CM December 2020

credit

The CICM magazine for consumer and commercial credit professionals

CREDIT MANAGEMENT

CM

DECEMBER 2020 £12.50

THE CICM MAGAZINE FOR CONSUMER AND

COMMERCIAL CREDIT PROFESSIONALS

Activist

Investors

Who’s really pulling

the strings?

The hidden risk of

Personal Guarantees.

Page 21

Tackling a surge in

vulnerable customers.

Page 32


24

Nodding Acquaintances

Adam Bernstein

DECEMBER 2020

www.cicm.com

CONTENTS

32

Softly Softly

David Sheridan FCICM

21

Stacking the odds

Sean Feast FCICM

9 – Zoom Zoom

The CEO’s Christmas message.

10 – Bare Essentials

Julia Ishak details the new rules

protecting supplies to an insolvent

customer.

12 – Threatening Behaviour

Activist investors, and pressure from

consumer groups, constitute a serious

threat.

19 – A Question of Honour

New proposals suggest IPs cannot be

trusted.

21 – Stacking the Odds

Lenders are open to the risk of

fraudulent use of multiple Personal

Guarantees

10

Bare essentials

Julia Ishak

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.

12

Threatening Behaviour

Adam Bernstein

President Stephen Baister FCICM / Chief Executive Sue Chapple FCICM

Executive Board: Chair Debbie Nolan FCICM(Grad) – Vice Chair Phil Rice FCICM /Treasurer Glen Bullivant FCICM

Larry Coltman FCICM / Victoria Herd FCICM(Grad) / Philip Holbrough MCICM

Advisory Council: Sarah Aldridge FCICM / Laurie Beagle FCICM / Glen Bullivant FCICM / Alan Church FCICM(Grad)

Brendan Clarkson FCICM / Larry Coltman FCICM / Niall Cooter FCICM / Peter Gent FCICM(Grad) / Victoria Herd FCICM(Grad)

Philip Holbrough MCICM / Neil Jinks FCICM / Nick King FCICM / Charles Mayhew FCICM / Debbie Nolan FCICM(Grad)

Bryony Pettifor FCICM(Grad)/ Allan Poole MCICM / Alice Purdy MCICM(Grad) / Matthew Roberts MCICM / Phil Rice FCICM

Chris Sanders FCICM / Stephen Thomson FCICM / Atul Vadher FCICM(Grad)

24 – Nodding Acquaintances

Bulgaria is a country of contradictions,

and when a Bulgarian nods he means

no.

32 – Softly Softly

How will DCA’s support a surge in

vulnerability?

34 – Staying the Course

What next for the world of

enforcement?

44 – Panel Bashers

Are zero bad debts a mark of success or

a missed opportunity?

Publisher

Chartered Institute of Credit Management

The Water Mill, Station Road, South Luffenham

OAKHAM, LE15 8NB

Telephone: 01780 722900

Email: editorial@cicm.com

Website: www.cicm.com

CMM: www.creditmanagement.org.uk

Managing Editor

Sean Feast FCICM

Deputy Editor

Iona Yadallee

Art Editor

Andrew Morris

Telephone: 01780 722910

Email: andrew.morris@cicm.com

Editorial Team

Laura Biondi, Imogen Hart, Rob Howard

and Max Tyson

Advertising

Grace Ghattas

Telephone: 020 3603 7946

Email: grace@cabbell.co.uk

Printers

Stephens & George Print Group

2020 subscriptions

UK: £112 per annum

International: £145 per annum

Single copies: £12.50

ISSN 0265-2099

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 3


EDITOR’S COLUMN

Stop the world,

I want to get off

Sean Feast FCICM

Managing Editor

CHRISTMAS is coming, and if

we get any more lockdowns,

it won’t just be the goose

who’s getting fat.

Sitting here at home,

staring at my keyboard,

distracted by the pencil prints of Lancasters

and Hurricanes that adorn my study

wall, I am wondering what to write. Not

because there isn’t anything to say. Quite

the opposite. So much has happened over

the last 12 months that I simply don’t know

where to begin.

I could, perhaps, write about the seismic

changes that have been happening in

the world of debt collection, and the

acknowledgment from 50 MPs and now

all of the major debt advice charities of

something that we’ve known all along: that

many debt collection practices within the

public sector and central government are

shocking, and completely out of kilter with

their private sector colleagues. The quicker

they learn what best practice looks like, the

better.

I could write about BBLs and CBILs,

and the stories I’m already hearing of

irresponsible directors taking out loans

and spending the cash on a new fast car

or faster motorbike, with no intention

whatsoever of ever paying those loans back.

A day of reckoning is coming, and when it

comes it’s going to be a train smash, if that’s

not mixing my metaphors too much.

I could write about the fantastic efforts

of credit managers across the country,

adapting quickly and (largely) without

complaint to new ways of remote working,

and the pressures placed upon them by

their peers to keep collecting the cash. But

then you know that, because you’re the

guys who are doing it, so I don’t need to tell

you how great you are.

I could also write about the similarly

commendable efforts of the CICM HQ team

in devising new and ever-more imaginative

initiatives to support you, the members,

with webinars and virtual training, and

increasing the opportunities to share best

practice through the CICM Think Tank and

the revitalised and reinvigorated Technical

Committee.

I might also, if I am allowed a brief

moment of navel gazing, write about

how we have developed your magazine,

both creatively and editorially, and the

many exclusives we’ve broken over the

year. Indeed we’ve done so again with our

story on Personal Guarantees (see page

21), exposing stories often months before

they finally make it into the pages of the

Nationals.

So as it’s Christmas, I would like a shout

out to the CM team – to Iona, my erstwhile

Deputy, who works diligently and earnestly

to sweep up behind me – and Andrew

whose brilliant designs are an inspiration,

and to our fabulous team of regular

contributors – David, Peter, Andrea, Adam,

Rob, Jason, Gareth, Karen, Derek, Nigel,

Matt and Mark, and the legend that is Les

Clisby who I’ve worked with now for almost

40 years. The magazine is a team effort, and

Laura, Jo, Max and Imogen also play their

part and whose efforts go largely unnoticed

– unless something goes wrong.

It’s been a year of highs and lows. And

that’s an understatement. There are

occasions when I’ve wanted the world to

stop, so I could jump off. But I live in the

hope that next year will be better, and that

my idea for a regular series of write ups of

RAF bases across the UK will finally get the

nod from the CICM editorial panel! Philip

never allowed it; but the CICM is under

new management so you never know.

Happy Christmas everyone.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 4


FCICM

CMNEWS

A round-up of news stories from the

world of consumer and commercial credit.

Written by – Sean Feast FCICM

DCA highlights rising

levels of collector abuse

THE amount of abuse being taken

by employees of debt collection

agencies is on the rise and

causing serious concern, Credit

Management has learned.

David Sheridan, Operations

Director at ARC Europe, writing in this issue, says

that customer facing agents are doing a great job

in incredibly difficult circumstances: “We know

emotions are running high particularly with the

constraints and frustrations people are having to

live with, but that’s no excuse for agents to be on

the receiving end of sometimes shocking verbal

abuse from customers,” he says.

“Given that many agents are now working from

home, children in the background or indeed with

parents or other loved ones, this is very tough to

deal with.”

David believes that by caring for each other

and being respectful in our interactions we will

help each other get through it: “I know that our

agents are really passionate about helping people

and take pride in doing that,” he continues. “So to

see the rising levels of verbal abuse when we are

trying to help, therefore, is disappointing.”

He believes part of the problem is the media

perception that rising levels of debt means it’s a

boom time for DCAs, a myth he is determined to

dispel: “It is certainly is not boom time for DCAs.

Probably the opposite; it’s a very tough trading

outlook.

“While we are facing tough times and many

people will struggle financially in the months

ahead, customers can be confident that if they

are contacted by firms like ourselves, DCA’s who

are members of the CSA, that they will be treated

fairly and given the support they need to deal

with their situation.”

See article on page 32.

David Sheridan FCICM,

Operations Director

at ARC Europe

“Given that many

agents are now

working from

home, children in

the background or

indeed with parents

or other loved ones,

this is very tough to

deal with.”

CSA launches new ‘steps’ to managing debt

THE Credit Services Association (CSA),

the voice of the debt collection and debt

purchase sector, has launched a new video

to promote Five Steps that people can take

if they’ve fallen into debt.

Building on its previous #heretohelp

campaign, the video explains the

importance of engaging with those a

customer owes money to and urges them

to be as open and honest as they can in

discussing their situation. Once a debt

has been passed to a CSA member, again

the message is one of communication

and engagement, and the importance of

not ignoring the attempts of contact. Debt

collection agency staff speak to thousands

of people in debt every day, and the

video explains how it’s their role to find a

realistic and affordable way for people to

get out of debt.

Voiced by Brad Burton, one of the

UK’s top motivational speakers, who

was himself once £25,000 in debt, the

animated video is designed to give

people the confidence to engage with

“Debt is one of those topics

that can often be ‘off limits’,

and it can be hard to talk

about. But we want to reassure

people that debt collection

agencies – our members – are

there to help them along the

road to becoming debt free.’’

a debt collection company from the

outset. It also stresses the help that

these companies can provide in steering

customers to further help and advice if

they need it.

Chris Leslie, CSA Chief Executive,

says that talking more openly about

money is the first step to removing

the stigma of debt and dealing with

it: “Debt is one of those topics that

can often be ‘off limits’, and

it can be hard to talk about.

But we want to reassure

people that debt collection agencies – our

members – are there to help them along

the road to becoming debt free. They have

a genuine desire to help their customer,

and it is their job to find an affordable

and realistic way of freeing people of

their debt. We also know that, according

to Money and Pensions Service (MaPS),

despite the COVID-19 crisis affecting our

finances, nine in 10 UK adults – 47 million

people – don’t find it any easier to talk

about money, or don’t even discuss it at

all. So we hope our new video, and all the

awareness raising efforts for Talk Money

Week will help to get people talking more

about money and debt.”

The launch of the new video

coincided with Talk Money Week, an

annual awareness campaign run by

the Money and Pensions Service to

encourage everyone to open up about

their money and pensions. You can

view this on the CSA website.

Chris Leslie, CSA

Chief Executive.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 5


NEWS ROUNDUP

Experian gives credit

scores a ‘boost’

EXPERIAN has launched what

it claims to be the UK’s first

service to give consumers the

ability to instantly improve

their credit score, using

information such as regular

video and music streaming payments and

council tax payments.

Early analysis suggests over half of

people (51 percent) using Experian Boost

will receive an instant increase to their

Experian Credit Score, meaning around 17

million consumers are set to benefit. Among

this group, more than one in 10 (12 percent)

will move up an entire Experian score band.

The new, free service will help people to

take control of their Experian Credit Score

by voluntarily adding new relevant and

real-time information via Open Banking.

This includes general information, such as

total incomings and outgoings, as well as

a range of popular, regular payments not

traditionally factored into credit scores.

At launch, Experian Boost will take

into account regular payments regarding

Council tax, savings and investments, and

Digital entertainment services such as

Netflix, Spotify and Amazon Prime. The

maximum amount people can boost their

score by is 66 points, and the agency says

that no-one will see their Experian Credit

Score go down as a result of signing up to

Experian Boost.

Experts at Experian say that Open

Banking transactional data has never

been factored into credit scores before.

By including it, Experian Boost ensures

that the Experian Credit Score recognises

and rewards people for making regular

payments to a broader range of

organisations, helping credit reporting

to evolve and improving lenders’ credit

assessments.

Clive Lawson, Managing Director for

Consumer Services at Experian, says the

business wants people to get credit where

credit is due: “We are always pushing

the boundaries of innovation for two key

reasons – to give consumers more control

over their financial lives, and to ensure

lenders have the information they need

to make informed, responsible decisions.

There’s never been a more important time

for people to engage with their credit scores

and Experian Boost will help them to do

this.”

Personal finance expert from

MoneyComms, Andrew Hagger, believes

many customers will welcome the

opportunity to boost their credit score in

the current difficult financial climate: “The

Experian Boost service is an excellent

example of how open banking can deliver

tangible rewards for consumers. The

potential financial benefits of this new

initiative could see some customers having

access to more favourable interest rate

terms and improved credit limits.”

Pearson Education becomes first

to achieve CICMQ re-accreditation

THE Credit Department at Pearson

Education has been recognised by CICMQ,

becoming the first company to achieve

re-accreditation online due to the COVID-19

pandemic.

Matthew Walters, Head of Credit at

Pearson Education, says achieving reaccreditation

shows that the company

promotes best practice: “Achieving CICMQ

re-accreditation motivates staff as it has

a direct impact on team improvement

and also helps us map our policies and

procedures against the industry standard

and gives us comfort that our documents

are sound.

“Due to the lockdown, we had to complete

the assessment fully online using hangouts

and other tools, which meant the process

wasn’t simple,” Matthew explains. “With our

teams based across England, Ireland and

India, sometimes connectivity issues meant

that some of our virtual meetings didn’t

go as planned. However, at the same time,

using these hangouts was a great way to get

everybody involved.”

Matthew also highlights that gaining the

re-accreditation in such an uncertain time

has taught the team at Pearson Education

the importance of keeping practices

and procedures up to date: “Gaining reaccreditation

highlights that improving

our processes continually is something we

consistently embrace,” he continues.

“We review the credit management

policies and procedures annually and due

to the current situation, it was important to

take the time to re-visit our roadmaps and

our processes to make sure we are working

as efficiently as possible in what I call ‘the

new world’.

Pearson Education is one of the largest

educational companies in the world, with

more than 36,000 employees worldwide. Its

UK Credit team consists of more than 50

members of staff, working across England,

Ireland and India. The teams are responsible

for collections of around £350 million –

£400 million per year.

>NEWS

IN BRIEF

Insurers brace for

spike in claims

CREDIT insurers are bracing

themselves for a spike in claims

once the Government’s business aid

packages come to an end.

The CICM Technical Committee

heard in November that whilst claims

significantly increased in the first few

months of the pandemic, they have

since tailed off as the various forms

of Government support came into

effect. Indeed, one of the Committee

members reported that claims are

currently at their lowest point for 20

years.

Credit insurance is a crucial part of

the British economy, providing cover

for businesses whose customers

are unable to pay their debts due to

insolvency. Given that the UK has

this year seen its worst recession

on record, according to the Office for

National Statistics, the Government

was forced to support the credit

insurance industry to prevent a

repeat of 2008 when insurers were

accused of abandoning customers in

their hour of need.

A £10bn scheme shares the risk

of insolvency between trade credit

insurers and the Treasury.

The CICM is seeking

a new home

THE CICM has engaged the services

of a commercial property agent to find

it a new home, and put The Water Mill

up for sale.

Sue Chapple FCICM, Chief

Executive of the CICM, says the agent

has been briefed to find a modern

headquarters, in much the same area,

more in keeping with a professional

membership body: “The Water Mill

has served us well for more that two

decades but as an historic building,

parts of which are Listed, it has its

challenges and is expensive to run.

It also doesn’t allow us to shape the

offices how we know we need them to

be in the future.

“By realising the value of the asset

now we can invest in new premises

with an open plan working

environment designed to

our own specification,

that will further improve

communication between the

teams and support an

even better service for

our members.”

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 6


NEWS ROUNDUP

Banks rank protecting their

reputation above price

AS UK banks consider

the appointment of debt

collectors to recover tens

of billions of pounds of

government-backed small

business loans, and other

financial institutions across Europe are

faced with a similar challenge, their next

move will be driven by on one overriding

factor: protecting their image.

A survey of 28 European banks conducted

by Hoist Finance, which purchases and

manages non-performing and performing

loans across 11 countries in Europe, found

that almost nine out of ten (86 percent)

ranked ‘protecting our reputation and

image’ as the single most important factor

in selecting a debt collection agency to

tender for their business.

The reputation of the agency itself and

their standing in the market was also

critical (ranked important by 71 percent

of respondents), far outstripping any

previous costs or bids that might have

been quoted for their service (18 percent).

Whether there is an existing relationship

between the two entities is not a key

determining factor.

When it came to the final decision

making, protecting their reputation was

still more important than price: 85 percent

citing it as ‘fairly’ or ‘very’ important (the

two top rankings), though the importance

of price leapt to 81 percent (for the same

two rankings combined). The agency’s

experience was also vital (62 percent).

Banks assessed a debt collection agency’s

ability to protect their reputation on their

approach to treating customers fairly. An

amicable collection strategy – in which an

agency arrives at a consensual agreement

with the customer – was deemed very

important by 38 percent of respondents,

though perhaps surprisingly of least

importance or only somewhat important by

a similar percentage (42 percent).

In terms of sustainability, respect for a

customer’s privacy was ranked highest in

priority (17 percent) followed by empathetic

treatment of customers (15 percent) and

having a thorough complaints handling

process (15 percent).

Julian Winfield, Chief Executive of Hoist

Finance UK, says that to the banks, getting

paid for the portfolio they are selling or

putting out for collection is obviously

important: “Clearly they would like to

recover some of their outstanding loans,”

he says, “but it’s clear also that price is far

from the only consideration. Banks are

worried about their image and how they will

be perceived in the market by existing or

potential customers.”

However, Julian says it’s not just about

image: “It’s also clear that they genuinely

care about the treatment of their customers,

even after they sell the claims to a

collection agency. It is vital, therefore, that

we, as an industry, continue to balance the

need of an economy that relies on a creditor

being repaid with the need to identify the

most vulnerable in society and ensure our

practices support them in resolving their

financial difficulties.”

Debt solutions business identifies

hidden risk of PGs

PERSONAL Guarantees (PGs) are being used

fraudulently by small business owners to

take out multiple loans without any chance

of those loans ever being paid back. And

it seems that Credit Reference Agencies

(CRAs) who have been made aware of the

practice and could solve the problem simply

by creating a new PG database are so far

failing to act.

The news comes after a review of loans

agreed by several different lenders –

including Liberis and Newable Lending

– which have since defaulted and are now

owned by the commercial debt solutions

business Azzurro Associates.

Credit Management has learned that

analysts within Azzurro have identified a

number of occasions when the same PGs

were being used to secure new loans from

different lenders sometimes only days after

a previous loan had defaulted and without

the new lender being aware.

Andrew Birkwood, Chief Executive

of Azzurro Associates, has evidence of

one case where the owner of a gift shop

defaulted on a loan on 9 November with

one lender, only to take out another loan

with a different lender on 22 November

using the exact same Personal Guarantee.

He went bust owing more than £50,000:

“Had the second lender been aware that the

busines owner had been using the same PG,

they would not have agreed to the loan,” he

says.

“The problem is that lenders would have

no way of knowing, and the CRAs, who

could do something about it, seem

reluctant to listen.”

Read the full article on page 21

>NEWS

IN BRIEF

Welcome extension

THE Money Advice Trust has

welcomed the FCA’s proposal to extend

the availability of payment deferrals

on mortgages and on credit cards,

loans and other forms of consumer

credit by six months. The move was

confirmed after the Government’s

announcement of a second lockdown

and extension to the Job Retention

Scheme. The charity has called for

similar action for people who are

self-employed, people struggling to

pay their rent and those claiming

Universal Credit.

Deal on a plate

RSM has helped Camino, the Spanish

tapas restaurant and bar group,

to secure a rescue deal allowing

the business to continue serving

customers from its four restaurants

and two bars preserving 77 jobs.

Camino Trading Limited, a newly

incorporated company run by cofounders

Nigel Foster and Richard Bigg,

has agreed to acquire the business

and assets from the Administrators

of Camino Leisure Holdings Limited

and Camino Restaurants Limited (the

group’s operating entity) following an

accelerated sales process.

Nothing to sniff at

NEW research from StepChange Debt

Charity suggest levels of household

borrowing and arrears attributable to

Coronavirus have soared to £10.3bn

since the start of the pandemic,

an increase of £4.3bn (66 percent)

since May. The report, Tackling the

Coronavirus Personal Debt Crisis,

has found the number of people

affected by COVID-19 who are in severe

problem debt has risen to 1.2 million –

nearly doubling since March – with a

further three million at risk of it.

Andrew Birkwood,

Chief Executive of

Azzurro Associates.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 7


NEWS ROUNDUP

D&B launches new Lending

Intelligence solution

DUN & Bradstreet has

launched a new small

business lending solution

for UK commercial finance

providers.

D&B Lending

Intelligence is described as an online

solution that enables lenders to make

faster credit decisions for small and

medium enterprises (SMEs) by providing

real-time access to a wider range of data,

combining new UK commercial credit

data from designated leading banks with

additional data and analytics from the Dun

& Bradstreet Data Cloud.

More than £60bn has been provided to

1.4 million UK businesses via Governmentbacked

loan schemes in 2020 and

access to finance is key to securing

the survival and stimulating growth

for SMEs. With exponential growth in

business loan applications since the first

national lockdown in March 2020, having

immediate access to credit data online will

reduce the time spent seeking referrals

and further information and will help

to facilitate decision-making, support

risk assessment and open up lending

opportunities for businesses when they

need it most.

Tim Vine, Head of Credit Intelligence

at Dun & Bradstreet, “incomplete data

slows decision-making,” he says, “and by

providing data from lenders alongside

additional data and analytics, our online

solution is designed to enable quicker

lending decisions and ultimately to

support the Government’s aim to increase

access to finance through the increased

availability of SME lending data.”

Government must address

‘widespread unfairness’

A new report has found ‘widespread

unfairness’ in the way central and local

Government collect debts including council

tax, benefit and tax credit overpayments.

The Money Advice Trust is calling for

Government to ‘level up’ its debt collection

practices to those of other sectors – or risk

pushing people further into difficulty in the

wake of COVID-19.

The charity’s new report entitled

Levelling up: The case for reforming

government debt collection, has been

published as the Cabinet Office considers

responses to a call for evidence on

improving fairness in Government debt

management. The charity’s findings come

at a time when more people are said to

be struggling to repay public sector debts

– a trend the charity says is likely to be

amplified by COVID-19.

The report highlights the negative impact

that current Government debt collection

practices are having on those struggling

to repay, and particularly on people with

mental health problems or other vulnerable

circumstances.

A national survey of debt advisers shows

just nine percent think that Department for

Work and Pensions identifies and supports

vulnerable customers ‘well’ or ‘very well’,

with just 12 percent for HMRC. These figures

are in sharp contrast with the private

sector, with 46 percent of advisers reporting

that banks/building societies identify and

support vulnerable customers ‘well’ or ‘very

well’, 45 percent for energy firms and 68

percent for water companies. Debt advisers

also report widespread concerns over the

way that Government creditors assess

the affordability of repayments, leading

to unaffordable payment demands – with

advisers rating Government practices as

worse even than payday lenders.

Credit Management understands that the

charity has written to Ministers to make

the case for what it calls a ‘bold package of

reform’ designed to level up Government

debt collection practices to those seen in

the private sector.

The proposal includes: Backing calls

for a new Government Debt Management

Bill to embed the principles of fairness

and affordability throughout central and

local government; reforming council tax

collection practices by amending outdated

regulations and introducing a statutory

‘pre-action protocol’ for councils to follow;

and introducing independent bailiff

regulation as part of a ‘reduce and reform’

approach to protecting people in debt from

the harm caused by bailiff action.

Joanna Elson CBE, Chief Executive of

the MAT, says the widespread unfairness

needs to be addressed: “With more and

more people struggling to repay debts owed

to government even before the devastating

impact of Covid-19, the Government

must act swiftly to level up its

collection practices to those of the

private sector.”

>NEWS

IN BRIEF

Technical Committee

urges contract review

THE CICM Technical Committee is

urging credit managers to review and

amend current contracts to ensure

those contracts remain viable as the

UK prepares to leave the EU at the

end of the year.

On 31 January 2020 the UK formally

ceased being a member of the EU.

However, the transition period, which

runs until 31 December 2020, sees

Britain continue to participate in the

customs union and single market.

Given that commercial contracts

that cross the UK-EU border, up to

this point, have been written in the

context of Britain’s membership

to the EU, they are likely to require

modification. To start, many contracts

refer to the EU as a territory, with the

UK included in this at the time the

contract was written. For example,

a reseller’s right to sell a certain

product could be confined to a certain

geographical area, and uncertainty

may arise if this is labelled as the EU.

If this is the case, re-writing the terms

to specifically mention the UK should

be a first step.

Contract clauses such as

exclusivity may also have inadvertent

consequences. If an exclusive

supplier was impacted by price or

currency fluctuations or unable to

source raw materials, a business

would remain unable to source the

necessary supplies elsewhere. In this

sense, English law may not provide

the common sense remedies that

businesses will be relying on.

To soften the blow and prevent

black holes from appearing, EU

legislation will continue to apply,

through becoming English domestic

law. These laws may then be

rewritten, but there is no indication as

to which will remain and which will

go. For these reasons, if a contract

is drafted on the assumption that

obligations and restrictions currently

imposed by EU-derived legislation

will continue to be in effect in the

same way for years to come, this

could prove to be problematic.

We urge credit

managers to review

and amend current

contracts to ensure

those contracts

remain viable.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 8


FROM THE CHIEF EXECUTIVE

Zoom Zoom!

CICM members should back

themselves to win.

Sue Chapple FCICM

SO much has happened this

year it is almost impossible to

know where to begin. When

COVID-19 hit, and the first

lockdown began, there was

definitely a sense of ‘we’re

all in this together’. Our members were

quick to adapt to ‘working from home’ and

embracing new processes and procedures

to keep the cash flowing. Between us we

all learned a new language of Microsoft

Teams and Zoom, doing business ‘virtually’

and interacting with our colleagues and

customers via our computer screens.

The team at CICM HQ swung quickly

into action with its Managing Credit in

a Crisis initiative, the first in what was

soon to become a series of campaigns to

support our members through difficult

times. We saw a great deal of positivity in

those early months: the cash kept flowing;

collections levels not only held their own

but actually increased; and the apocalypse

didn’t quite happen as predicted.

Investments in new credit

management platforms were accelerated

and implemented in months, and the

Chancellor’s financial support packages

kept the wolf from the door, at least in

the immediate term. We experienced

CBILs and BBLs, and all learned another

new word: furlough. What I think we all

hoped might last a few weeks proved not

to be the case as the weeks turned into

months, and nerves became increasingly

frayed.

CHALLENGE AND OPPORTUNITY

And so here we go again. Another

lockdown. Another period of worry,

uncertainty and challenge. But also

another opportunity for our members

to demonstrate their true worth, and the

essential role they play in keeping the

wheels of industry turning.

The messages in our latest ‘Managing the

new credit future’ initiative still hold true:

we must continue to adjust our collections

and recovery strategies to fit the constantly

changing financial environment; we must

look at our forecasts and projections and

ensure they remain honest and realistic;

and we must continue to talk, to ensure

credit teams’ actions are aligned with

senior management objectives. Training

also remains critical, equipping our teams

with the skills they need to succeed.

If there is a single message I want to

communicate it is this: trust yourself. Trust

your judgment in making decisions that

are in the best interests of your business.

Trust your training, and the skills you have

acquired as credit professionals, and take

the opportunity to learn more. And trust

your colleagues, working with your people

and senior management towards a new

future.

As we head into a New Year, we know

that the road ahead is going to be difficult.

We know that a storm is brewing. We

recognise the recovery, when it comes,

will be long and slow. This means we must

look after each other, to share experiences,

to engage with your professional body and

your peers to help us through what will

undoubtedly be a difficult time. We will

ultimately prevail, and it will be the skills

that you have, the knowledge you have

acquired, and the support of the CICM,

that will get us there.

I cannot say I ever envisaged that

when I took over the reins as your Chief

Executive from Philip King FCICM at the

start of the year that the country would

now be facing its biggest challenge since

the second world war. Neither, to continue

the analogy, can I promise it will all be

over by Christmas. But I can wish you all

well and hope that over the festive season

you will take some time to pause and reenergise,

for there is undoubtedly more

hard work ahead of us.

We will ultimately prevail, and it will be

the skills that you have, the knowledge

you have acquired, and the support of the

CICM, that will get us there.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 9


INSOLVENCY SPECIAL

BARE

ESSENTIALS

New rules protect supplies to an insolvent customer.

AUTHOR – Julia Ishak

THE new Corporate Insolvency

and Governance Act 2020 (CIGA)

presents a number of challenges.

Many suppliers may now find it

considerably more difficult to

terminate or suspend a supply

contract (and to exercise many other standard

contractual rights) in the event of a customer’s

insolvency. And that will be the case, even if

those rights are expressly set out in the contract.

The protection of supplies of goods

and services introduced by CIGA applies

to contracts for the supply of goods and

services (including contracts entered into

before CIGA) where a customer becomes

subject to a relevant insolvency procedure on

or after 26 June 2020.

PROTECTION OF SUPPLIES OF GOODS

AND SERVICES

Where CIGA applies and a customer becomes

subject to a relevant insolvency procedure:

• No termination of the contract or supply –

any provision in a contract providing for the

contract or supply to terminate or allowing a

supplier to terminate the contract or supply,

because its customer becomes subject to a

relevant insolvency procedure, will cease to

have effect. A supplier would not therefore be

able to rely on any such automatic termination

or contractual right to terminate.

• No taking place or doing of any other

thing – any provision in a contract providing

for any other thing to take place or allowing

a supplier to do any other thing, because

its customer becomes subject to a relevant

insolvency procedure, will also cease to

have effect. Examples may include changing

payment terms, credit periods or payment

tariffs, exercising retention of title or variation

rights, increasing prices or requiring additional

payments.

• No termination for prior events during a

relevant insolvency procedure – a supplier

cannot exercise any contractual right to

terminate the contract or supply because of

a prior event, if that right arose but was not

exercised before its customer became subject

to a relevant insolvency procedure. The

contractual right is suspended for the period

of the relevant insolvency. A supplier would be

able to rely on any available right to terminate

before a relevant insolvency procedure

begins, including for example where any steps

Consider what

rights may be

available if a

customer is

in financial

hardship and

consider whether

it might be

appropriate,

if possible, to

renegotiate

or not renew

existing

contracts.

are taken in the lead up to such insolvency.

However a supplier would not be able to rely

on a contractual right to terminate for a prior

event once a relevant insolvency procedure

begins.

• No condition requiring outstanding

charges to be paid – a supplier cannot make

it a condition (or do anything which has the

effect of making it a condition) of any supply of

goods and services after its customer becomes

subject to a relevant insolvency procedure that

any outstanding charges in respect of a supply

made to its customer before that time are paid.

A supplier may therefore be obliged to continue

to supply its insolvent customer even when it is

owed substantial sums by that customer.

CONTRACTS FOR THE SUPPLY OF GOODS

AND SERVICES

CIGA is likely to apply to most contracts for the

supply of goods and services although there are

limited exclusions for example for:

• Essential supplies – broadly defined as gas,

electricity, water, communications services,

and goods and services for the purpose of

enabling or facilitating anything to be done

by electronic means (computer hardware

and software, information, advice, technical

assistance, data storage and processing, website

hosting). Essential supplies may be governed

by a separate (more limited) regime. However

where this separate regime does not apply,

CIGA may still apply to essential supplies.

• Persons involved in financial services –

where a customer or supplier is an insurer,

bank, electronic money institution, investment

bank, investment firm, payment institution,

operator of payment systems, infrastructure

provider, recognised investment exchange or

securitisation company.

• Contracts involving financial services – such

as financial contracts, securities financing

transactions, derivatives, spot contracts, capital

market investments, contracts forming part of a

public-private partnership.

• Specified legislation – for example for

financial markets and aircraft equipment.

• Certain small suppliers – this temporary

exception has been extended to 30 March 2021.

Whilst this remains unclear and will be a

question of fact and circumstances in each

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 10


INSOLVENCY SPECIAL

AUTHOR – Julia Ishak

case, CIGA may also apply to agreements that are not

usually regarded as ‘contracts for the supply of goods

and services’. This may for example cover equipment

hire, franchise, agency, distribution, software and

intellectual property licences. Similarly, whilst licences,

property leases and agreements for the sale of land or

property may not be contracts for the supply of goods

and services, they may contain an element of supply of

goods and services and that element may be caught by

CIGA.

RELEVANT INSOLVENCY PROCEDURES

Relevant insolvency procedures cover a wide range

of insolvency proceedings including administration,

liquidation, the appointment of a new administrative

receiver or provisional liquidator, a voluntary

arrangement, a Part A1 moratorium and a court order

for a meeting of creditors or members under a Part 26A

restructuring plan.

So much for the technical aspects of the new Act, what

practical steps should suppliers now be taking? Suppliers

should now update standard contracts and templates.

There are many ways a supplier may be able to protect

themselves in their contracts and help to mitigate the

impact of CIGA. They should also consider this when

negotiating new supply contracts (especially where

based on a customer’s contract).

They should review existing supply contracts,

prioritising those contracts of greatest value, importance

or risk. Consider what rights may be available if a

customer is in financial hardship and consider whether

it might be appropriate, if possible, to renegotiate or not

renew existing contracts.

Suppliers should similarly consider legal advice before

exercising any rights where a customer becomes subject

to a relevant insolvency procedure as many standard

clauses may now cease to have effect and if a supplier

relies on such a clause it may be in breach of contract

and liable (for example, for wrongful termination or

damages).

Other steps they should take include: reviewing

approaches to managing contracts and mitigating

insolvency risk, considering whether enhanced contract

management might be more appropriate; reviewing

insurance cover and credit insurance; and reviewing

debt collection procedures and considering whether

these need to be enhanced.

They might also consider whether more due diligence

is necessary on customers before a supply contract is

entered into and, for larger contracts, throughout the

lifetime of the contract, and consider parent company

guarantees and performance bonds. Training for contract

managers so they know what they should and should not

do if a customer is in financial hardship might also be

considered.

This article is only a brief overview and, as with

all legislation, there are exceptions and additional

considerations that may also be relevant.

There are many ways a supplier

may be able to protect themselves

in their contracts and help to

mitigate the impact of CIGA. They

should also consider this when

negotiating new supply contracts

(especially where based on a

customer’s contract).

Julia Ishak is Legal Director at Shoosmiths, and has been

a guest speaker at recent meetings of the CICM Technical

Committee.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 11


OPINION

THREATENING

BEHAVIOUR

Activist investors can do real harm

where management is weak.

AUTHOR – Adam Bernstein

MICHAEL Douglas in Wall

Street and Leonardo

DiCaprio in the Wolf of Wall

Street both put on record,

albeit on celluloid, the point

that there’s no sentiment in

business – that it’s invariably all about power

and money.

It’s clear that individual investors carry

little power. But it’s just as apparent that larger

investors have greater firepower and when they

decide on a course of action, they have a real

prospect of effecting change.

DEFINING THE POSITION

Lumped together as ‘activist investors’ this form

of crusading covers a range of activities by one

or a number of a publicly traded corporation’s

shareholders that, according to 2015 paper

published by Harvard Law School Forum on

Corporate Governance ‘are intended to result

in some change in the corporation.’ The paper

carries on, noting that there’s a spectrum of

goals that depend on the change desired and

how assertive the investors are.

Jason Caulfield, a partner in the Financial

Advisory department of Deloitte LLP, is more

blunt in his assessment. He says that: “an activist

investor…refers to anyone that buys a stake

in a company before engaging management

on specific topics.” He adds that the term

is often used for a grouping of hedge funds

whose activist investor goals revolve around

delivering a step-change in financial returns for

shareholders – themselves included.

By definition, the strategies and tactics they

use to achieve these goals and the ways in which

they engage with management vary widely. The

more aggressive will seek a significant change

to the company’s strategy, financial structure,

management, or board. But at the other end

of the spectrum is the investor that is only

interested in a single engagement based on a

defined issue.

Hedge fund activist investors can trace their

roots to the US corporate raiders of old, but as

Caulfield notes: “with the inflow of funds and

the publicity of some of their successes, they’ve

shown a real interest in globalising. Europe and

other developed markets where shareholder

rights are well represented are fast catching up

with the US.”

And with greater liquidity, size is no longer

a prohibiting factor. In fact, Caulfield is seeing

larger global companies over-represented as

targets: “They are not afraid of any sector,” he

says. “Some are more attractive than others

due to the ability to trigger M&A or be able to

effect relatively short-term change in direction

and the market’s perception and value of the

business.”

GROWING PROBLEM

Either way, the problem is significant for firms.

Another paper on Harvard’s website, this time

published in August 2020, reported a sharp

uptick in activity. In 2017 there were 484 activist

investor campaigns of which 20 percent were

successful. In 2018, that number rose to 655

campaigns of which 30 percent were successful

or settled. By 2019 that number rose again to

893 campaigns with a 17 percent success or

settle rate. And by the start of August 2020 there

had been 797 campaigns that had seen a nine

percent success or settle rate. Extrapolate the

number and there’s the prospect of some 1366

campaigns for the full year.

But there’s one example that stands out for

the world of credit – Australian debt recovery

specialist Collection House. The company has

been beset by troubles since its CEO suddenly

resigned in November 2019. Its shares were

suspended in February 2020 following concerns

raised by auditors KPMG over its ability to carry

on as a going concern. Then came talks with

other parties over recapitalisation and when its

accounts were finally released in June a $8.5m

profit tumbled to a $47.3m loss.

At issue, to put the matter into context here,

was that a review into the value of the company’s

ledgers led to a write down of $89.8m. But this

review came at a time when consumer groups

had found that the company was a far bigger

user of bankruptcy actions than other debt

collectors. The company has since lifted the

threshold for initiating bankruptcy action to

$20,000.

For Caulfield, the appearance of an activist

investor can be a very real headache for a

business. “Whilst it is arguable that their goal – a

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 12


OPINION

AUTHOR – Adam Bernstein

step-change in financial returns – is something

management should be doing, the way they go

about it can be very disruptive, stressful, and

not aligned to longer term investors’ interests,”

he says.

He’s bothered that they can trigger or prevent

an executive’s strategy – for example, demanding

asset sales or mergers, or pressure management

into a new direction and agitate for change at

the top if they don’t get their way. “For some,”

he adds, “the phrase ‘any means necessary’ can

spring to mind.”

As to the types of businesses they target, this

varies, but it’s entirely logical that, typically,

they tend to be considered under-valued

and for Caulfield, often this is due to their

perception that value is down to the quality

of management of the business. He says that

activist investors usually like a business that has

good fundamentals but has lost its way; they

like firms where there may already be a degree

of unhappiness amongst existing shareholders.

GLOBAL TRENDS

New trends are emerging. It’s certainly the case

that activism is becoming more global in nature.

What is thought of as starting in the US (and

which had risen to the fore with the likes of Carl

Icahn and T Boone Pickens) has moved around

the world.

The Financial Times, for example, reported

in February of this year that the Tokyo Dome

– ‘a centrepiece of the Japanese capital…with

revenues that have been tepid and its share

price flat for six years’ – was under siege

from Oasis Management, it’s second largest

shareholder, which had almost doubled its stake

to 9.6 percent. Oasis has previously taken on

Nintendo, Panasonic and Toshiba and with the

dome, issued an 85-page document citing faults

and the changes required to ‘unlock vast profit

potential.’

With the inflow of funds and

the publicity of some of their

successes, they’ve shown a real

interest in globalising. Europe

and other developed markets

where shareholder rights

are well represented are fast

catching up with the US.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 13

continues on page 14 >


OPINION

AUTHOR – Adam Bernstein

For Caulfield, aside from the increasingly

global nature and appearance of local activists

outside the US, there is a divergence of

methods used by the more hard-nosed ‘pure’

activist investors “…who will rapidly escalate

disputes and take disagreements into the

public domain, versus the ‘constructionists’

who take a (slightly) more medium term view

and look to work with management more

collaboratively, at least for a period of time.”

COVID-19 has dented global economies and

livelihoods. But it has also altered the activist

investor landscape too. Caulfield says: “It has

put a massive shock through the markets and

created a level of volatility in the fundamentals

as well as companies’ share prices. This,

combined with activist investors trying to

gauge the impact on existing investments,

capped the levels of activity.”

Activism is not going away

any time soon. Whether it’s an

attack from an activist investor,

or pressure from the media or a

consumer group, firms need to

comprehend the concept that

they aren’t in ivory towers living

in splendid isolation.

But he warns that the outlook is stabilising:

“We are seeing companies beginning to

emerge, and indeed, the performance of

management during and after the pandemic

will provide rich hunting grounds for activist

investors seeking to put them on the spot.”

Investors, no matter their size or level of

professionalism, by definition seek the best

possible return. And activist investors are no

different. Caulfield has seen their war-chests

grow as underlying investors seek alternative

asset classes such as these. He says that “…

they are needing to find new targets. They’re

also utilising a wider range of techniques,

and indeed are showing signs of overlapping

with another kind of activist investor – private

equity.”

But just as global events and the markets

can impact activist investor activity, so too

can Government policy. Put simply, Caulfield

knows that Governments can legislate to bias

shareholder influence to push longer-term

objectives at the expense of new shareowners,

can widen definitions of ‘strategic’ sectors and

can limit the ability for M&A in those sectors.

Governments can have a very real impact on

activist investors.

So, with the scene set, how can a firm

prepare itself for the onslaught of activist

investor?

Caulfield is of the view that companies can

fight back. But depending on whether they

are merely apprehensive or are actually in the

throes of a campaign will influence what they

can and should be doing and the timescales

for action.

FIXING THE ROOF

First off, he says that businesses that have

time to ‘fix the roof’ should be challenging

the business to ensure it has the right value

creation plan, assets and balance sheet. He

says that this may just provide confidence –

that can be fed to markets – that the business is

on the right track. However, this activity might

also provide the trigger for a change without

the disruption of an activist investor. “But,” he

warns, “be aware of your risks – the features of

your company, its performance, management

and board that may attract them.” He believes

that this can also help to ensure that action

is taken to plug the holes while fundamental

improvements can take place.

But if an investor’s campaign is imminent

or underway, then Caulfield advises targets

to focus on tactics. There is unfortunately no

‘one-size fits-all’ approach and so the defence

will depend on the strength of the executive

and the company’s performance on their watch

and the nature of the activist. That said, he

does suggest engaging with activist investors

as some have genuine ideas worth consider

while others will be a drag on management

time, focus and resources.

Caulfield concludes: “Ensuring that the

strategy, communication and preparedness

amongst the executive and board are clear,

as well as having insight into the particular

activist, are some of the basic things to

prepare.”

Activism is not going away any time soon.

Whether it’s an attack from an activist investor,

or pressure from the media or a consumer

group, firms need to comprehend the concept

that they aren’t in ivory towers living in

splendid isolation. A mixed metaphor but the

point is made.

Adam Bernstein is a freelance business writer.

We are seeing companies

beginning to emerge, and

indeed, the performance of

management during and after

the pandemic will provide

rich hunting grounds for

activist investors seeking to

put them on the spot.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 14


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INSOLVENCY SPECIAL

Easing the Burden

Changes are being enacted to

regulatory processes.

AUTHOR – Michelle Thorp

CORPORATE insolvency is in the

spotlight more than ever at the

moment. This is mainly, but not

solely, linked to the pandemic,

with the latest statistics from the

Insolvency Service on company

insolvencies showing that these increased 19

percent in September this year, compared to the

previous month.

Prior to the Government’s announcement of

the furlough scheme’s extension, the Office for

National Statistics (ONS) reported that 64 percent

of businesses in the UK were at risk of insolvency.

It is logical to think that the furlough extension will

mitigate this risk to an extent, but it is still a clear

warning of the risks businesses currently face,

and, sadly, we do expect company insolvencies to

rise significantly.

SWEEPING LEGISLATION

This year, we have seen the Corporate Insolvency

and Governance Act, sweeping new legislation

that brought in several changes to the insolvency

framework to give companies breathing space

to pursue a rescue plan. The Act’s key measures

are the moratorium (preventing legal action from

being taken against a company while it seeks a

rescue deal); a new ‘Arrangement’ restructuring

plan, sanctioned by the courts; and restrictions

on termination clauses, statutory demands and

winding up petitions. The Act’s suspension of

wrongful trading rules has now expired.

These new regulations will go some way in

helping to secure the future of businesses, though

with that said, we are mindful of the forbearance

required from creditors, not just in relation to

these new regulations but in general this year

too. Similarly, these new measures have required

Insolvency Practitioners (IPs) to get to grips with

new ways of working, as well as prepare for the

expected rise in insolvencies. With upholding

the interests of creditors a key concern, this year

we have launched various online workshops and

webinars to help our members understand the

new measures and apply them practically to their

work. At one of our upcoming events, we will

be joined by Chris Leslie, the CEO of the Credit

Services Association, to hear the creditor view on

the state of personal insolvency in particular, but

no doubt he will cover the entire landscape.

We have also enacted changes to our regulatory

processes as far as practicable, to ease the burden

on IPs and ensure that insolvency processes

continue to treat all parties fairly.

Our work this year in response to the pandemic

has been designed to help our regulated

A Question of Honour

Are proposals for a new ‘independent evaluator’

really saying IPs cannot be trusted?

AUTHOR – Simon Plant

THE announcement by

the Insolvency Service

(IS) of a new regime in

relation to Pre-Packs,

and the appointment of

independent evaluators

(see Credit Management November

issue, news pages 6-7), raises a number

of serious concerns that should have the

alarm bells ringing loudly within the

ranks of the Insolvency Profession. For

what it is really saying, is that IPs cannot

be trusted.

Now before there are cries from the

gallery that such a view is extreme, let’s

look at the evidence. The way that Pre-

Packs are being discussed currently is

in a manner that suggests that all Pre-

Packs involve sales to connected parties

– when they do not – and that somehow

any sale to a connected party involves an

element of skulduggery, which it doesn’t.

No-one in the industry especially

sees Pre-Packs or sales to a connected

party as an issue, which suggests

that the Government is pandering

to a minority opinion which in

turn is likely to result in a poorlyconceived

proposal. Like this one.

FLAWED THINKING

There are so many flaws in the proposals

it is difficult to know where to begin.

Let’s start with the appointment of an

‘independent evaluator’ to review sales

to connected parties. Who are these

evaluators? How are they themselves

‘evaluated’ for their technical

competence and experience? The

Insolvency Service states only that they

have to ‘self-declare’ their expertise,

which if it wasn’t more dangerous

would be laughable. So let’s think this

through: a qualified surveyor and

member of the Royal Institution of

Chartered Surveyors (RICS) values

an asset in an insolvency process.

An Insolvency Practitioner, similarly

executes their own duties as a member of

the Insolvency Practitioners Association

(IPA).

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 18


INSOLVENCY SPECIAL

This year, we have seen the Corporate Insolvency and Governance Act,

sweeping new legislation that brought in several changes to the insolvency

framework to give companies breathing space to pursue a rescue plan.

Michelle Thorp

community understand the changes

that have happened, as well as prepare

for those yet to take place – and, as ever,

with upholding creditor interests a key

concern.

IN THE SPOTLIGHT

As well as the Act this year, other

insolvency processes have been in the

spotlight. With insolvencies set to rise,

these changes are all the more important

for all stakeholders to understand.

Pre-pack administrations can

sometimes be the best insolvency

option for all parties involved, but

there is concern among creditors

and others of unscrupulous company

owners buying their company back

via a pre-pack deal to continue trading

while dumping the company’s debts.

Under the existing rules, a pre-pack

sale should only be entered if it is in

the best interest of creditors, and,

amongst other requirements, proof of

the decision-making process should be

available. These requirements are part

of a set of wider measures brought in

by Statement of Insolvency Practice

(SIP) 16 in 2009. The Pre-Pack Pool

(PPP) was set up in 2015, supported by

the IPA and others, to provide means

for an independent opinion to be given

on any connected party pre-pack sale.

However, it was felt by the IPA that

further action was needed to provide

greater security and reassurance to

stakeholders. On 8 October 2020, the

Government announced, following a

review in which the IPA participated,

that pre-pack sales to connected parties

were to face mandatory independent

scrutiny.

In brief summary, connected party

sales will need to have an independent

opinion provided by an ‘evaluator’.

The new measures are due to be laid

before Parliament and may be subject

to change. The IPA will be providing our

recommendations to the Government as

part of the process, and I look forward

to participation in the progression of

the proposals as they take shape.

Michelle Thorp is CEO, Insolvency

Practitioners Association.

The Insolvency Service is saying that

the decisions made by two professionals

in two highly regulated industries that

are following best-practice from two

highly-respected professional bodies

have to have those decisions reviewed by

another person whose own qualifications

for doing so cannot be determined. Worse

than that: what you are in effect saying is

that IPs cannot be trusted.

Now what if we were to get over the

slur on our profession and for a moment

go along with the idea that a third-party

overview is both needed and preferred.

If an independent person or body has

to review sales to every connected party

on each Administration, it could actually

end up wrecking the process. Given

the volume of insolvencies expected in

2021, how will a new independent body

cope, given that a significant proportion

of Administrations result in a sale to

connected parties? Also, what if the body

delays or keeps seeking information

when an immediate decision has to be

made by the Administrator?

The cost of reporting and providing

the necessary information to the new

body is likely to be prohibitive, and if

the independent evaluator does not fully

understand the process or the detail, they

could deny a Pre-Pack for all the wrong

reasons.

And let’s look at another issue. The

unforeseen result of this proposal could

actually be to force a number of potential

Administrations – where a business and

jobs could be saved – into a liquidation

(CVL) where maybe it can’t.

Imagine: a business in administration

may have tangible assets, say, of £70,000

and intangibles (e.g ‘good will’) of a further

£30,000. A sale – whether to a connected

party or otherwise – will therefore realise

a potential value of £100,000 for creditors.

A CVL could, however, have a detrimental

impact on any perceived good will and

also may leave tangible assets as only

having auction values, which means

the same business in a liquidation will

realise far less money for the creditor.

As from the start of 2021, HMRC is being

given preferential creditor status. The

huge irony of this proposal, and the

likelihood of more CVLs in preference

to Administrations, is that they will

actually generate far less money for the

Government rather than more.

Somewhere down the line, the full

implications of these proposals have not

been properly thought through, though

there is a chance they never even get

debated and therefore actually never

come to pass. For creditors’ sake, let us

hope that they don’t.

Simon Plant is Chief Executive of the

SFP Group which provides business

turnaround and restructuring services.

SFPGroup.com

Simon Plant

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 19


Advancing the credit profession / www.cicm.com / December 2020 / PAGE 20


EXCLUSIVE REPORT

STACKING

THE ODDS

Lenders are open to the risk of

fraudulent use of multiple Personal

Guarantees.

AUTHOR – Sean Feast FCICM

PERSONAL Guarantees (PGs)

are being used fraudulently by

small business owners to take

out multiple loans without any

chance of those loans ever being

paid back.

And Credit Reference Agencies (CRAs) who

have been made aware of the practice and

could solve the problem simply by creating a

new PG database are so far failing to act.

The news follows a review of loans agreed

by several different lenders which have

since defaulted and are now owned by the

commercial debt solutions business, Azzurro

Associates.

Analysts within Azzurro quickly identified

that the same PGs were being used to secure

new loans from different lenders sometimes

only days after a previous loan had defaulted

and without the new lender being aware.

Andrew Birkwood, Chief Executive of

Azzurro Associates, has evidence of one case

where the owner of a gift shop defaulted on a

loan on 9 November with one lender, only to

take out another loan with a different lender

on 22 November using the exact same Personal

Guarantee. He went bust owing more than

£50,000: “Had the second lender been aware

that the busines owner had been using the

same PG, they would not have agreed to the

loan,” he says.

“The problem is that lenders would have no

way of knowing, and the CRAs, who could do

something about it, seem reluctant to listen.”

THE CREDIT ECOSYSTEM

CRAs are fundamental to the credit ecosystem.

Their databases (CAIS – Experian, SHARE

– TransUnion, Insight – Equifax), and the

framework around accessing and submitting

data to them, enable a fair lending construct

allowing lenders to confidently offer financial

products, and borrowers to safely secure credit.

Previously, CRAs held consumer databases

that included commercial transactions for sole

traders, SMEs and small partnerships. In 1999,

the Information Commissioners Office (ICO)

instructed the CRAs to separate the ‘personal’

and ‘business’ data for consumers which has

since led to the maintenance of two discrete

databases: Consumer and Commercial.

In the instance of PG-backed lending for

commercial loans, there is no CRA database for

reporting the commitment by the individual

PG, or the post-default liability. The credit

contract is a commercial agreement, and thus

it cannot be held within the Consumer CRA

database. And currently, no personal data may

be held within the Commercial CRA database.

“This leads to several negative consequences

for both the lender and the wider credit

market, which are a material risk to sustainable

commercial lending,” Andrew adds.

For SMEs, particularly recently incorporated

companies, finance is not always easily

available with sole liability on the company.

Commercial lenders commonly require a PG –

usually a company director – to offer increased

security against the repayment of the loan. The

PG will undergo a credit score assessment, as

part of the underwriting of the loan.

“With no Personal Guarantor bureau, the

facility for lenders to report the position of

personal guarantees does not exist,” Andrew

continues.

“With PGs, the guarantee is not called upon

by the creditor until the company defaults on

payment. So there isn’t a default as such by the

PG. The company defaults, and at that point the

creditor can call on the PG for payment when

the company has failed to pay. In this case

liability for the debt shifts to the PG.”

In the current hiatus created by the ICO there

is no record of an individual guaranteeing a

company debt; there is no record of whether that

individual is currently liable for the guaranteed

debt due to a default by the borrowing entity;

and there is no record of a PGs payment

behaviour in relation to a defaulted debt.

PG ‘STACKING’

This absence of data presents a challenge to

commercial lenders looking to offer credit

backed by a PG. A lender will underwrite the

loan based on factors including the completion

of an application form and a credit check

on any guarantor(s). The lender at this point

is only privy to the personal credit file of the

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 21

continues on page 22 >


EXCLUSIVE REPORT

Sean Feast FCICM

“If such data were available,

the credit decision may end up

being very different, we have

seen multiple instances of

individuals with clean credit

files guaranteeing multiple

commercial credit lines – a

practice known as ‘Stacking’.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 22


EXCLUSIVE REPORT

Sean Feast FCICM

PG, which could be extremely strong. The

lender has no visibility of any commercial

credit guarantees that have been made, and

whether the PG has repaid any defaulted

lines.

“If such data were available, the credit

decision may end up being very different,”

Andrew adds. “We have seen multiple

instances of individuals with clean credit

files guaranteeing multiple commercial

credit lines – a practice known as ‘Stacking’.

“In such instances, PGs can guarantee

many lines of credit with multiple credit

providers, with each lender oblivious to

the underlying credit risk. In the event of

default, the PG will see no detriment to their

personal credit file, unless the lender obtains

a Judgment against the individual. In this

latter case, if another lender is chasing a PG

for a guaranteed debt, there is almost no way

a new lender would know this – unless the

defaulted debt lender has secured a county

court judgement against the PG.

“In the event a PG guarantees multiple

credit lines, the risk that the PG will remain

solvent if some of the debts guaranteed fall

into default, is less than certain. Creditors

should be furnished with such information

at the underwriting stage of a new loan.”

ESTABLISHED LENDERS

Andrew says that many established

commercial lenders including Liberis and

Newable Business Loans acknowledge the

problem of PG stacking and the hidden

credit risk that is created.

Varun Goel, Director at Liberis, says the

problem could be easily be resolved if the

CRAs are willing: “Even with all of the due

diligence and risk analysis we do before

agreeing to the provision of finance, we

cannot currently see if a Personal Guarantee

has been used on multiple loan applications,

as we only have visibility of the personal

and commercial credit files. As such, PG

‘Stacking’ remains a risk that is completely

hidden from view.”

Phil Reynolds, Managing Director of

Newable Lending, says PG ‘Stacking’ is

certainly an issue and cites other challenges:

“At the origination stage, it is difficult

to get visibility of a borrower’s full PG

obligations, due both to multiple companyloan

combinations and outstanding balances

versus the total guaranteed (i.e default fees,

early settlement etc).

“Although we do a considerable amount of

director matching at Companies House, this

still relies on the director’s Companies House

profile being correct and often it is not. We

have seen numerous occasions where the

same individual is a director of multiple

companies, but their director profile is

not linked, usually because of something

as simple as a discrepancy in their date of

birth.”

HARD OF HEARING

Andrew is frustrated that approaches to

CRAs have so far produced no substantive

response: “A possible solution is to create

a third CRA database, solely dedicated to

personal guarantees. This database can be

governed by the same ruleset within the

Principles of Reciprocity, only allowing the

reporting of PGs (both live and defaulted),

with access only permitted to those who

contribute to the database. This provides

transparency, fairness and consistency to

commercial lending, whilst minimising the

potential credit risk currently at play.”

“With PGs, the guarantee is

not called upon by the creditor

until the company defaults on

payment. So there isn’t a default

as such by the PG. The company

defaults, and at that point the

creditor can call on the PG for

payment when the company has

failed to pay. In this case liability

for the debt shifts to the PG.”

– Andrew Birkwood, Azzurro Associates.

“Many Banks and Alternative Finance

Providers routinely request PGs,” Andrew

explains. “The call for a bureau to maintain a

PG register would give the lenders access to

the PGs true financial position at the point

of advance, currently signing a PG doesn’t

automatically impact personal credit but it

is a hidden risk to lenders. The awareness

of this hidden risk shouldn’t only become

apparent when a debt defaults and the PG is

called upon to make payments or is sued in

the County Courts.”

Andrew is calling on the CRAs to take

decisive action: “We believe, and are

supported by many lenders in this view,

that new commercial lending depends on

understanding the full credit risk picture.

“By enabling the reporting of PGs, CRAs

will stimulate commercial lending at a

time critical to the health and resurgence

of the UK economy. With Government led

COVID-19 funding sources soon to expire,

now is the time to resolve this issue to allow

the lending community to proactively lend

to businesses with clarity and confidence in

their lending decisions.”

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 23


COUNTRY FOCUS

Language and

cultural skills are key

to doing business in

Bulgaria.

Nodding acquaintances

AUTHOR – Adam Bernstein

THRACIANS, Persians, Celts

and Romans – Bulgaria’s

seen them all. Located in

the southeast of Europe,

adjacent to Greece,

Romania, North Macedonia,

Serbia and Turkey and on the Black Sea,

Bulgaria has been subject to numerous

battles and wars.

It was the Romans who brought stability

in AD45 but the Bulgars invaded in the

7th century. They were followed by the

Byzantines in the 11th century, a second

Bulgarian empire in 1185, the Ottomans

from 1396 and the current Bulgarian

state after the Russo-Turkish war of 1877-

78. Post-World War II Bulgaria fell under

Soviet influence and only became a

democracy in 1991.

THE STATE AND ITS PEOPLE

Bulgaria is a parliamentary republic with

a 240-member national assembly, council

of ministers and a government led by

a prime minister. It’s not the largest of

countries at 110,994 sq km, but it’s larger

than Iceland (102,775 sq km) and Ireland

(70,273 sq km). That said, it’s smaller than

Romania (238,397 sq km) and the UK

(242,495 sq km).

It is now a considered member of

the European Union, NATO, the UN, the

Council of Europe and the Organisation

for Security and Co-operation in Europe.

Statistics for Bulgaria appear very

hit and miss to the point that even state

agencies quote data from as far back as

2012 and 2014. Even so, demographically

speaking, Bulgaria is one of a handful of

countries that are witnessing a population

decline – Syria is in first place with an

average annual decline of 3.43 percent,

Andorra is second at negative 1.59

percent, and Bulgaria is seventh with a fall

of 0.62 percent. In numbers, according

to InvestBulgaria, a state body for inward

investment, Bulgaria had a population of

7.28m in 2012, but the estimate for 2019 is

closer to 6.94m.

Good language skills are key to doing

business and figures from InvestBulgaria

suggest that 85 percent of the population

speaks Bulgarian, nine percent Turkish

with English, French, German, Spanish

and Russian making up the balance. Two

thirds of students learn English or German

as a second language.

As an aside, it’s worth noting that the

Cyrillic script, used by some 250m people

– half of which are in Russia – hails from

Bulgaria; and since 2007 and Bulgaria’s

joining the EU, it’s been the third official

script after Latin and Greek.

Mining operation Bulgaria

Data from the Bulgarian National

Statistical Institute, and quoted by EY

in its guide, Doing Business in Bulgaria,

suggests that of the population, 1.06m are

under working age, 4.3m at working age

and 1.73m are beyond the working age.

Further, 65 percent live in urban areas.

Around 6.8 percent are in agriculture,

26.6 percent in manufacturing and 66.6

percent are in services.

The population is well educated with

some 71 percent going on to higher

education according to World Bank data

as quoted by The Times Higher Education

World University Rankings. The Borgen

Project believes that adult literacy exceeds

98 percent and the education system has

moved on markedly from the communist

era where propaganda and communist

ideals were central to teaching; now the

focus at 51 higher education institutions is

on science and culture.

As for cities and towns, the 2011 census

found that Sofia was the largest with 1.2m

people, Ploviv had 338,153, Varna was

third with 334,870 while in 10th place was

Shumen with just 80,855 people. It’s quite

interesting that Wikipedia (taken with a

pinch of salt) has drilled down to Melnik,

a town that sits in 257th place, that has a

population of just 347.

The official currency of the country

is the Bulgarian Lev. It’s seen as a stable

currency due to a currency board

arrangement introduced in 1997 where it

was pegged to the euro at a rate of BGN

1.95583 to €1.

KEY INDUSTRIES

Bulgaria, most certainly since accession

to the EU, has been performing well

industrially in terms of market share and

GDP. It has a number of key sectors: energy,

mining, metallurgy, machine, agriculture

and tourism, as well as IT and ICT,

telecommunications, pharmaceuticals

and textiles.

Of these, mining is one of the most

important. Data from 2015 shows

that it employed 24,000 while those

in mining related activities in general

numbered 120,000 in total. The US Energy

Information Administration reckoned that

in 2018 Bulgaria was Europe’s fifth largest

coal producer. This number may well be

revised as the world moves away from

fossil fuels.

Back in 2016 the Financial Times noted

that Bulgaria had a vibrant IT sector with

some 40-51,000 software engineers – in

Soviet times it was apparently known as

the Communist Silicon Valley because

of its role in computing technology

production. However, data from Oxford

Economics – quoted by EY – suggests that

the number employed is nearer 30,000.

Nevertheless, the sector is significant and

represents three percent of Bulgarian GDP.

On science and technology, spending in

Bulgaria is relatively low at just 0.78 percent

of GDP, according to 2018 data from the

National Statistical Institute. However, the

country is active in research in chemistry,

materials science and physics. Allied to

this is Bulgarian participation in space-

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 24


COUNTRY FOCUS

AUTHOR – Adam Bernstein

Pirin National Park, originally

named Vihren National Park,

encompasses the larger part of the

Pirin Mountains in southwestern

Bulgaria, spanning an area of

403.56 km². It is one of the three

national parks in the country, the

others being Rila National Park

and Central Balkan National Park.

related programmes that have seen two satellites and

more than 200 payloads and 300 experiments lifted into

Earth orbit.

Automotive is a sector that should appeal to investors.

Data from Colliers International and Automobile Cluster

Bulgaria found that the appeal is due to low labour

cost, EU membership, and proximity to producers and

customers. Great Wall Motors has a facility in Bahovitsa

with capacity for 50,000 vehicles a year with plans to

increase this to 70,000.

As previously noted, the economy is performing (or at

least was until Coronavirus). Data from Haver Analytics

and Dun & Bradstreet indicates that GDP growth, since

2015, has been consistently in the range of 3 – 3.9 percent.

The forecast, pre-COVID, was set at 2.8 percent for 2020,

2.9 percent for 2021 and 2.6 percent for 2022. It’s unlikely

that those forecasts will now be met. In monetary terms,

those percentages translate to a GDP per capita (in US$)

to 7,841 in 2014, 9,613 in 2019 and a forecast (pre-COVID)

of 11,092 in 2022.

The same data source shows that not only is Bulgaria

– along with Slovakia and Hungary – likely to be the

most stable of economies in Central and Eastern Europe

in 2019, but that it had the second lowest government

debt to GDP in 2018 – just 22 percent. Again, expect that

number to rise.

Bulgaria has benefitted from EU membership and

funding. Some €9bn between 2007 and 2013, reckons

a 2015 UK government document, made its way to the

country and a similar amount should be invested by

the end of 2020 with an emphasis on infrastructure,

science, education, innovation and development of

the knowledge economy. Foreign direct investment,

according to EY, stood at $1.68bn in 2018 mainly coming

from the Netherlands, Germany and Belgium. Bulgaria

ranks 23rd in Europe in terms of attracted FDI projects in

2018, according to EY’s European Attractiveness Survey;

there were 43 projects in 2018 compared to 33 in 2017.

TAX MATTERS

Tax rates in Bulgaria appear quite benign with

employment and directors’ fees income being taxed at a

flat 10 percent, capital gains at 10 percent too and just five

percent on dividends. There are various rates from four

to 7.5 percent on self-employment and business income.

On top of that are social security contributions that vary

according to factors such as age, activity, and retirement

status.

As for corporate taxation, it’s set at 10 percent (the

second lowest in the EU – first place goes to Hungary and

Montenegro at nine percent). Other associated taxes such

as dividends, interest, royalties, fees for services, rent

and payments from leases vary from 0 to 10 percent. If

the company is based in Bulgaria, it will pay tax on all

its profits from Bulgaria and abroad. If, on the other

hand, it’s not based in Bulgaria but has an office or

branch there, it will only pay tax on its profits from its

activities in Bulgaria. In terms of VAT, the standard rate

is 20 percent which is reduced to nine percent for hotel

accommodation and a zero rate that’s applied to intracommunity

and transport. VAT registration is mandatory

above a rolling BGN 50,000, BGN 70,000 for distance

selling businesses and BGN 20,000 for intra-community

acquisitions.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 25

continues on page 26 >


COUNTRY FOCUS

AUTHOR – Adam Bernstein

BUSINESS TYPE

As with other countries around the world,

Bulgaria offers a number of business entities

from which to conduct business. These include

the standard sole tradership (ET) and a general

or limited partnership. However, the most

commonly used format is the limited liability

company (OOD) or the joint-stock company

(AD). It’s also possible to open a branch or

representative office, the latter established not

to sell but instead, to carry marketing or other

ancillary business functions.

Back to the OOD and AD. These entities

require at least one shareholder with no

maximum number and liability is limited –

apart from, say, fraud and tax evasion – to the

shares subscribed. An AD

differs from an OOD in

that it may be comprised

of individuals and also

legal entities (including

those of any nationality,

place of incorporation or

management). Further,

an OOD must have at least

two BGN in share capital

but for an AD, that figure

is BGN 50,000. But there

is another difference –

management. An OOD

tends to have one or a

number of directors while

Sofia, Bulgaria

an AD can have various

levels of management.

Business registration

requires a name, defined activity, an address

in Bulgaria and initial share capital deposited

in a local bank in an escrow account. This is

then followed by registration on the publicly

available official Commercial Register and the

acquisition of an official stamp that is used to

endorse any formal activities. Annual reports

must be submitted to the register and there

is a requirement for annual inventory counts.

Firms should be prepared to store records for

some time; EY highlights that payroll data

needs to be kept for 50 years, accounting

records and financial statements for 10 years,

tax and social security records and everything

else for five years.

According to foreigner.bg, there are no

restrictions on overseas involvement in a

Bulgarian business; in other words, a Bulgarian

business can be 100 percent foreign owned.

However, registration isn’t fast and can take

up to two weeks; the assistance of a Bulgarian

speaker is essential since the register is not

available in English. Lastly, Bulgaria offers

intellectual property protection since it is a

signatory to various conventions and treaties

on the subject. However, as EY notes, licensing,

patents, copyright and trademarks are not

overly regulated or constrained; trade in this

area is expanding and so EY’s¬ advice is to draw

up agreements that observe the legal minimum

so as to maintain flexibility.

EMPLOYMENT RIGHTS

Businesses need staff and

detail from the Leinonen

Group, an international

payroll firm, explains a

number of key points.

First, employment

contracts must be

registered at the National

Revenue Agency and while

they can be written in

any language, a Bulgarian

copy is recommended.

Minimum wage legislation

exists and as of July 2020 is

€311.90 per month.

According to the

Bulgarian Labour Code,

employers can use probationary periods, but

they may last six months at most. Other than

the probationary period, termination of a

contract requires at least one month’s notice.

Annual paid leave is a minimum of 20 days

plus public holidays and when illness or injury

occurs, the employer will cover 70 percent of

the employee’s wages for the first three days

with the balance paid by the National Social

Security Institute. For an employee to acquire

the right to sick pay they must work a minimum

six months and social security payments must

be completed.

Foreign nationals may work in Bulgaria only

if they reside legally in Bulgaria; this is certified

by way of a relevant residence permit issued by

the Ministry of the Interior and/or a relevant

permit has been granted by the executive

director of the Employment Agency.

ONE FINAL POINT

Visitors to Bulgaria should be aware of one

key nicety of life there. The internationally

accepted gestures signifying ‘yes’ (nodding

up and down) and ‘no’ (side to side) are done

in reverse, so when Bulgarians nod their heads

this mean ‘no’, and when they shake their heads

it means ‘yes’, a fact that may be confusing.

Adam Bernstein is a freelance business writer.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 26


COUNTRY FOCUS

AUTHOR – Adam Bernstein

The Dormition of the Mother of

God Cathedral is the largest church

building in Varna and the third

largest cathedral in Bulgaria (after

St. Alexander Nevski Cathedral

in Sofia and St. Dimitar Cathedral

in Vidin). Officially opened on 30

August 1886. It is the residence of

the bishopric of Varna and Preslav

and one of the symbols of Varna.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 27


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Advancing the credit profession / www.cicm.com / December 2020 / PAGE 29


INTERNATIONAL

TRADE

Monthly round-up of the latest stories

in global trade by Andrea Kirkby.

Vietnam’s economic

recovery accelerates

MONEYWEEK is keen on Vietnam. It’s

recently reported that the country’s GDP

growth quickened in the third quarter of

2020 as exports and manufacturing began

to recover from the pandemic-induced

slump of the first half of 2020.

It quotes Nguyen Dieu Tu Uyen on

Bloomberg, noting that ‘GDP rose by

2.62 percent from a year earlier, up from

around 0.4 percent in the second quarter.

Improving industrial production, notably

a sharp increase in manufacturing output,

was one key reason’. Overall exports

climbed by 11 percent, fuelled mainly by

demand for PCs as office workers and

students shifted to online working; that

helped offset a decline in demand for

mobile phones and clothes as well as a

slump in tourism.

Not to be left in the wings, the

Vietnamese Government is creating jobs

with cash to improve roads, railways

and other forms of infrastructure. Public

investment since January has been at a

five-year high. Aggressive fiscal spending

is also buoying growth and consumption is

expected to roar back.

All of this means that the Asian

Development Bank is forecasting economic

growth of 1.8 percent for 2020 with the

potential for exceeding two percent if

nothing knocks the rebound off course.

UK exporters should go and make hay

while the Vietnamese sun shines.

TWO KEY NEW TRADE DEALS

A post on conservativehome.com, an

independent blog for Conservative Party

thinking, reckons that the recently concluded

UK-Japan trade deal has set the tone for other

post-Brexit agreements.

The author, Stephen Booth, thinks that not

only does the deal build on the existing EU-

Japan trade framework but it goes further

in areas such as digital services. It is also a

step towards joining the Comprehensive and

Progressive Trans-Pacific Partnership (CPTPP).

Trade deals with Australia and New Zealand are

the next step. Some 60 percent of UK exports to

Australia comprise services, so Britain is keen to

secure a high-quality deal on services, data and

investment. Trade deals with Australia and New

Zealand could mean liberalised visa regimes and

more open procurement markets. In return, the

UK may have to open its agricultural market.

It’s notable that Japan heavily protected its

agricultural sector, but it has been compelled to

slowly reduce tariffs over 20 years as part of its

CPTPP deal. Booth reckons that that could serve

as a model for any UK-Australia deal. Either way,

trade deals with the other side of the planet will

be good for UK exporters.

HAVE DOG WILL SPEND

IT’S well known that people love their pets, never

more so during Coronavirus lockdown. But a story

in the Daily Telegraph suggests that our canine

friends are being elevated to almost regal status

and are being pampered like never before. And

to prove the point, look at the Beverly Hills Hotel

which now has a canine connoisseur programme

that offers the ‘ultimate in pampering’.

After a request from a guest, it held a wedding

for two collies. Meanwhile, the paper has

reported that in London, Blakes Hotel has a pet

concierge service for £329 per night, ‘with

dog beds, dog walking maps, vet services and a list

of dog-friendly shops and restaurants’. Dukes Hotel

has picnic hampers for humans and now dogs for

£15 per dog, where they can picnic in one of the

Royal Parks nearby. The package includes ‘a wicker

basket with a plush picnic rug, gourmet dog food,

dog bone chew, a selection of toys and a small ball

launcher’.

The upshot? If you’re into dog-based goods and

services, look around the world to upper tier hotels

(whether now or post-Coronavirus) to see if your

products will export.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 30


It’s not all Greek to me

ATRADIUS has recently published an

updated country report on Greece. Noting

the political tensions with Turkey over

maritime borders that pose a threat

to regional stability all in the name of

hydrocarbon exploration, the report tells

that the Greek economy has been hit hard,

especially in tourism.

The country faces an economic

contraction of more than seven percent

in 2020, due to comprehensive lockdown

measures domestically and abroad, as well

as due to the global recession. Exports are

forecast to shrink 9.5 percent this year.

Tourism (accounting for almost 27 percent

of GDP) decreased 99 percent year-onyear

in April and May, and there was

no real rebound in the summer holiday

season. Unemployment has substantially

increased over the past couple of months,

peaking at 18.3 percent in July 2020.

On the bright side though, the report is

of the view that if the pandemic comes

to a gradual end, a robust recovery of

investments, private consumption and

exports output should lead to an economic

rebound of almost 7.5 percent in 2021.

Of course, the Turkish question could

interrupt this rebound.

But there is business still to be

done there. To grease the wheels, the

Government has announced financial and

fiscal measures amounting to about 14

percent of GDP, including loan guarantees,

additional expenditures on health, cash

transfers to households, various forms

of support to companies and VAT rate

reductions. Banks have allowed deferrals

of principal payments on existing loans

for hard-hit individuals until the end of

September, and for businesses until the

end of December 2020.t

INDIAN PROPERTY

OWNERS TO BORROW MORE

ACCORDING to a report on Reuters,

Indian Prime Minister Narendra Modi

has launched a property card scheme to

provide clarity of property rights in villages

and enable farmers to use their property

as collateral for loans from financial

institutions.

Two-thirds of India’s population live in

rural areas where few possess proper land

records and property disputes are common.

The Government plans to use drone

technology to map land parcels in rural

areas and cover some 620,000 villages

over the next four years. Despite owning

houses, people were facing multiple

problems while borrowing from banks.

They should be able to borrow very easily

from banks after showing property cards

issued under ownership scheme. Each card

will have a unique identity number similar

to the Aadhaar card – the world’s biggest

biometric identity project, covering more

than a billion people in India.

What does this mean for exporters? It

means potentially millions more people

with the financial wherewithal to buy more

than before the scheme was put in place.

Germany insolvency law reform

GERMANY has set out proposals to relax

insolvency rules, the goal being to help

avert a wave of bankruptcies in what is

Europe’s largest economy. There is a catch

though - companies hit by the Coronavirus

crisis must have a robust business model

to qualify.

The Government said: ‘Companies that

can show creditors a realistic prospect of

restructuring should be able to implement

their concept outside insolvency

proceedings’.

At the heart of the problem is

Germany’s biggest slump since World War

Two as the economy shrank by 9.7 percent

in the second quarter.

The proposal is at present, just that, a

proposal. However, if put in place it would

take effect at the start of 2021 and would

Coronavirus – a catalyst for political risks

CREDIT insurer Coface has just published

its Q3 Political Risk Index Barometer and

it’s seeing both a decrease in the risk of

conflict at a global level and an increase in

the risk of political and social fragility. The

latter is exacerbated in the countries most

exposed to the Coronavirus pandemic.

There are numerous uncertainties

surrounding the forecasts presented in the

barometer and it’s entirely clear that while

waiting for a vaccine and/or treatment,

businesses and households have postponed

spending and investment projects.

Coface is anticipating a global growth

rate of negative 4.8 percent in 2020,

followed by a 4.4 percent rebound in 2021.

GDP in the eurozone and in the United

States would remain 3.5 points and two

points below the 2019 levels, respectively.

extend the deadline for firms to file for

insolvency to six weeks from the current

three and authorities would apply more

relaxed benchmarks when examining

over-indebtedness.

The Government has already taken

steps such as allowing firms in financial

trouble due to the pandemic to delay filing

for bankruptcy until the end of the year

after extending an original deadline of the

end of September. This helped the number

of firms declaring insolvency in Germany

to fall 6.2 percent to 9,006 in the first half

of this year from the same period last year.

The worry is that suspending

insolvencies delays, but does not prevent,

the collapse of zombie companies

artificially kept afloat. In other words,

watch your days outstanding carefully.

It thinks that at least three years would

be required to return to pre-crisis levels of

production. This persistently lower level of

economic activity compared to pre-crisis

levels is expected to encourage an increase

in poverty, income inequality and thus

social discontent.

Among mature economies, the degree of

dissatisfaction of public opinion with the

management of the health crisis is highest

in Spain, the United States, the United

Kingdom and France.

And in the emerging world, Iran and

Turkey are among the countries with the

highest level of social risk. Several Latin

American countries (Brazil, Mexico, Peru,

Colombia), as well as South Africa, also

present both a high political and social risk

and high exposure to the Coronavirus crisis.

UK EXPORT FINANCE

INCREASES TRADE SUPPORT

UK Export Finance (UKEF) is now

providing increased financial support to

UK exporters seeking to sell to over 100

countries worldwide.

The programme now includes countries

such as Egypt, Paraguay, Serbia, Uganda

and Vietnam. On top of this is support for

more renewable projects overseas through

the allocation of £2bn of direct lending to

finance green projects in the latest budget.

UKEF provides support to UK exports

through guarantees, loans and insurance

and is strategically positioned to provide

competitive financing to overseas

companies looking to do business with the

UK. In 2019 to 2020, UKEF provided £4.4bn

of support for UK exports, which included

over £300m in financing for wind farms in

Taiwan, £110m for a new maternity hospital

in Ghana and £40m to repair 83 kilometres

of road in Gabon.

CURRENCY UK

EXCHANGE RATES VISIT CURRENCYUK.CO.UK

OR CALL 020 7738 0777

Currency UK is authorised and regulated

by the Financial Conduct Authority (FCA).

High Low Trend

GBP/EUR 1.12786 1.09370 Up

GBP/USD 1.32814 1.28592 Up

GBP/CHF 1.21865 1.17325 Up

GBP/AUD 1.85159 1.79434 Down

GBP/CAD 1.73794 1.69726 Up

GBP/JPY 140.13577 134.51040 Up

This data was taken on 18th November and refers to the

month previous to/leading up to 17th November 2020.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 31


CONSUMER COLLECTIONS

SOFTLY

SOFTLY

How will DCAs tackle the expected

surge in vulnerable customers?

AUTHOR – David Sheridan FCICM

IT has been a challenging year for

the whole country and as we head

into winter, the reality is that it’s

going to get tougher before it gets

better. All of us are now coping

with increased restrictions on our

movements and our ability to work and live

our lives as normal. The consequences and

impact of these restrictions is becoming

more concerning by the day, fuelled by the

various negative economic predictions being

forecasted as a result.

From a debt perspective, I think it is fair to

say that with the Government intervention

and FCA instructions issued to creditors

back in March, debt levels have so far been

supressed. The latest FCA research on the

impact of COVID shows that nearly 12 million

people have low financial resilience, of which

two million have become so since February as

a result of the pandemic.

Low financial resilience is one of four key

drivers of vulnerability as the FCA highlighted

in its consultation paper – GC19/3 on guidance

to firms on the fair treatment of vulnerable

customers. The drivers depicted in this paper

include health matters, life events, capability

and financial resilience (i.e. ability to cope

with setbacks).

Given the current situation, many people

are dealing with vulnerability, and with

growing concerns over the economy and

increasing unemployment levels, and

forecasts predicting it will double within the

next six months, the number of people who

will fall into financial vulnerability is clearly

going to increase. So what does this mean for

the Debt Collection sector, the businesses

tasked with helping creditors deal with rising

levels of delinquencies? Is this a fantastic

opportunity for firms to swell their coffers

(so to speak) whilst many businesses and

customers are facing financial ruin?

STRUCTURE AND GUIDANCE

Looking back to March and the initial

approach to the pandemic, the Government,

regulators and creditors came together and

provided structure and guidance and support

to help those customers and businesses

impacted by COVID. Many people, particularly

in customer facing sectors that were forced to

close, were furloughed. Large numbers took

advantage of payment deferrals – or holidays –

across their mortgages, loans and credit cards

to help deal with reduced income during the

initial lockdown period. These measures were

introduced to help people cushion the blow

they were likely to face as a result of economic

privations imposed to fight the pandemic.

Our business, like many other agencies, took

note of these enhanced forbearance tools and

approaches and adapted our communications

to ensure customers struggling to pay their

bills, let alone make any payments towards

their debts, were given support and guidance

for their situation.

The solutions offered vary according to a

customer’s individual circumstances. In some

cases, customers just needed to reduce their

monthly payments, some needed a payment

break and some customers were directed

immediately through an online partnership

that we have, with free to access debt advice

services. These organisations specialise in

helping customers review their overall income

and outgoings and restructure these to help

them meet essential expenditure needs given

their revised circumstances. It is also fair to

say that some customers actually benefitted

from the debt referral options given by all

creditors and used the unexpected income to

pay down debts.

The point that is important to stress here

is that the interest of the agency when

speaking with customers is not a single focus

on resolving the debt that has been assigned

to them but taking the time to understand

and assess the customer’s situation before

agreeing a debt repayment route. By all means,

if customers are in a position to repay the debt

in question, we should and do encourage

them to do that, but only after assessing their

circumstances and undertaking a general

wellbeing check. This is the appropriate thing

to do given the customer’s circumstances.

Given the current situation there will be an

increase in customers who are struggling

with their mental health and our agents are

trained to delicately explore this through

industry recognised standards such as the

Texas Framework and general sensitive case

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 32


CONSUMER COLLECTIONS

AUTHOR – David Sheridan FCICM

handling protocols. So it is important for DCAs to be

aware of this and provide sufficient support to the

customer in these circumstances, which can include

referral to recognised support organisations and

extended breathing space to support that.

CUSTOMER EXPERIENCE

I believe that the UK Debt Collection sector has

transformed itself in the past decade, driven heavily

by regulatory intervention and guided by the Credit

Services Association (CSA), but it has embraced

and pivoted on good customer experience as being

central to achieving great results. This is very much

at odds with the common misconception that we

are an industry that thrives on more people being in

debt. This is simply not the case.

The fact is we don’t, and our clients care about how

we deal with customers and ensure we achieve a fair

outcome based on their customers’ circumstances.

Now, more than ever, clients are monitoring firm’s

engagement with customers. Firms themselves

are also measuring their own interactions with

customers and many have dedicated resources

focused on analysing and improving the customer

experience.

Customer feedback is vital to assessing the quality

of the service we provide. Commercial outcomes are,

of course, important, but no more important than

conduct outcomes. To that point, the commercial

impact of more customers in debt struggling to pay

their bills means, quite simply, that many will be

paying less over a much longer period of time. As

a result, firms will see their servicing costs increase

and revenue levels reduce.

AGENT ABUSE

So no, it certainly is not boom time for DCAs.

Probably the opposite; it’s a very tough trading

outlook. It is also worth highlighting the great job

that customer facing agents are doing across the

country with many experiencing rising levels of

abuse from customers. We know emotions are

running high, particularly with the constraints and

frustrations people are having to live with, but that’s

no excuse for agents to be on the receiving end of

sometimes shocking verbal abuse from customers.

Given that many agents are now working from

home, children in the background or indeed with

parents or other loved ones, this is very tough to deal

with. We are all impacted by this pandemic and by

caring for each other and being respectful in our

interactions we will help each other get through it.

I know that our agents are really passionate about

helping people and take pride in doing that. To see

the rising levels of verbal abuse when we are trying

to help, therefore, is disappointing.

While we are facing tough times and many people

will struggle financially in the months ahead,

customers can be confident that if they are contacted

by firms like ourselves, DCAs who are members of

the CSA, they will be treated fairly and given the

support they need to deal with their situation.

David Sheridan FCICM is Operations Director of

ARC Europe, and a member of the CICM Technical

Committee.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 33


HIGH COURT ENFORCEMENT OFFICERS ASSOCIATION

STAYING THE COURSE

Vaccines, enforcement and ‘another new normal’

– what will 2021 have in store for enforcement?

AUTHOR – Andrew Wilson FCICM

WHAT’S in store for

us all in 2021? I

am certainly not

getting a crystal

ball out after the

events of 2020. It

would be a foolish person that would

predict what the world has in store for

us, and I’m certainly not going to try.

What I can do is set out what the High

Court Enforcement Officers Association

is going to focus on.

And although almost everything has

changed in 2020, in some ways, many

things have stayed the same.

We will continue to represent and

support our members and be the voice

for our profession. But what does that

mean in 2021?

We have three main priorities moving

forward:

1. Making sure High Court enforcement

is undertaken safely and responsibly.

2. Improving clarity and transparency

across High Court enforcement.

3. Modernising the High Court

enforcement system across England

and Wales.

This isn’t something our members can

do on their own, but they’re absolutely

ready and willing to play their part.

Safety and responsibility have been

the key watchwords for enforcement this

year and, even with an effective vaccine

on the horizon, that will continue into

2021 and beyond. Putting safety and

responsibility first has been critical

for the health of debtors, agents and

our collective reputation. It’s been the

right thing to do and we’ve actually

had improved engagement with many

thousands of debtors as a result.

It’s interesting that the changes

affecting High Court enforcement have

come from Government in a mix of

guidance and statutory instruments.

Whether that is the ‘Christmas break’

from evictions, clarity over exemptions

on possessions, or guidance on how

the Tier system applies to enforcement

across England, it hasn’t made any

difference to how our members have

responded.

The High Court Enforcement Officers

Association has been able to respond

quickly and confirm that our members

support and will follow the letter and

the spirit of what Government is asking

– whether that is guidance or legislation.

We’re all grown-ups and this is a grownup

and sensible way to operate right

now.

Clarity and transparency will be

important in 2021 as well, and we know

we can do better here.

VAT on High Court enforcement fees

is a good example. It’s a complex area,

and we’ve made our case to Government

for a zero VAT rating – it’s the fairest

and clearest approach for creditors

and debtors – and we’ll continue to

liaise with the Ministry of Justice to get

an outcome to this. Clarity is hugely

important for everyone involved and the

current position needs to move forward.

As for modernisation, things have

moved on in leaps and bounds in 2020,

but there is much more that can be done.

We’re supportive of the Government’s

moves to modernise the court system

and we want to open up more freedom

for creditors to choose between High

Court writs and County Court warrants

when it comes to collecting unpaid

debts.

The £600 figure – the current minimum

debt for which High Court writs can be

used – is arbitrary. It is causing delays

and frustrations for creditors who would

like to work with our members to collect

money that is owed to them. We’d like to

see that changed to increase options for

creditors and give UK plc more choice

in how it collects unpaid debts – which

will be critical for keeping the economy

moving in 2021.

Since entering the latest phase of

national restrictions across England in

early November it seems that the big

picture has jumped forward with news

of a successful vaccine developments, so

suddenly 2021 is starting to look a little

different. Here’s hoping.

Andrew Wilson FCICM is Chairman of

the High Court Enforcement Officers

Association (HCEOA).

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 34


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C R E D I T M A N A G E M E N T

Collaborative

Corporate credit teams

are redefining themselves

as champions of customer

satisfaction and service.

The emergence of straight-through eInvoicing and

collections software has allowed credit managers

to shrug off the stern, confrontational image for

one centred around insight and understanding.

Today, credit managers can work with suppliers

more collaboratively and provide valuable

management information to their executive

teams.

We live in the so-called Information Age and data is

the new oil. Credit managers with access to a rich

pipeline of data can apply their minds to analysis and

critical thinking, developing nuanced and dynamic

approaches to credit risk. Those, however, with a

paucity of data will have little choice than to adhere

rigidly to policies and fill their days with a treadmill of

operational tasks. Their roles are limited to that of an

enforcer, rather than one of a problem-solver.

Yet it is only possible when the credit manager

is empowered with information – a detailed

audit trail of when and how the customer has

responded to invoices and letters they have

been sent.

Collaborative Working

Most businesses uses some form of

collaborative working tool, from the simplest

instant messaging tools such as Slack and

Yammer to Teams, Sharepoint and Miro. These

tools encourage frequent, succinct exchanges

that are informal and spontaneous.

If you find yourself in the latter group, there is one

simple thing you can do to turn things around:

digitise. Put your AR and collections operations into

the cloud and the upshot will be a plentiful supply of

information and data that can be sliced, modelled and

analysed to deliver meaningful insights. And those

insights form the basis for the collaborative conversations

both within the business and with customers,

allowing credit managers to put forward tailor-made

credit solutions involving invoice finance, early payment

discounts, seasonally varied credit limits and

other such mechanisms.

High value work that drives strategic outcomes is

rewarding both in terms of job satisfaction company

profitability. It can unlock working capital and cement

loyalty from buyers.

Business tools that encourage frequent,

succinct exchanges that are informal and

spontaneous enable quick resolution. Which

is also how your interactions with buyers

should be.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 36 34


40

30

20

10

0

Item 1 Item 2 Item 3 Item 4

by Holly Scott-Donaldson

Head of Sales and Marketing at Data Interconnect

hollysd@datainterconnect.co.uk

They are browser-based and frictionless, which

is how your interactions with buyers could be.

How? By using an eInvoicing software platform

that has a self-service portal at its core.

Machine readable invoice formats accelerate

the interaction between supplier Accounts

Receivable and buyer Accounts Payable. They

allow the essential data to be absorbed more

easily into buyer AP systems for Purchase Order

matching, approval and subsequent settlement.

In the best-case scenario, EDI exchanges using

formats such as PEPPOL allow for a zero-touch

order-to-cash process, but when exceptions,

issues or disputes arise, interaction still needs

to be digital, which is where

the self-service portal

becomes invaluable.

Invoicing portals provide the browser-based

interface through which buyers can raise

issues, append documents such as PODs and

commence the process of collaboration

towards resolution. Open cases can be quickly

assigned to a colleague to ensure continuous

coverage during absences. Everything needed

to answer questions or resolve issues is easily

accessible , including a time-stamped audit trail

of all interactions. Colleagues can pick up a case

efficiently and work on it without a handover.

In fact, cases can be moved to different team

members at different stages of the process,

with collections experts focused on reducing

aged debt and AR specialists tasked with

handling invoice queries. Portals provide a

window on real-time and historical activity and

make it possible for teamworking focused on

improving key metrics instead of simply

managing a workload.

During periods of lockdown digital interaction

was all many businesses had. For some, this

caused a vital information gap, while for those

fortunate enough to be using software like

Corrivo, pure digital interaction continued to

serve up valuable insights that could be used to

develop agile and responsive strategies for

challenging times. With further lockdowns

seemingly inevitable, the case for investment in

AR is hastened. Even during the worst of times,

credit teams can be equipped to do their jobs

efficiently and effectively, bringing in the vital

funds their own companies need to weather

the economic storm. With the right tools, credit

managers can become the economic heroes

saving livelihoods, rather than lives.

Advancing the credit profession // www.cicm.com // Novemberw December 2020 // PAGE 37 35


PAYMENT TRENDS

Time to Buckle up?

The ups and downs of payment performance sees

some businesses doing better than others.

AUTHOR – Iona Yadallee

THE latest busines-to-business payment performance

figures show that businesses have been waiting a little

longer for invoices to be paid in October. There have

been slight increases to Days Beyond Term (DBT) across

UK business sectors and UK regions – the average DBT

for sectors and regions increased by 0.7 days and 0.1

days respectively.

These marginal increases, however, may detract from what

businesses in some sectors or regions are experiencing; some might

feel like they are starting to edge up to the main descent on their roller

coaster ride, while others may be enjoying a more gentle run with the

brake half applied. Either way, we don’t know what is around the next

bend and it doesn’t look like the full impact of the ongoing pandemic

has shown itself yet within the payment performance figures.

SECTOR SPOTLIGHT

The Water & Waste, Mining & Quarrying and Business from Home

sectors continue to vie for the unwanted position of highest DBT figure

in October. Water & Waste’s DBT continues to rise by 2.4 days (this

follows a rise of 13.8 days in September) which put it in the top spot

with an overall DBT of 24.4, followed by the Mining & Quarrying sector

– 22.7 days overall.

Not too far behind is the Business from Home sector, with an overall

DBT of 21.4 days, but hopefully the UK’s entrepreneurial spirit will

have been given a lift over the past few months as this figure climbs

down from the 32.2 days it experienced in August. While the Business

from Home sector is still the third worst hit sector, and sits head and

shoulders above the sector average of 15.9 DBT, it is encouraging to see

it falling for a second month – this time by 7.8 days for October.

Other significant reductions in DBT come from the Education sector

(-6.8 days) and Health & Social (-5.5 days). Education is another sector

heading in the right direction – with another drop of 6.8 days down to

13.6 DBT. More marginal reductions can also been seen across many

other sectors but DBT figures haven’t made it below 10 DBT just yet.

The highest increase in days is found in Other Services (which

includes everything from dry cleaners, hairdressers and businesses

offering beauty services through to computer and furniture repair

services and membership organisations, with a big jump of 7.1 days.

Public Administration also struggled, with an increase of 5.9 days to

its payment terms.

REGIONAL SPOTLIGHT

The regional standings continue to highlight the struggles of

Northern Ireland, which remains the worst performing region

with an overall DBT of 23 days following a further increase

of 3.2 days. The East Midlands has also struggled with late

payments, a sharp increase of 4.2 days means its overall DBT is

now standing at 20.1 days. However, it is worth noting that the

third worst performing region is the North West with 15.6 DBT,

which sits much closer to the regional average of 14.6.

On a more positive note, a number of regions have made

steady improvements to payment terms. The DBT figure for

East Anglia has fallen to 12.9 (-3.7), and so too has the South East

which now stands at 13.1 (-1.6) and Yorkshire & Humberside

at 14.2 DBT (-1.3). The best performing regions continue to be

the South West, despite a small increase (+0.4 days), with an

overall DBT of 11.1 days, and Scotland with 11.0 DBT (-0.6).

Written by Iona Yadallee, Deputy Editor.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 38


PAYMENT TRENDS

Data supplied by the Creditsafe Group

Top Five Prompter Payers

Region Oct 20 Change from Sept 20

Scotland 11 -0.6

South West 11.1 0.4

East Anglia 12.9 -3.7

Wales 12.9 -0.2

West Midlands 13 -0.1

Bottom Five Poorest Payers

Region Oct 20 Change from Sept 20

Northern Ireland 23 3.2

East Midlands 20.1 4.2

North West 15.6 0.1

Yorkshire and Humberside 14.2 -1.3

London 14 0.6

Getting Better

Business from Home -7.8

Education -6.8

Health & Social -5.5

Professional and Scientific -3

Wholesale and retail trade -2.8

Energy Supply -1

Business Admin & Support -0.9

Dormant -0.8

Entertainment -0.5

IT and Comms -0.5

Transportation and Storage -0.3

SCOTLAND

-0.6 DBT

Getting Worse

NORTHERN

IRELAND

3.2 DBT

NORTH

WEST

0.1 DBT

YORKSHIRE &

HUMBERSIDE

-1.3 DBT

Other Service 7.4

International Bodies 7.1

Public Administration 5.9

Financial and Insurance 5.4

WALES

-0.2 DBT

WEST

MIDLANDS

-0.1 DBT

EAST

MIDLANDS

4.2 DBT

LONDON

0.6 DBT

EAST

ANGLIA

-3.7 DBT

Agriculture, Forestry and Fishing 4.7

Hospitality 3.7

Manufacturing 2.8

Water & Waste 2.4

SOUTH

WEST

0.4 DBT

SOUTH

EAST

-1.6 DBT

Real Estate 2

Construction 1.8

Mining and Quarrying 1.6

Region

Getting Better – Getting Worse

-3.7

-1.6

-1.3

-0.6

-0.2

-0.1

4.2

3.2

0.6

0.4

0.1

East Anglia

South East

Yorkshire and Humberside

Scotland

Wales

West Midlands

East Midlands

Northern Ireland

London

South West

North West

Top Five Prompter Payers

Sector Oct 20 Change from Sept 20

Wholesale and retail trade 10 -2.8

Health & Social 10.3 -5.5

Entertainment 11.7 -0.5

Energy Supply 12.5 -1

Hospitality 12.7 3.7

Bottom Five Poorest Payers

Sector Oct 20 Change from Sept 20

Water & Waste 24.4 2.4

Mining and Quarrying 22.7 1.6

Business from Home 21.4 -7.8

Other Service 21.4 7.4

International Bodies 18.2 7.1

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 39


INTRODUCING OUR

CORPORATE PARTNERS

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

Corporate Partnership with the CICM, please contact corporatepartners@cicm.com

Onguard is a specialist in credit management

software and a market leader in innovative solutions

for Order to Cash. Our integrated platform ensures

an optimal connection of all processes in the Order

to Cash chain and allows sharing of critical data. Our

intelligent tools can seamlessly interconnect and

offer overview and control of the payment process,

as well as contribute to a sustainable customer relationship.

The Onguard platform is successfully used

for successful credit management in more than 50

countries.

T: 020 3868 0947

E: lisa.bruno@onguard.com

W: www.onguard.com

Satago helps business owners and their

accountants avoid credit risks, manage debtors

and access finance when they need it – all in

one platform. Satago integrates with 300+ cloud

accounting apps with just a few clicks, helping

businesses:

Understand their customers - with RISK INSIGHTS

Get paid on time - with automated CREDIT CONTROL

Access funding - with flexible SINGLE INVOICE FINANCE

Visit satago.com and start your free trial today.

T: 020 8050 3015

E: hello@satago.com

W: www.satago.com

The Company Watch platform provides risk analysis

and data modelling tools to organisations around

the world that rely on our ability to accurately predict

their exposure to financial risk. Our H-Score®

predicted 92 percent of quoted company insolvencies

and our TextScore® accuracy rate was 93

percent. Our scores are trusted by credit professionals

within banks, corporates, investment houses

and public sector bodies because, unlike other credit

reference agencies, we are transparent and flexible

in our approach.

T: +44 (0)20 7043 3300

E: info@companywatch.net

W: 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.

T: 0870 081 8250

E: emea-info@bottomline.com

W: www.bottomline.com/uk

Dun & Bradstreet Finance Solutions enable modern

finance leaders and credit professionals to improve

business performance through more effective risk

management, identification of growth opportunities,

and better integration of data and insights

across the business. Powered by our Data Cloud,

our solutions provide access to the world’s most

comprehensive commercial data and insights

supplying a continually updated view of business

relationships that help finance and credit teams

stay ahead of market shifts and customer changes.

T: (0800) 001-234

W: www.dnb.co.uk

Chris Sanders Consulting (Sanders Consulting

Associates) has three areas of activity providing

credit management leadership and performance

improvement, international working capital

improvement consulting assignments and

managing the CICMQ Best Practice Accreditation

programme on behalf of the CICM. Plans for

2019 include international client assignments in

India, China, USA, Middle East and the ongoing

development of the CICMQ Programme.

T: +44(0)7747 761641

E: chris@chrissandersconsulting.com

W: www.chrissandersconsulting.com

With 130+ years of experience, Graydon is a leading

provider of business information, analytics, insights

and solutions. Graydon helps its customers to make

fast, accurate decisions, enabling them to minimise

risk and identify fraud as well as optimise opportunities

with their commercial relationships. Graydon

uses 130+ international databases and the information

of 90+ million companies. Graydon has offices in

London, Cardiff, Amsterdam and Antwerp. Since 2016,

Graydon has been part of Atradius, one of the world’s

largest credit insurance companies.

T: +44 (0)208 515 1400

E: customerservices@graydon.co.uk

W: www.graydon.co.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.

T: +44 (0)207 469 2577 /

E: uksales@tinubu.com

W: www.tinubu.com.

Operating across seven UK offices, Menzies LLP is

an accountancy firm delivering traditional services

combined with strategic commercial thinking. Our

services include: advisory, audit, corporate and

personal tax, corporate finance, forensic accounting,

outsourcing, wealth management and business

recovery – the latter of which includes our specialist

offering developed specifically for creditors. For

more information on this, or to see how the Menzies

Creditor Services team can assist you, please

visit: www.menzies.co.uk/creditor-services.

T: +44 (0)2073 875 868 - London

T: +44 (0)2920 495 444 - Cardiff

W: menzies.co.uk/creditor-services

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 40


Each of our Corporate Partners is carefully selected for

their commitment to the profession, best practice in the

Credit Industry and the quality of services they provide.

We are delighted to showcase them here.

THEY'RE WAITING TO TALK TO YOU...

Hays Credit Management is a national specialist

division dedicated exclusively to the recruitment of

credit management and receivables professionals,

at all levels, in the public and private sectors. As

the CICM’s only Premium Corporate Partner, we

are best placed to help all clients’ and candidates’

recruitment needs as well providing guidance on

CV writing, career advice, salary bench-marking,

marketing of vacancies, advertising and campaign

led recruitment, competency-based interviewing,

career and recruitment trends.

T: 07834 260029

E: karen.young@hays.com

W: www.hays.co.uk/creditcontrol

The Atradius Collections business model is to support

businesses and their recoveries. We are seeing a

deterioration and increase in unpaid invoices placing

pressures on cashflow for those businesses. Brexit is

causing uncertainty and we are seeing a significant

impact on the UK economy with an increase in

insolvencies, now also impacting the continent and

spreading. Our geographical presence is expanding

and with a single IT platform across the globe we can

provide greater efficiencies and effectiveness to our

clients to recover their unpaid invoices.

T: +44 (0)2920 824700

W: www.atradiuscollections.com/uk/

Shoosmiths’ highly experienced team will work

closely with credit teams to recover commercial

debts as quickly and cost effectively as possible.

We have an in depth knowledge of all areas of debt

recovery, including:

• Pre-litigation services to effect early recovery and

keep costs down • Litigation service • Insolvency

• Post-litigation services including enforcement

As a client of Shoosmiths, you will find us quick to

relate to your goals, and adept at advising you on the

most effective way of achieving them.

T: 03700 86 3000

E: paula.swain@shoosmiths.co.uk

W: www.shoosmiths.co.uk

Forums International has been running Credit and

Industry Forums since 1991 covering a range of

industry sectors and international trading. Attendance

is for credit professionals of all levels. Our forums

are not just meetings but communities which

aim to prepare our members for the challenges

ahead. Attending for the first time is free for you to

gauge the benefits and meet the members and we

only have pre-approved Partners, so you will never

intentionally be sold to.

T: +44 (0)1246 555055

E: info@forumsinternational.co.uk

W: www.forumsinternational.co.uk

Data Interconnect provides ERP-agnostic AR

software. The Corrivo platform transmits invoices

in multiple formats using tax compliant templates

custom-designed for your business. Corrivo expedites

collections, reconciliation and dispute processes with

flexible workflow tools for creating and assigning tasks,

limits, chase paths or stops and a self-service portal

where customers can query, comment, dispute or pay.

Corrivo manages data securely and efficiently so that

you can manage your customers and cashflow better.

T: +44 (0)1367 245777

E: sales@datainterconnect.co.uk

W: www.datainterconnect.com

Serrala optimizes the Universe of Payments for

organisations seeking efficient cash visibility

and secure financial processes. As an SAP

Partner, Serrala supports over 3,500 companies

worldwide. With more than 30 years of experience

and thousands of successful customer projects,

including solutions for the entire order-to-cash

process, Serrala provides credit managers and

receivables professionals with the solutions they

need to successfully protect their business against

credit risk exposure and bad debt loss.

T: +44 118 207 0450

E: contact@serrala.com

W: www.serrala.com

American Express® is a globally recognised

provider of business payment solutions, providing

flexible capabilities to help companies drive

growth. These solutions support buyers and

suppliers across the supply chain with working

capital and cashflow.

By creating an additional lever to help support

supplier/client relationships American Express is

proud to be an innovator in the business payments

space.

T: +44 (0)1273 696933

W: www.americanexpress.com

C2FO turns receivables into cashflow and payables

into income, uniquely connecting buyers and

suppliers to allow discounts in exchange for

early payment of approved invoices. Suppliers

access additional liquidity sources by accelerating

payments from buyers when required in just two

clicks, at a rate that works for them. Buyers, often

corporates with global supply chains, benefit from

the C2FO solution by improving gross margin while

strengthening the financial health of supply chains

through ethical business practices.

T: 07799 692193

E: anna.donadelli@c2fo.com

W: www.c2fo.com

Esker’s Accounts Receivable (AR) solution removes

the all-too-common obstacles preventing today’s

businesses from collecting receivables in a

timely manner. From credit management to cash

allocation, Esker automates each step of the orderto-cash

cycle. Esker’s automated AR system helps

companies modernise without replacing their

core billing and collections processes. By simply

automating what should be automated, customers

get the post-sale experience they deserve and your

team gets the tools they need.

T: +44 (0)1332 548176

E: sam.townsend@esker.co.uk

W: www.esker.co.uk

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 41


INTRODUCING OUR

CORPORATE

PARTNERS

For further information and to discuss the

opportunities of entering into a Corporate

Partnership with the CICM, please contact

corporatepartners@cicm.com

HighRadius is a Fintech enterprise Software-as-a-Service

(SaaS) company. Its Integrated Receivables platform

reduces cycle times in the Order to Cash process through

automation of receivables and payments across credit,

e-invoicing and payment processing, cash allocation,

dispute resolution and collections. Powered by the RivanaTM

Artificial Intelligence Engine and Freeda Digital

Assistant for Order to Cash teams, HighRadius enables

more than 450 organisations to leverage machine

learning to predict future outcomes and automate routine

labour intensive tasks.

T: +44 7399 406889

E: gwyn.roberts@highradius.com

W: www.highradius.com

‘‘

CICM offered the

prospect of qualifications,

but as soon as I became

a member, loads of other

opportunities came to

light that I hadn’t initially

realised were available.

Molly Kane

ACICM

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.

T: +44 (0) 1302 513 000

E: sales@keyivr.com

W: www.keyivr.com

Building on our mature and hugely successful

product and world class support service, we are

re-imagining our risk awareness module in 2019 to

allow for hugely flexible automated worklists and

advanced visibility of areas of risk. Alongside full

integration with all credit scoring agencies (e.g.

Creditsafe), this makes Credica a single port-of-call

for analysis and automation. Impressive results

and ROI are inevitable for our customers that also

have an active input into our product development

and evolution.

The value

of CICM

membership

Molly Kane ACICM

Senior Credit Controller Executive

Stuart Delivery Ltd

Read more about her story and join your

credit community by visiting:

www.cicm.com/value-of-cicm-membership/

T: 01235 856400

E: info@credica.co.uk

W: www.credica.co.uk

info@cicm.com

www.cicm.com

01780 722900

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 42


PANEL BASHERS

BAD LOGIC

We ask a panel of credit management experts to

answer some of our reader’s biggest questions.

Someone told

me recently that

achieving zero

bad debts was not

necessarily a good

thing? Why would

this be the case?

Panellist

Mark Greatorex

MCICM(Grad)

MARK GREATOREX

Mark Greatorex a graduate member of the CICM and has

worked in B2B credit environments for over 20 years.

Approximately 12 of those years were in management roles

for L’Oréal, Lafarge (Later becoming Tarmac) and ATS

Euromaster (Part of the Michelin group). His experience

includes all aspects of the order to cash process and also

expanded into accounts payable when he took responsibility

for the function as part of a wider transactional finance

role. Since 2019 he has been running his own consultancy

concentrating on process and performance improvement

within order to cash and procure to pay.

WHEN working in credit it can be easy to fall

into the trap of targeting zero bad debts. I’ve

seen many credit managers take one look at

the credit report of a potential customer and

refuse to give them credit terms because

they appear a little too risky.

Make no mistake, as a credit manager you are not there to

gamble with your company’s finances, but you should be taking

calculated risks that align with the company’s strategic goals.

A credit manager’s role is not to simply ensure that every invoice

is paid in full and on time or that only the most credit worthy

customers are accepted. Your purpose is to align yourself with the

strategic direction of your company and react accordingly.

I previously worked with a company who had a strong position

in the market, providing something unique which could not be

purchased elsewhere. They knew their market dominance and

therefore were averse to taking any credit risk. They only wanted to

offer short terms, were quick to have directors’ guarantees signed

and would stop supplies as soon as an invoice became overdue.

Whilst the company didn’t achieve zero bad debts, they certainly

came close. The offset was that they undoubtedly missed out on

sales with potential customers who didn’t meet the strict policy

for granting credit. They understood and accepted this trade off.

Let me contrast this with a very different approach. I met with

the Managing Director of a company which was one of the biggest

in its market. However, by his own admission he had no way to

differentiate his physical product from any of his competitors.

Instead he relied on the overall service offer around the product

to help them stand out and win business. Despite their size in the

market, he had clear and aggressive growth plans. He had a good

understanding of credit risk, was prepared to push boundaries

and was able to have sensible balanced discussions about the

level of risk that was appropriate.

This is where credit managers can come into their own. It’s easy

to say ‘No’ but if you are at odds with business goals then life will

become a battle and the credit department will quickly live up to

the ill-informed stereotype of sales prevention. Modern thinking

credit managers have moved on. They align closely with the

sales and commercial teams and offer solutions to help achieve

business objectives by providing input into a balanced risk and

reward analysis.

The nature of taking this calculated risk is that sometimes it will

go wrong, and the business will incur a bad debt. Communicating

effectively during the decision-making process and throughout

the lifecycle of a customer allows everyone to understand and

make decisions on this level of risk sooner rather than later.

In summary, I’ll leave you with these questions: Are you fully

aware of your company’s objectives? More importantly, are you

adapting your credit decisions and communication to meet these?

In short, are you prepared to make and stand by the decisions

which might just give your company an opportunity to grow?

If you’d like to join our panel of experts, or

if you have a question to ask, contact the

editor at sfeast@gravityglobal.com

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 44


PANEL BASHERS

Panellist Nigel Fields

FCICM

NIGEL FIELDS

A career in credit management spanning more than 30 years, Nigel is now

a senior consultant with a new start-up company, TheBossCat.com, which

provides knowledge, skills and various services to a wide range of businesses.

Nigel spent 20 years working for Twentieth Century Fox International

Film Corp. starting out in its UK business as Credit Manager and rising to

Executive Director for Credit, responsible for Order to Cash (O2C) across

Fox’s entire international business portfolio. Prior to Fox, he worked as the

Credit Manager at Hornby Hobbies and a Credit Controller for GEC. Nigel

says: “I attribute much of my career success to the CICM community where I

am always able to draw upon knowledge and skills from the extensive array

of members and partners.”

LET me provide a true example

of when a business happily

wrote off £200,000 of ‘Bad

Debt’ and by doing so, made a

profit exceeding £1m.

The objective of most

businesses is generally to sell products or

services for a profit. A professional credit

manager, therefore, needs to understand

the company’s profitability from sales

compared to credit risks. This goes beyond

general customer risk profiling (although

still incredibly important). It makes the

credit manager a good commercial business

partner who helps make profitable sales

even when customers might be considered

‘high risk’ or not creditworthy. The

important thing is to understand the risk

versus reward and find ways to mitigate

against true risk exposure.

Assessing credit risk requires us to model

the probability of a customer defaulting in

full, or in part, on their obligation. This

involves a decision either (A) to extend

credit, which provides a reward but entails

a risk, or (B) to refuse credit. It should also

consider when a default is likely.

So, what am I saying here? This is a true

example where a customer’s credit grade

became ‘high risk’ and potential insolvency.

Many of their suppliers decided to stop

trading with them and so provided an

opportunity to sell more products knowing

the risks. Continuing supply also assisted

the customer to continue trading and

giving them the opportunity to try and turn

their business around. A big driver here

is to understand the profitability of what

was being sold to allow yourself to build

a framework and visualise the ‘true’ value

at risk against the potential reward. Being

a supplier that supports their customers in

a difficult situation allows for more open

communication to gain better insights into

their operations. It also helps to get a better

view about when any insolvency might

happen in order to better manage the risk.

This customer agreed to some shorter

payment terms (that were strictly managed).

My business agreed to a maximum level of

credit exposure and then reserved for it. In

the example below, this customer traded

for a further 18 months, thus continuing to

pay staff and their suppliers.

The customer purchased approx.

£200,000 of products every month and our

profit from this was about £80,000 every

month. Our biggest risk was in Month 1 for

our £120,000 COS. You can see that over the

18 months we traded, our cumulative profit

was £1.24m against the ongoing monthly

stake of £120,000.

We actually recovered additional

sums using our retention of title

clause following the eventual

customer insolvency. I can say that

we were incredibly happy to write

off this large bad debt. Some credit

managers may still consider this

as poor credit management, but I

completely disagree.

Month Invoice Value Paid Invoices Cost of Goods Profit Cum Proft

1 £200,000 -£200,000 -£120,000 £80,000 £80,000

1 £200,000 -£200,000 -£120,000 £80,000 £160,000

1 £200,000 -£200,000 -£120,000 £80,000 £240,000


..........and continuing weekly

16 £200,000 -£200,000 -£120,000 £80,000 £1,280,000

17 £200,000 -£200,000 -£120,000 £80,000 £1,360,000

18 £200,000 £0 -£120,000 -£120,000 £1,240,000

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 45


presents
























www.ddisoftware.co.uk

sales@ddisoftware.co.uk


EDUCATION & MARKETING

CICM Virtual Training is an ‘access anywhere’ range of interactive, online training

courses, designed to give you the skills and tools you need to thrive in your credit

work. Each training course offers high quality approaches to credit-related topics, and

practical skills that can be used in your workplace. A highly qualified trainer, with an

array of credit management experience, will guide you through the subject to give you

practical skills, improved results and greater confidence.

These are pre-recorded training

sessions that you can access

anywhere and at anytime. Short,

sharp and to the point – these suit

you if you are short on time, or need

a quick introduction or update on a

subject.

These are live, interactive sessions,

delivered virtually by a qualified trainer,

experienced in the subject. Through

a series of tasks and discussions, you

will access a hands-on training session

that offers the best practice approach to

essential credit and debt skills.

MEET YOUR TRAINER: Jules Eames FCICM(Grad); PGCE, is a qualified teacher,

trainer and credit manager with experience in credit and debt specialisms across the

O2C spectrum and ancillary businesses, in consumer, B2B and export markets.

INTRODUCTORY PRICE £90.00+VAT per person. For group training, please contact info@cicm.com

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 47


MARKETING & EDUCATION

CICM Redundancy

help and advice

CICM is here to help anyone at risk

of redundancy or looking for work.

We have all the guides and advice

you need to help you back on your feet.

HELP AND

ADVICE

TOOLS TO HELP

YOU BACK TO WORK

For further details contact: 01780 722900 | www.cicm.com | info@cicm.com

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 48


BRANCH NEWS

Standing out from the Crowd

East of England Branch

IN the latest CICM East of

England Branch webinar,

‘Standing Out from the Crowd –

How to Ace an interview – Key

Business Questions and How

to Answer Them,’ two expert

recruitment specialists and Branch

members – William Plom of Hays and

Chris Parker of Goodman Masson – gave

plenty of ideas, advice, tips and food for

thought for those about to undertake an

interview.

The webinar, which was held on 28

October, reminded attendees of the

importance of really knowing your CV

and its contents, including being able

to discuss and explain any metrics

and targets quoted. Will and Chris

also emphasised the importance of

preparation and key information that you

should endeavour to find out about the

company in advance of an interview.

They talked through the STAR

interview technique approach (Situation

Task Action and Result), suggesting

writing down three or four work

experience questions and considering

how you would tailor your answers to any

questions.

Many examples of typical interview

questions were given, such as describing

your strengths and weaknesses, your

career goals, where you see yourself in

five years time etc; tips and suggestions

on the best ways to answer such

questions were talked through, and it was

recommended that you should come up

with three good reasons why a company

should hire you.

We hope that our Branch members,

members of other Branches, and those

interested in joining CICM, found our

latest webinar helpful and informative.

The Branch Committee would like

to thank CICM HQ and both of our

speakers.

You can watch a recording of this

latest webinar on the East of England

Branch page via the CICM website. Also

on the Branch page of the CICM website

is the previous ‘Standing out from the

Crowd – Employment Tips for Students

through to Credit Professionals in a

Difficult Climate’ webinar, which was

held in August.

Author: Richard Brown, CICM East of

England Branch Vice Chairman.

MANAGING THE NEW

CREDIT FUTURE

Prepare and act now, for the

Credit world of tomorrow.

As the world continues to react to constant change, our

credit profession needs to prepare for the new credit future.

Debt management

• Adjust collections and recovery strategies to fit the changing financial environment

• Use KYC ‘know your customer’ to understand the customers in true financial difficulty

• Focus skilled staff on long term management of aging debt with a propensity for resolution

• Remove ‘uneconomical to collect’ debt from ledger via third party action, sale or write off

Employees

• Upskill staff for a new credit future through training and qualification programmes

• Review and bolster support mechanisms that cater for the wellbeing of employees

• Consult and trial agile working arrangements with touch points to check feasibility

Cash resilience

• Firm up honest and realistic cash forecasting projections and review them frequently

• Tighten processes for quick & efficient cash collection, allocation and recovery referral

• Calculate provision for bad and doubtful debt & review validity and value of securities

• Agree new risk assessment protocols for ledger-wide vetting of new and existing customers

• Review and strengthen supply chain, renegotiating contract terms in the new climate.

Future proof strategies

• Fine-tune the exit strategy, showing a roadmap of short, mid and long-term objectives

• Align Credit Policy, processes, KPIs and contingencies to the organisation’s new risk strategy

• Check processes are in place to allow for new and future flexible ways of operating

• Secure debt and ledger management software to automate manual tasks

Communication

• Maintain Senior Management visibility with short, frequent reports linked to overall objectives

• Reaffirm supply chain relationships with bespoke contact that builds plans for future trading

• Hold staff e-meetings briefly and often to focus WFH and office-based staff in a common goal

• Create cross functional work plans with re-emerging departments, to leverage help

01780 722900 | info@cicm.com

Access help from CICM

Follow the CICM Managing the New Credit

Future Forum on LinkedIn.

Access our Member Advice Service

for support, answers and advice.

Visit our Managing the New Credit Future

webpage for more resources

We continue to develop resources, advice and tools to help you prepare for

tomorrow’s Credit, today. Stay in touch with us and be part of our community.

CICM is your professional body: use it. We are stronger in numbers.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 49


HR MATTERS

FLUID THINKING

WhatsApp, criminal disclosures, and gender fluidity.

ARE social media messages

always private? Not

according to BC and

others v Chief Constable

Police Service of Scotland

(PSS) and others. Here the

Court of Session considered the inclusion

of personal WhatsApp messages in an

investigation into alleged breaches of

professional standards.

During an investigation into sexual

offences at PSS, offensive group chat

WhatsApp messages were discovered

on an officer's smartphone. They were

passed to the Professional Standards

Department within the PSS, and the

officers party to the group chat were

accused of misconduct.

The officers argued that using personal

WhatsApp messages to bring misconduct

proceedings against them was a breach

of their human rights, in particular their

right to privacy. Under Article 8 of the

European Convention on Human Rights,

everyone has a right to respect for their

private and family life, their home and

their correspondence. Public authorities

cannot interfere with this except in

AUTHOR – Gareth Edwards

Proposals on disclosure of certain spent convictions

AS part of its continuing efforts to review

the criminal records disclosure regime,

the Government is proposing to reduce

the time before certain convictions

become spent.

Currently, sentences between one and

four years become spent after a further

four to seven years respectively and

sentences of more than seven years are

never spent. The new proposals would

mean that adult custodial sentences of

up to one year would become spent after

12 months from the end of the sentence

(six months where the person was under

18 when sentenced). Adult custodial

sentences of between one and four years

would become spent after four years

from the end of the sentence (two years

where the person was under 18 when

sentenced). Adult custodial sentences of

more than four years would become spent

after seven years from the end of the

sentence (three-and-a-half years where

the person was under 18 when sentenced).

accordance with the law and where

necessary in the interests of public safety,

the prevention of crime and the protection

of the health, morals and rights of others.

The court considered whether the

officers had a reasonable expectation

of privacy and found they did not. Their

right was limited by their duties under the

professional standards for police, which

even applied when officers were off

duty. The court found that, in joining the

force, the officers accepted their right

to privacy was limited as per their

professional standards, so that if they acted

in a way that contravened those standards,

they could not have an expectation of

privacy.

For individuals who are subject to

professional standards, this case suggests

there will be limits on the right to keep

messages sent on personal accounts

private. For other individuals, a balancing

exercise should be carried out, taking

into account the particular circumstances

including how a message was brought to

the employer's attention, before deciding

whether to include it in a workplace

investigation.

Once an offence becomes spent it

will no longer show on a basic DBS

disclosure certificate. It will also no

longer be disclosable by a job applicant

on an application form or in response to

a question during interview. However,

spent convictions will still show in

standard and enhanced DBS checks

unless they have been filtered according

to DBS rules. Serious sexual, violent and

terrorist offences will never be spent or

filtered.

Gender-fluid and non-binary workers protected

IN a judgement that breaks new ground,

the Birmingham Employment Tribunal

has found that protection of non-binary

and gender-fluid people falls within the

scope of gender reassignment under the

Equality Act.

Ms Taylor, who had worked at Jaguar

Land Rover for more than 20 years, began

identifying as gender-fluid in 2017. Taylor

suffered insults and abusive jokes from

colleagues when she began dressing

in women's clothes and also suffered

difficulties using toilet facilities and a

lack of support from management.

Taylor successfully argued that she

was constructively dismissed and

suffered harassment, victimisation

and discrimination because of gender

reassignment and sexual orientation.

Under s7 of the Equality Act, a person

has the protected characteristic of gender

reassignment if they are ‘proposing to

undergo, is undergoing or has undergone

a process (or part of a process) for the

purpose of reassigning the person's sex by

changing physiological or other attributes

of sex.’

The Tribunal described gender as a

spectrum and ruled that it is beyond

doubt that Taylor was protected by

s7 as undergoing a process of gender

reassignment is a personal journey by

which an individual moves away from

their birth sex.

This is a first instance decision (and

so not binding on other Tribunals). It is

being described as a milestone moment

of which employers should take note.

Gareth Edwards is a partner in

the employment team at

VWV.gedwards@vwv.co.uk

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 51


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

contact: cicmmembership@cicm.com

CICM launch critical

AR Fact Sheets

for EMEA countries

Powered by

Powered by Baker Ing, country specific factsheets

provide up-to-date information on payment

performance, legislation, and the effects of COVID-19

and Brexit. Designed for the credit professional, they

cover legal business forms, credit risk data, collections

protocols, enforcement and more.

Credit professionals need granular knowledge of the

situation in their clients’ territories. Whether you need

an off-the-peg checklist for dealing with a new country,

or you need on-the-spot information to help review

risk strategies and Credit Policies, these insightful

documents will help.

Powered by

EU Factsheet

COVID-19 RESPONSE

Powered by

Germany has introduced a raft of measures and programmes to help combat the

economic impact of COVID-19 containment measures. Here we present what we

consider to be the most significant and interesting. This section is not exhaustive.

Loans and grants – employees:

Three main tranches of wage subsidy have been introduced.

The most wide-reaching is “Kurzarbeit”. This programme existed before COVID-19.

It is a social security programme whereby the government will subsidy employees’

wages up to 60% (more for those with children) in order to allow their employers to

reduce their hours (and their expenditure on wages) instead of laying them off.

Under COVID provisions, the subsidy has been increased. From the fourth month,

the rate is increased to 70% of flat-net renumeration for those households without

children and 77% for those households with children. From the seventh month, it is

increased to 80% for those households without children and 87% for those

households with children. In September, there was a decree to make this benefit

more flexible (e.g., reducing the minimum number of employees effected by

working hours reduction to 10% for the business the qualify) and to extend the

period for receiving this benefit from 12 to 24 months until 31 st December 2021.

Pre-Litigation

Extended ROT; Assigned to the supplier in advance. In accordance with §354a

of the Commercial Code, an advance assignment is effective despite a nonassignment

agreement between the purchaser and any third parties.

Letter before action. Do you have to send a demand letter to a debtor before

going to court?

Freelance artists in Germany can access funds if they work for cultural institutions

funded by the Federal Government. They will be compensated for up to 60% o fees

from cancelled events up to €1,000 and 40% up to €2,500.

Students can access interest-free loans of up to €650 per month for jobs lost due to

the pandemic.

Loans and grants – businesses:

EU Factsheet

GERMANY

As well as the enhanced terms of “Kurzarbeit”, there are a variety of direct loans

and grants available which businesses of different sizes can access.

A grant of up to €150,000 / 80% of fixed costs in the subsidy period is available for

businesses showing decreased sales volumes compared to the same month of the

previous year. This Federal Government grant has been supplemented by some

Federal States’ own grant programmes.

Powered by

Before going to court, and even before filing the claim to the enforcement

authority, a warning notice to the debtor's registered address is

mandatory.

The warning notice should contain;

o The name of the creditor and the basis of the claim

o The total amount of the claim, including any penalty interests

o Prescription on how to transfer the payment, i.e. bank account etc.

o A warning that the claim will be enforced through the enforcement

authority in case the claim is not settled within from the date of the

notice

o Information on how the object to the claim if not acknowledged be

the debtor.

If this measure has been taken and the payment still has not been made after

the two-week notice period (according to the law), the creditor may file for

enforcement.

It is worth noting that, in Germany, you may be ordered to all pay court fees if

you did not send a warning letter to the debtor prior to issuing

proceedings.

Look out for the first AR Factsheet,

coming to the CICM website soon.

CHARTERED

BAKERING.GLOBAL CHARTERED INSTITUTE OF CREDIT MANAGEMENT

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 52


CAREERS ADVICE

Positivity wins

Proving your value in an uncertain world of work

AUTHOR – Karen Young

IF you have continued working

throughout the pandemic, the

uncertainty that has swept

through our world of work might

have left you feeling like you

need to prove yourself in your

job. This has been exacerbated by the

rapid shift to remote working, which has

left many experiencing the feeling of

‘presenteeism’.

Failing to manage this the right way

can leave you feeling overwhelmed,

overworked and burned out. Proving

yourself should mean proving your value,

not how late into the night you work or

how many tasks you are juggling at one

time. Here’s my advice on how to put your

efforts into the right focuses and prove

your value in a world of work riddled with

change and uncertainty.

FIND YOUR PLACE IN THE BIG

PICTURE

It’s hugely valuable to get an

understanding of how your organisation

is changing due to the pandemic and

what your role is in this. Start a discussion

with your manager or a senior leader

about how the strategic objectives of your

organisation may be changing, how your

current role may evolve, and importantly,

how you can personally prepare for this.

By taking this pre-emptive approach, you

will get a better understanding of where

to put your efforts and where your value

will be most felt. You’re also telling your

employer that you are willing to grow and

develop – which puts you in good stead for

taking on new and exciting opportunities

in the future.

MAINTAIN YOUR VISIBILITY

As we transition to hybrid ways of

working where time is split between

offices and home, you may find it more

difficult to increase your ‘visibility’

among your teammates. If

you aren’t doing so already,

routinely and regularly

communicate with your manager and

colleagues to inform them about specific

projects you are working on or any

challenges that you may be facing and

key milestones or achievements you

have delivered. Celebrating successes

also helps you stay noticed, so become

comfortable with a little self-promotion.

Equally, highlight great work from your

colleagues because they will do the

same for you. During challenging and

changing times, celebrating successes is

particularly important and shines a light

on the value you and your colleagues

provide.

If you say ‘no’ in the

right way to things

which you don’t

see as advantageous

or within your

capacity, you will

gain respect and

further establish your

value among your

colleagues.

NETWORK INTERNALLY

Identify some key individuals in your

organisation who impact you – and who

you have an impact on. This is likely to

span all the way from the top of your

organisation to graduates, apprentices

and new starters. Then, think

about your relationship with

these individuals and how

you might be able to grow

this for the purposes of your

own and their development.

Consider whether there is

anyone who could act as your

mentor, or if there is

someone to whom you

could help by offering advice. Networking

in your business is a vital part of fuelling

your progression and raising your profile,

so don’t hesitate to reach out to people,

even if remotely.

LEARN TO SAY ‘NO’

Proving your value will not happen by

saying ‘yes’ to every project and task which

comes your way. While wanting to expand

your skills and grow professionally is

only a positive thing, you also need to

strategically manage your career and

build your successes in order to move in

your chosen direction. Plus, saying ‘yes’ to

too many projects will quickly overwhelm

and frustrate you. If you say ‘no’ in

the right way to things which you don’t

see as advantageous or within your

capacity, you will gain respect and

further establish your value among your

colleagues.

RADIATE POSITIVITY

A positive and optimistic attitude has

never been needed more than it is now.

Positivity gets people through challenging

times and helps individuals and teams

thrive, not just in their jobs but in all

aspects of their lives. Be mindful of the

language that you use at work and whether

it could be interpreted negatively. Ask

yourself: how do I talk to my teammates

each day? Do I gossip about my coworkers?

Aim to spread positivity to the

people you work with because it really is

contagious and goes a long way to making

people (including yourself) feel valued.

When things get tough as they have for

a lot of people as a result of the pandemic,

working ‘smarter’ and not ‘harder’ can be

tricky to navigate. But putting the above in

place should get you on the way to striking

the right balance and, as a result, making

you more valuable to your colleagues and

your organisation.

Karen Young is Director at Hays Credit

Management.

Celebrating successes also helps you stay

noticed, so become comfortable with a little

self-promotion. – Karen Young

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 53


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NEW AND UPGRADED MEMBERS

Do you know someone who would benefit from CICM membership? Or have

you considered applying to upgrade your membership? See our website

www.cicm.com/membership-types for more details, or call us on 01780 722903

Member

Simon Armitage MCICM

Jana Healey MCICM

Michael Higgins MCICM

Member (by exam)

Jane Leighton MCICM

Konstantinos Lekkas MCICM

Philip Medland MCICM

Graham Muir MCICM

Ellisa Thompson MCICM

Sarah Varney MCICM

Matthew Hind MCICM Sarah Peacock MCICM Maxine Welford MCICM

Studying Member

Lauren Ashton

Austin Bishop

Kim Bliss

Tracy Boyd

Andrew Brown

David Brown

Richard Carter

Jack Cartwright

Beatrice Chauveau

Lisa Connell

Rupan Deb

Nihan Ergin Gurses

Vincent Fransolet

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Affiliate

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Associate

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Upgraded member

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Congratulations to our current members who have upgraded their membership

Colin Sanders FCICM Ian Jamieson FCICM Tariq Bhatti FCICM Robert Clarkson FCICM

AWARDING BODY

Congratulations to the following, who successfully achieved Diplomas

Level 3 Diploma in Credit Management (ACICM)

NAME

Cristina Radulescu

Level 3 Diploma in Credit & Collections (ACICM)

NAME

Donna Wilson Benjamin Holdsworth Olivia Ionescu

WE WANT YOUR BRANCH NEWS!

Get in touch with the CICM by emailing branches@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.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 55


TAKE CONTROL OF

YOUR CREDIT CAREER

O2C MANAGER

London/remote working, c.£55,000

A rare opportunity has arisen at a global consultancy for a

highly experienced order to cash (O2C) manager, on a 12 month

fixed-term contract. Working closely with the Head of Finance,

professional services and sales functions, you will focus on the

efficient and accurate delivery of the end-to-end O2C process.

This includes from order entry, provision of service license, billing,

credit management and customer query resolution. Based in

London, you will also be able to work remotely. Ref: 3883248

Contact Mark Ordoña on 07565 800574

or email mark.ordona@hays.com

SENIOR CREDIT CONTROLLER

Crawley, £30,000-£35,000 + bonus + benefits

An excellent opportunity for a progressive credit professional to

join a growing business has become available. Reporting to the

CICM Qualified Manager, you will lead a small team on a daily basis

and assist with all aspects of running a busy credit department.

This role is ideal for either a senior credit controller looking to step

up into a leadership position, or credit professional with some

leadership experience who is keen to develop in a team leader role.

Ref: 3869017

Contact Natascha Whitehead on 0777 078 6433

or email natascha.whitehead@hays.com

OPERATIONS FINANCE MANAGER

Leicester, £35,000-£40,000

An opportunity has arisen at a national organisation to become the

operations finance manager. You will manage a team of over 20

transactional finance professionals, supporting the Head of Finance

to lead, manage and develop the operational finance function.

You will be required to promote, deliver and develop finance best

practice and customer-focussed services, through strong and

effective management of resources with performance standards

and targets. Ref: 387536

Contact Christopher Trenfield on 0116 251 1818

or email christopher.trenfield@hays.com

CICM CREDIT TRAINER

Nationwide/remote working, £30,000-£35,000

A great opportunity has become available for candidates with

credit management experience, who are able to present,

articulate and deliver training programs to educate and inspire

credit professionals around the UK promoting best industry

practice. The position is a permanent role with flexible, part time

hours available. Head Office is based in Leicestershire, and with

clients located around the UK, your own transport is essential.

Ref: 3882096

Contact Christopher Trenfield on 0116 251 1818

or email christopher.trenfield@hays.com

hays.co.uk/creditcontrol

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 56


INSPIRE ME IN THE

NEW ERA OF WORK

Your resource hub for reaching

your career goals

Read our latest guides and articles

Tips to help you prepare successfully

To find out more visit

hays.co.uk/embrace-the-new-era

REVENUE CONTROLLER

Cheltenham, up to £28,000 DOE

A leading law firm which focuses on media, entertainment and

technology is looking for a revenue controller to join its team.

The objective of the role is to drive cash into the business as

quickly as possible by managing the working capital cycle of

client matters and financial risk. To be successful, you will have

experience as a credible revenue controller working in a law firm or

professional services environment, that can hit the ground running

in a target driven environment. Ref: 3864009

Contact Edward Kennedy on 01242 226227

or email edward.kennedy@hays.com

CREDIT CONTROLLER (B2C)

London, £25,000-£27,000

A credit controller position has become available at a private

medical company in the heart of London. Working in the patient

billing side of the business chasing outstanding payments, you

will therefore have day-to-day contact with the patients, ensuring

the delayed payments are proceeded. To be successful, business

to consumer experience, confidence using Excel and being

comfortable with high volumes of incoming calls are essential.

Ref: 3881947

Contact Rebecca Hutton on 0116 251 1818

or email rebecca.hutton@hays.com

This is just a small selection of the many opportunities we

have available for credit professionals. To find out more visit

us online or contact Kabir Gulabkhan, Hays Credit Management

UK Lead on 020 3465 0020

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 57


www.cicm.com

‘‘

Since being a

member I am kept

updated on latest changes

to laws and regulations,

good governance and

not forgetting the

wealth of knowledge.

Laural Jefferies, FCICM

The value

of CICM

membership

Laural Jefferies, FCICM

Head of Accounts Receivable,

Fashion Edge Ltd

Read more about her story and join your

credit community by visiting:

www.cicm.com/value-of-cicm-membership/

info@cicm.com

www.cicm.com

01780 722900

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 58


WHAT'S ON

We are asking all members to invite a colleague to a CICM membership event,

free of charge. Book online on our website www.cicm.com/cicm-events

Studying at a

distance

with CICM

From interactive virtual classrooms to supporting texts,

from mentor advice to peer support, we’ve got it all.

Contact CICM for more information on any of these services,

or check them out at cicm.com

Giving you the tools to continue

working through this crisis.

MANAGING THE NEW

CREDIT FUTURE

As the world continues to react

to constant change, our credit

profession needs to prepare for the

new credit future.

For more information contact:

info@cicm.com or 01780 722900

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 59


Cr£ditWho?

CICM Directory of Services

COLLECTIONS

INTERNATIONAL COLLECTIONS

COLLECTIONS LEGAL

Controlaccount Plc

Address: Compass House, Waterside, Hanbury Road,

Bromsgrove, Worcestershire B60 4FD

T: 01527 549 522

E: sales@controlaccount.com

W: www.controlaccount.com

Controlaccount Plc provides an efficient, effective and ethical

commercial debt recovery service focused on improving business

cash flow whilst preserving customer relationships and established

reputations. Working with leading brand names in the UK and

internationally, we deliver a bespoke service to our clients. We

offer a no collect, no fee service without any contractual ties in.

Where applicable, we can utilise the Late Payment of Commercial

Debts Act (2013) to help you redress the cost of collection. Our

clients also benefit from our in-house international trace and

legal counsel departments and have complete transparency and

up to the minute information on any accounts placed with us for

recovery through our online debt management system, ClientWeb.

INTERNATIONAL COLLECTIONS

Atradius Collections Ltd

3 Harbour Drive,

Capital Waterside, Cardiff, CF10 4WZ

Phone: +44 (0)29 20824397

Mobile: +44 (0)7767 865821

E-mail:yvette.gray@atradius.com

Website: atradiuscollections.com

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 Yvette Gray Country Director, UK

and Ireland.

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

Baker Ing International Limited

Office 7, 35-37 Ludgate Hill, London. EC4M 7JN

Contact: Lisa Baker-Reynolds

Email: lisa@bakering.global

Website: https://www.bakering.global/contact/

Tel: 07717 020659

Baker Ing International is a dedicated team of Credit industry

experience that, combined, covers time served in most industries.

The team is wholly comprised of working Credit Manager’s

across the Globe with a minimum threshold of ten years working

experience within Credit Management. The team offers a

comprehensive service to clients - International Debt Recovery,

Credit Control, Legal Services & more

Our mission is to help companies improve the cost and efficiency

of their Credit Management processes in order to limit the risks

associated with extending credit and trading around the globe.

How can we help you - call Lisa Baker Reynolds on

+44(0)7717 020659 or email lisa@bakering.global

Sterling Debt Recovery

E: info@sterlingdebtrecovery.com

T: 0207 1005978

W: www.sterlingdebtrecovery.com

Sterling specialises in international business debt collection

to get outstanding invoices paid quickly and cost effectively.

Our experienced, enthusiastic collectors achieve results whilst

maintaining a professional image.

We work on a commission only basis with no up-front fees and

no hidden costs. Each client is allocated a named collector for

personal service and regular updates. We collect the majority

of debt without litigation, with our on-site lawyer supporting us

where appropriate.

Where local expertise is required our global network are available

to assist.

COLLECTIONS LEGAL

Keebles

Capitol House, Russell Street, Leeds LS1 5SP

T: 0113 399 3482

E: charise.marsden@keebles.com

W: www.keebles.com

Keebles debt recovery team was named “Legal Team of the Year”

at the 2019 CICM British Credit Awards.

According to our clients “Keebles stand head and shoulders

above others in the industry. A team that understands their client’s

business and know exactly how to speedily maximise recovery.

Professional, can do attitude runs through the team which is not

seen in many other practices.”

We offer a service with no hidden costs, giving you certainty and

peace of mind.

• ‘No recovery, no fee’ for pre-legal work.

• Fixed fees for issuing court proceedings and pursuing claims to

judgment and enforcement.

• Success rate in excess of 80%.

• 24 hour turnaround on instructions.

• Real-time online access to your cases to review progress.

Lovetts Solicitors

Lovetts, Bramley House, The Guildway,

Old Portsmouth Road,

Guildford, Surrey, GU3 1LR

T: 01483 347001

E: info@lovetts.co.uk

W: www.lovetts.co.uk

With more than 25yrs experience in UK & international business

debt collection and recovery, Lovetts Solicitors collects £40m+

every year on behalf of our clients. Services include:

• Letters Before Action (LBA) from £1.50 + VAT (successful in 86%

of cases)

• Advice and dispute resolution

• Legal proceedings and enforcement

• 24/7 access to your cases via our in-house software solution,

CaseManager

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

feedback: “All our service expectations have been exceeded.

The online system is particularly useful and extremely easy to

use. Lovetts has a recognisable brand that generates successful

results.”

CONSULTANCY

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-tobusiness

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

EXPERTLY RESOLVED.

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

enforce CCJs by transferring them up to the High Court. With our

fast, fair and personable approach to service, we work harder to

bring you the sector’s best results without risking client reputation.

• Free Transfer Up process of CCJs to High Court

• Market-leading recovery rates

• Over 100,000 writs, recovering >£187 million since 2014

• Real-time access to cases via our own Award-Winning App

• Our highly trained and certificated agents cover every postcode

in England & Wales.

FAST. FAIR. FOR YOU.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 60


FOR ADVERTISING INFORMATION OPTIONS AND PRICING CONTACT

russell@cabbells.uk 0203 603 7937

CREDIT INFORMATION

CREDIT INFORMATION

CREDIT MANAGEMENT SOFTWARE

2 0 0 2


2 0 2 0

CoCredo

Missenden Abbey, Great Missenden, Bucks, HP16 0BD

T: 01494 790600

E: customerservice@cocredo.com

W: www.cocredo.co.uk

CoCredo has 18 years experience in developing credit reports for

businesses and is the current CICM Credit Information Provider

of the Year. Our company data is continually updated throughout

the day and ensures customers have the most current information

available. We aggregate data from a range of leading providers

across over 235 territories and offer a range of services including

the industry first Dual Report, Monitoring, XML Integration and

DNA Portfolio Management.

We pride ourselves in offering award-winning customer service

and support to protect your business.

CREDIT INFORMATION

THE ONLY AML RESOURCE YOU NEED

SmartSearch

SmartSearch, Harman House,

Station Road,Guiseley, Leeds, LS20 8BX

T: +44 (0)113 238 7660

E: info@smartsearchuk.com W: www.smartsearchuk.com

KYC, AML and CDD all rely on a combination of deep data with

broad coverage, highly automated flexible technology with an

innovative and intuitive customer interface. Key features include

automatic Worldwide Sanction & PEP checking, Daily Monitoring,

Automated Enhanced Due Diligence and pro-active customer

management. Choose SmartSearch as your benchmark.

CEDAR

ROSE

R

Cedar Rose

3, Georgiou Katsonotou Street,3036, Limassol, Cyprus

E: info@cedar-rose.com T: +357 25346630

W: www.cedar-rose.com

Cedar Rose has been globally recognised as the expert for credit

reports, due diligence and data for the Middle East and North

African countries since 1997. We now cover over 170 countries

with the same high quality, expert analysis and attention to detail

we are well-known and trusted for.

Making best use of artificial intelligence and technology, Cedar

Rose has won several awards including Credit Excellence &

European Business Awards. Our website is a one-stop-shop for

your business intelligence solutions. We are the ultimate source;

with competitive prices and friendly customer service - whether

you need one or one thousand reports.

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

With 130+ years of experience, Graydon is a leading provider of

business information, analytics, insights and solutions. Graydon

helps its customers to make fast, accurate decisions, enabling

them to minimise risk and identify fraud as well as optimise

opportunities with their commercial relationships. Graydon uses

130+ international databases and the information of 90+ million

companies. Graydon has offices in London, Cardiff, Amsterdam

and Antwerp. Since 2016, Graydon has been part of Atradius, one

of the world’s largest credit insurance companies.

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

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.

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.

CREDIT MANAGEMENT SOFTWARE

ONGUARD

T: 020 3868 0947

E: lisa.bruno@onguard.com

W: www.onguard.com

Onguard is specialist in credit management software and market

leader in innovative solutions for order to cash. Our integrated

platform ensures an optimal connection of all processes in the

order to cash chain and allows sharing of critical data.

Intelligent tools that can seamlessly be interconnected and

offer overview and control of the payment process, as well as

contribute to a sustainable customer relationship.

In more than 50 countries the Onguard platform is successfully

used for successful credit management.

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

Founded in 2000, Tinubu Square is a software vendor, enabler

of the Credit Insurance, Surety and Trade Finance digital

transformation.

Tinubu Square enables organizations across the world to

significantly reduce their exposure to risk and their financial,

operational and technical costs with best-in-class technology

solutions and services. Tinubu Square provides SaaS solutions

and services to different businesses including credit insurers,

receivables financing organizations and multinational corporations.

Tinubu Square has built an ecosystem of customers in over 20

countries worldwide and has a global presence with offices in

Paris, London, New York, Montreal and Singapore.

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.

Data Interconnect Ltd

Units 45-50

Shrivenham Hundred Business Park, Majors Road,

Watchfield. Swindon, SN6 8TZ

T: +44 (0)1367 245777

E: sales@datainterconnect.co.uk

W: www.datainterconnect.com

Data Interconnect is dedicated to solving complex Accounts

Receivable problems through reliable, easy-to-use cloud

software. We empower billing managers and collections experts

with the tools and data they need in a user-friendly interface, for

timely, tax-compliant invoicing, collections and reconciliation in

the most cost effective, secure, auditable and trackable manner.

The powerful, flexible, Corrivo platform is the only system your

AR team needs to manage your company’s cashflow better.

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.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 61


Cr£ditWho?

CICM Directory of Services

FOR ADVERTISING INFORMATION

OPTIONS AND PRICING CONTACT

russell@cabbells.uk 0203 603 7937

CREDIT MANAGEMENT SOFTWARE

DATA AND ANALYTICS

FORUMS

ESKER

Sam Townsend Head of Marketing

Northern Europe Esker Ltd.

T: +44 (0)1332 548176 M: +44 (0)791 2772 302

W: www.esker.co.uk LinkedIn: Esker – Northern Europe

Twitter: @EskerNEurope blog.esker.co.uk

Esker’s Accounts Receivable (AR) solution removes the all-toocommon

obstacles preventing today’s businesses from collecting

receivables in a timely manner. From credit management to cash

allocation, Esker automates each step of the order-to-cash cycle.

Esker’s automated AR system helps companies modernise

without replacing their core billing and collections processes. By

simply automating what should be automated, customers get the

post-sale experience they deserve and your team gets the tools

they need.

Dun & Bradstreet

Marlow International, Parkway Marlow

Buckinghamshire SL7 1AJ

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

Dun & Bradstreet Finance Solutions enable modern finance

leaders and credit professionals to improve business performance

through more effective risk management, identification of growth

opportunities, and better integration of data and insights across

the business. Powered by our Data Cloud, our solutions provide

access to the world’s most comprehensive commercial data

and insights - supplying a continually updated view of business

relationships that helps finance and credit teams stay ahead of

market shifts and customer changes. Learn more here:

www.dnb.co.uk/modernfinance

FORUMS INTERNATIONAL

T: +44 (0)1246 555055

E: info@forumsinternational.co.uk

W: www.forumsinternational.co.uk

Forums International Ltd have been running Credit and Industry

Forums since 1991. We cover a range of industry sectors and

International trading, attendance is for Credit Professionals of all

levels. Our forums are not just meetings but communities which

aim to prepare our members for the challenges ahead. Attending

for the first time is free for you to gauge the benefits and meet the

members and we only have pre-approved Partners, so you will

never intentionally be sold to.

INSOLVENCY

SERRALA

Serrala UK Ltd, 125 Wharfdale Road

Winnersh Triangle, Wokingham

Berkshire RG41 5RB

E: r.hammons@serrala.com W: www.serrala.com

T +44 118 207 0450 M +44 7788 564722

Serrala optimizes the Universe of Payments for organisations

seeking efficient cash visibility and secure financial processes.

As an SAP Partner, Serrala supports over 3,500 companies

worldwide. With more than 30 years of experience and

thousands of successful customer projects, including solutions

for the entire order-to-cash process, Serrala provides credit

managers and receivables professionals with the solutions they

need to successfully protect their business against credit risk

exposure and bad debt loss.

C2FO

C2FO Ltd

105 Victoria Steet

SW1E 6QT

T: 07799 692193

E: anna.donadelli@c2fo.com

W: www.c2fo.com

C2FO turns receivables into cashflow and payables into income,

uniquely connecting buyers and suppliers to allow discounts

in exchange for early payment of approved invoices. Suppliers

access additional liquidity sources by accelerating payments

from buyers when required in just two clicks, at a rate that works

for them. Buyers, often corporates with global supply chains,

benefit from the C2FO solution by improving gross margin while

strengthening the financial health of supply chains through

ethical business practices.

Menzies

T: +44 (0)2073 875 868 - London

T: +44 (0)2920 495 444 - Cardiff

W: menzies.co.uk/creditor-services

Operating across seven UK offices, Menzies LLP is an

accountancy firm delivering traditional services combined

with strategic commercial thinking. Our services include:

advisory, audit, corporate and personal tax, corporate

finance, forensic accounting, outsourcing, wealth

management and business recovery – the latter of which

includes our specialist offering developed specifically for

creditors. For more information on this, or to see how the

Menzies Creditor Services team can assist you, please

visit: www.menzies.co.uk/creditor-services. Bethan Evans,

Partner and Head of Menzies Creditor Services, email:

bevans@menzies.co.uk and phone: +44 (0)2920 447512

LEGAL

Redwood Collections Ltd

0208 288 3555

enquiry@redwoodcollections.com

Airport House, Purley Way, Croydon, CR0 0XZ

“Redwood Collections offers a complete portfolio of debt

collection services ranging from sensitive client-debtor mediation

through to legal and insolvency action.

Incorporated in 2009, we are pleased to represent in excess of

11,000 clients. Whatever your debt collection needs, we have

the expertise and resources to deliver a fast, efficient and costeffective

solution.”

Satago

48 Warwick Street, London, W1B 5AW

T: +44(0)020 8050 3015

E: hello@satago.com

W: www.satago.com

Satago helps business owners and their accountants avoid credit

risks, manage debtors and access finance when they need it – all

in one platform. Satago integrates with 300+ cloud accounting

apps with just a few clicks, helping businesses:

• Understand their customers - with RISK INSIGHTS

• Get paid on time - with automated CREDIT CONTROL

• Access funding - with flexible SINGLE INVOICE FINANCE

Visit satago.com and start your free trial today.

identeco – Business Support Toolkit

Compass House, Waterside, Hanbury Road, Bromsgrove,

Worcestershire B60 4FD

Telephone: 01527 549 531 Email: info@identeco.co.uk

Web: www.identeco.co.uk

identeco’s Business Support Toolkit is an online portal connecting

its subscribers to a range of business services that help them

to engage with new prospects, understand their customers and

mitigate risk. Annual subscription is £79.95 per year for unlimited

access. Providing company information and financial reports,

director and shareholder structures as well as a unique financial

health rating, balance sheets, ratio analysis, and any detrimental

data that might be associated with a company. Other services

also included in the subscription include a business names

database, acquisition targets, a data audit service as well as

unlimited, bespoke marketing and telesales listings for any sector.

FINANCIAL PR

Gravity Global

Floor 6/7, Gravity Global, 69 Wilson St, London, EC2A 2BB

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

W: www.gravityglobal.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 bestknown

brands working on often challenging briefs. As the partner

agency for the Credit Services Association (CSA) for the past 22

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.

Shoosmiths

Email: paula.swain@shoosmiths.co.uk

Tel: 03700 86 3000 W: www.shoosmiths.co.uk

Shoosmiths’ highly experienced team will work closely with credit

teams to recover commercial debts as quickly and cost effectively

as possible. We have an in depth knowledge of all areas of debt

recovery, including:

•Pre-litigation services to effect early recovery and keep costs down

•Litigation service

•Post-litigation services including enforcement

•Insolvency

As a client of Shoosmiths, you will find us quick to relate to your goals,

and adept at advising you on the most effective way of achieving

them.

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.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 62


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.

ARE YOU A LEADER

OR FOLLOWER?

Key IVR

T: +44 (0) 1302 513 000

E: sales@keyivr.com

W: www.keyivr.com

Key IVR are proud to have joined the Chartered Institute of

Credit Management’s Corporate partnership scheme. The

CICM is a recognised and trusted professional entity within

credit management and a perfect partner for Key IVR. We are

delighted to be providing our services to the CICM to assist with

their membership collection activities. Key IVR provides a suite

of products to assist companies across the globe with credit

management. Our service is based around giving the end-user

the means to make a payment when and how they choose. Using

automated collection methods, such as a secure telephone

payment line (IVR), web and SMS allows companies to free up

valuable staff time away from typical debt collection.

RECRUITMENT

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.

PORTFOLIO

CREDIT CONTROL

Portfolio Credit Control

1 Finsbury Square, London. EC2A 1AE

T: 0207 650 3199

E: recruitment@portfoliocreditcontrol.com

W: www.portfoliocreditcontrol.com

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

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.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 63


Working

Capital that

works for you

The many reasons why suppliers love working with C2FO

“The benefit of C2FO

is simple, it’s flexible,

and it’s helping us

meet our cash needs”

“Having support from

C2FO has freed me

up to invest, take my

business to the next

level and thrive”

“It allows me to plan

my business, which

is everything,”

C2FO provides an additional debt-free working capital

option that enables you to take control of your cash

flow on-demand. This flexible and simple cash and risk

management option provides an additional lever to help

manage reporting targets and KPIs, seasonality, credit risk

exposure or daily operational business activities.

Whatever your cash flow needs, C2FO can help.

Advancing the credit profession / www.cicm.com / December 2020 / PAGE 64

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