policies at Carillion were ‘not discharged in good faith’ and that the subsequent collapse was ‘facilitated by poor management.’ Some 64 percent of suppliers believe that Carillion’s downfall was due to ‘debt mismanagement, acquisitions and long payment terms, created by a focus on revenue rather than profit.’ The survey also claims the construction industry would ‘support a shake-up of the ‘big four’ accounting firms, with 57 percent of suppliers polled saying they thought this was required.’ The devastating collapse of Carillion in 2018 put thousands of jobs and the supply chain at risk, led to substantial financial losses, and brought into question the model of public outsourcing. Mark Robinson, Scape Chief Executive, says its research suggests that mismanagement, rising debt and the active concealing of the true extent of Carillion’s debt were to blame, not the outsourcing model itself: “We need to be able to have faith in company accounts and the work auditors are carrying out, especially when public sector contracts and people’s livelihoods are at risk. “We found that the supply chain were not comfortable with the relationship between Carillion and KPMG, and that a reform of the ‘big four’ auditing firms would bring comfort to the construction industry that failures like this will not be repeated. Greater oversight and closer management of auditing practices are needed to rebuild trust in the industry, but we also need to make sure we are putting in place sensible reforms that do not put increased cost pressures on an industry that is already contending with the cost of materials and reduced access to labour. “Given that SMEs are the lifeblood of the economy, the sustained growth and prosperity of local businesses should be a key priority for the public sector.” Elsewhere, a survey of 11,000 people in 11 countries around the world by the Association of Chartered Certified Accountants (ACCA) suggests that auditors should be doing more to prevent company failures. More than half of those questioned also believe auditors are responsible for avoiding company failures. scapegroup.co.uk >NEWS IN BRIEF Vulnerability requires constant focus THE Money Advice Trust has welcomed the Treasury Select Committee’s wide-ranging report into consumers’ access to financial services. Joanna Elson OBE, Chief Executive of the Money Advice Trust says it is particularly pleased to see the Treasury Select Committee’s strong support for the vulnerability agenda: “This includes recommending that the FCA sets clear expectations for firms in its forthcoming guidance, and highlighting the central importance of training for financial services staff. “As the report notes, demand for the Money Advice Trust’s vulnerability training is increasing significantly – and we have now worked with more than 220 creditors to train more than 19,000 staff. “However, the Committee is right to highlight that progress has not been uniform – and as our collective understanding of vulnerability improves, this is an issue that requires a constant focus from firms of all sizes. "The FCA's forthcoming guidance is a good opportunity to renew momentum on vulnerability across the industry. We look forward to working with the FCA and with firms to continue to improve in this crucial area." moneyadvicetrust.org Brits live beyond their means MORE than a quarter (28 percent) of British adults ran a ‘deficit budget’ in the past month, spending more during the month than they received in income, according to new research from R3. One in six British adults (17 percent) spent up to £100 more than they received in income over the past month; seven percent spent between £100 to £300 more; and three percent spent over £300 more. R3’s research follows statistics from the ONS which show that households have been in a budget deficit for a record nine consecutive quarters (Oct 2016-Dec 2018), while the average UK household spent £900 more than it received in income in 2017. Nearly a quarter (22 percent) of respondents to R3’s research said they do not have any savings at all at the moment, showing that levels of financial resilience are low for many people. Those aged 25-34 years were likeliest of all age groups to report spending more than they received in monthly income (43 percent). By contrast, the corresponding figure for those 65+ was only 12 percent. People’s housing situation also made a difference: A third of renters (35 percent) said in the past month they spent more than they received in monthly income, compared to a quarter of homeowners (24 percent). Renters (24 percent) were more likely than homeowners (14 percent) to have overspent by up to £100 in the last month. For amounts between £100 to £300 (eight percent of renters v six percent of homeowners) and over £300 (renters three percent versus homeowners four percent), respondents’ housing situation made relatively little difference. The research found that seven percent of British adults reported that they have borrowed £100 or more from family or friends in the last month. r3.org.uk The Recognised Standard / www.cicm.com / June 2019 / PAGE 12
NEWS IN BRIEF “Given that SMEs are the lifeblood of the economy, the sustained growth and prosperity of local businesses should be a key priority for the public sector.” Stephen Allinson MCICM joins Apex APEX Litigation Finance has appointed Stephen Allinson MCICM, Chairman of the Board of The Insolvency Service, as a company adviser and to sit on its investment committee. Stephen is a Solicitor and Licensed Insolvency Practitioner, and has specialised in credit, debt and insolvency work since 1987. Stephen was appointed Chairman of the Board of The Insolvency Service in January 2017 and is also the Chairman of the Joint Insolvency Examination Board (JIEB), the Deputy Independent Examiner for the Institute and Faculty of Actuaries and a Visiting Lecturer on business and commercial law at the University of Law. In addition, he serves as a member of both the Chartered Institute of Legal Executives Qualifications Committee and the Legal and Technical Committee of the Civil Court Users Association, and as a Director of The Money Charity. Apex Litigation Finance, which launched in April 2019, will work with leading law firms, insolvency practitioners and corporates to fund small to medium sized claims. Apex has partnered with legal AI specialist CourtQuant which provides risk assessment tools to analyse probable litigation outcomes. Stephen Allinson says litigation funding has a crucial role to play in the development of the insolvency profession: “I am thrilled to work with committed and innovative colleagues at Apex as we seek to bring a new approach to this fast-moving area for the benefit of both practitioners and creditors.” apexlitigation.com Numbers up ACCORDING to the National Numeracy Day campaign, around half the UK’s adults have poor numeracy skills, yet evidence suggests becoming a ‘numbers person’ can help save money and make money – and it’s ‘never too late to learn’. StepChange Debt Charity says it is contacted by over 2,000 new clients a day, implying that around 1,000 people every day could benefit from numeracy skills to help them as they seek to manage their debt problems. Low levels of numeracy skills are estimated to cost the UK economy over £20 billion a year. stepchange.org Strong arm JCB’s finance arm has revealed that total lending to help hirers and contractors buy machines has hit an all-time high. As demand soars for new plant total lending has broken through the £1 billion barrier. JCB Finance says it has facilitated the purchase of more than 250,000 machines over the past 49 years, lending more than £13 billion to UK businesses to help them grow and invest. jcb-finance.co.uk Bridge programmes CROWD2FUND has been named as one of 10 UK firms to benefit from two new fintech bridge programmes with Hong Kong and Australia. The Department for International Trade (DIT) and the Treasury said that the pilot programmes will help to bolster existing frameworks and build on previous fintech bridge agreements signed with China, Singapore and South Korea. The programmes will involve collaboration between the various governments and their regulatory bodies, as part of their remit to improve trade and innovation across borders. According to the DTI, Australia and Hong Kong have almost 1,000 active fintech companies between them. crowd2fund.com Boom time for bars THE hot Easter weekend delivered starkly different outcomes for Britain’s managed pub and restaurant groups, according to latest figures from the Coffer Peach Business Tracker. While pub sales surged in the sunshine, restaurants struggled in the heat. Pub and bar chains reported collective like-for-like sales up 5.3 percent for the fourday break compared to Easter 2018, with drink-led pubs up 10.9 percent as the public headed outdoors. However, the overall eating and drinkingout market was actually down 3.6 percent over the four-day weekend, as in stark contrast to pubs restaurant chains saw collective like-for-like sales tumble a massive 18.6 per cent against last Easter’s trading. Regionally, London saw a fall in like-forlike trading, down 0.7 percent on last April, while outside the M25 was up 1.7 percent on a like-for-like basis for the month. cga.co.uk The Recognised Standard / www.cicm.com / June 2019 / PAGE 13
Page 1 and 2: CREDIT MANAGEMENT CM JUNE 2019 £12
Page 3 and 4: 23 15 VIEW FROM THE SEA FRONT DAVID
Page 5 and 6: We provide companies around the glo
Page 7 and 8: THE NOT-SO DIRTY DOZEN Twelve busin
Page 9 and 10: SMEs get the cold shoulder A report
Page 11: We’ve updated our comments. Tap h
Page 15 and 16: INSOLVENCY Keeping the balance The
Page 17 and 18: presents
Page 19 and 20: DO YOUKNOWTHE TRUE IDENTITY OF YOUR
Page 21 and 22: OPINION AUTHOR - Tim Vine (42 perce
Page 23 and 24: VIEW FROM THE SEA FRONT AUTHOR - Da
Page 25 and 26: OPINION AUTHOR - Julian Winfield Mo
Page 27 and 28: TRADE TALK Export Controls The vita
Page 29 and 30: INDIAN elections could trim Narendr
Page 31 and 32: OPINION AUTHOR - Jamie Ashford Jami
Page 33 and 34: ADVERTORIAL ‘I never received the
Page 35 and 36: AWARD WINNERS WINNING TICKET Credit
Page 37 and 38: Redefining order-to-cash Onguard is
Page 39 and 40: PAYMENT TRENDS Top Five Prompter Pa
Page 41 and 42: LEGAL MATTERS AUTHOR - Peter Walker
Page 43 and 44: Each of our Corporate Partners is c
Page 45 and 46: CASE STUDY Table Turning Following
Page 47 and 48: Tailored and bespoke training for y
Page 49 and 50: CICM KNOWLEDGE HUB Access over 1,00
Page 51 and 52: ANNUAL GENERAL MEETING The fifth An
Page 53 and 54: REVIEW Technically speaking Credit
Page 55 and 56: www.cicm.com ‘‘ If you are seri
Page 57 and 58: As the Winners of the Legal Team of
Page 59 and 60: BRANCH NEWS 60SECONDS WITH FULL NAM
Page 61 and 62: PROFESSIONAL SERVICES CREDIT CONTRO
Page 63 and 64:
3 YEARS IN 2018 Credit Controller A
Page 65 and 66:
FOR INFORMATION, OPTIONS AND PRICIN
Page 67 and 68:
FROM THE ARCHIVE Credit Management
show all

Credit Management June 2019

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?