CM magazine Nov2021

credit

CREDIT MANAGEMENT

THE CICM MAGAZINE FOR CONSUMER AND

COMMERCIAL CREDIT PROFESSIONALS

NOVEMBER 2021 £12.50

Bouncing

Back

Invoice Finance

and the economic

recovery

Caroline Sumner considers

the future landscape for

insolvencies Page 10

Sean Feast FCICM talks to

Denise Crossley FCICM

Page 12


European default and

insolvency statistics are

forecast to increase

significantly in the coming

months. Now is the time to

reduce debtor brackets and

days beyond term, to both

support year end reporting and

mitigate the risk of bad debt

ahead.

It is imperative to consider

risk, as well as receivables age,

when seeking to maximise

year end results. Leverage a

trusted collection service,

designed specifically for highvalue

and highly sensitive

accounts receivable.

The time is now.

Maximise year-end cash collections

at www.bakering.global

admin@bakering.global | +44 (0)207 871 179 | www.bakering.global


18

SHOOTING STARS

Lisa Schorah

xx

CERTAIN FEELINGS

Howard Wilshire

10

DELAYED ACTION

Caroline Sumner

20

BOUNCING BACK

Lead article

NOVEMBER 2021

www.cicm.com

CONTENTS

10 – DELAYED ACTION

Caroline Sumner of R3 considers the

future landscape for insolvencies.

12 – ARRESTED DEVELOPMENT

Sean Feast FCICM talks to Denise

Crossley FCICM about her distinguished

career in credit.

18 – SHOOTING STARS

Sean Feast FCICM speaks to Shooting

Star winner Lisa Schorah.

20 – BOUNCING BACK

Alex Waterman of UK Finance

considers the role of Invoice Finance in

the UK economic recovery.

24 – COUNTRY FOCUS

Estonia packs a mighty technological

punch.

36 – THE WAITING GAME

Simon Philpin of Markel International

discusses COVID-19 and its impact on

credit insurance

38 – SECRET SQUIRREL

Peter Walker highlights a complex

case involving the payment of secret

commissions to a commercial broker.

48 – TESTING TIMES

Derek Scott FCICM considers how best

practice credit management can avoid

Late Payment.

CICM GOVERNANCE

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

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

Credit Management is distributed to the entire UK and international CICM

membership, as well as additional subscribers

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

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

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

trade mark of the Chartered Institute of Credit Management.

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

38

LEGAL MATTERS

Peter Walker

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: Laurie Beagle FCICM / Glen Bullivant FCICM / Alan Church FCICM(Grad) / Brendan Clarkson FCICM

Larry Coltman FCICM / Niall Cooter FCICM / Bryony Crossland FCICM(Grad) / Peter Gent FCICM(Grad)

Victoria Herd FCICM(Grad) / Philip Holbrough MCICM / Neil Jinks FCICM / Charles Mayhew FCICM / Debbie Nolan FCICM(Grad)

/ Allan Poole MCICM / Alice Purdy MCICM(Grad) / Matthew Roberts MCICM / Phil Rice FCICM / Chris Sanders FCICM

Stephen Thomson FCICM / Sarah Wilding FCICM / Atul Vadher FCICM(Grad)

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

Sam Wilson, Imogen Hart, Rob Howard

and Max Tyson

Advertising

Russell Bass

Telephone: 020 3603 7937

Email: russell@centuryone.uk

Printers

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2021 subscriptions

UK: £112 per annum

International: £145 per annum

Single copies: £12.50

ISSN 0265-2099

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 3


EDITOR’S COLUMN

Vicars, Zulus and the

plight of the Energy sector

Sean Feast FCICM

Managing Editor

NOW I want you to read

this and read it very

carefully. Because when

it happens, I want you to

remember you heard it

here first.

This Christmas, there will be a story

in the media about a Vicar who decides

not to send a Christmas card or reference

the birth of Christ in any way for fear

of offending a small minority of his/her

parishioners.

There. I’ve said it. Because it will

happen.

It’s much the same as the story of the

Dragon School in Oxford who renamed

its term times as they were deemed too

religious and not inclusive enough.

Heaven knows what might happen at

my own Alma Mater one day when they

realise that one of the houses is named

after a British Colonialist who did for the

Zulus and tried to wipe out the Boers.

We’ll have protestors gluing themselves

to the gas lamps in Quad for sure and

quite right too. No tiffin in the Rag for

them!

And here’s another cert. When the

Energy sector all goes the shape of

a Pyrus, and in six-to-12-months’

time the wrong bills are sent to the

wrong people, or consumers are

pursued for debts they don’t owe,

it will all be the fault of CICM

members working in the debt

collection industry.

Now you know, and I know,

that this will be utter nonsense.

But try telling that to a hysterical

personal finance or consumer

affairs journalist for the Mail on

Sunday. Try telling them that if you get

rubbish in, there’s a very good chance

you might get rubbish out. Try telling

them also that you wrote to the Chief

Executive of OFGEM months before

warning them that this very thing might

happen if they didn’t keep their eye on

the ball.

Because this is actually what the

industry has done. In a move welcomed

by our own Chief Executive Sue Chapple

FCICM, who just so happens to know a

thing or two about the Energy sector,

the CSA has written to OFGEM to

seek re-assurances about the accuracy,

integrity and completeness of customer

data (see news page 6).

As customers are shunted from one

failed energy company to another

(which is also probably hanging on by

the skin of its teeth), the opportunity for

something to go wrong in the transfer

of data is almost guaranteed. The CSA

is also seeking clarity on the nature

of the regulatory framework in which

administrators will determine their

approach to accounts in arrears. Again,

they already know that the blame is

unfairly heading their way if a vulnerable

customer is made even more vulnerable

by being lost in the system, or billed for

a service they never received, or energy

they never used.

It’s a smart move, as is the urging for

customers to engage early if there is a

problem, and it will be interesting to see

how OFGEM responds. But for now, sit

back, relax, and wait for some guaranteed

fun and games in the months ahead.

And just remember, you read it here

first.

As customers are shunted from one failed energy

company to another (which is also probably hanging

on by the skin of its teeth), the opportunity for

something to go wrong in the transfer of data is

almost guaranteed.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 4


CMNEWS

A round-up of news stories from the

world of consumer and commercial credit.

Written by – Sean Feast FCICM

Intrum’s return suggests success

in shift to outcome-based models

CREDIT management group Intrum has returned

to the contingency collections market in the

UK, suggesting a greater understanding and

acceptance of outcomes-based models over

cash. The company says it now offers a full

UK debt collection service, allowing clients to

benefit from its continuous investment in technology and

analytics as well as award-winning customer care. The move

complements Intrum’s established early arrears, white label

and debt purchase services.

UK MD Eddie Nott said there is demand from clients

for access to high-quality, bespoke collections systems,

technology and customer service on a contingency basis.

“The launch of the UK DCA service means we can provide

the full cycle of debt collection services to our clients, from

white label early arrears to contingency collections and debt

purchase. Clients can be sure their customers are in safe

hands, with the market leading customer care for which

Intrum is renowned.”

Speaking exclusively to Credit Management, Eddie

explained the reasons why Intrum left the market and why

now is the right time to return: “We left the contingency

market in 2010 at a time when the regulatory environment

was changing,” he says. “Margins were under pressure given

the cost of compliance was increasing but rates were not, and

we didn’t want to compromise on the levels of customer

care provided. We were also uncomfortable with a

commission model that prioritised cash collected as the key

measure of success.

“Over a decade later, the market has matured and creditors

understand and accept the costs of collecting debts in an

ethical way. Even in commission-based models, the focus

is on outcomes rather than only cash measures. There is

real value for creditors in refining the number of suppliers

they use across their customer lifecycle, from early arrears

through to contingent and debt sale – in terms of the cost

of oversight and auditing, for example. There are also

operational efficiencies by utilising a single supplier.”

In terms of the wider landscape, Eddie says that there has

been considerable consolidation and some players have been

forced to exit: “Despite a shift towards selling debt earlier,

creditors are keen to retain flexibility and we can offer that,

perhaps as a route into other services, such as white label.

With our brand, ownership structure and funding, we can

provide stability of service over the long term.”

In addition, Eddie says, the investment the business has

made in technology and tools, as a significant purchaser of

debt, is of real benefit when used in a contingency market:

“The DCA service gives creditors a chance to trial our services

and see the benefit of those tools in a different way.”

“The launch of the

UK DCA service

means we can

provide the full cycle

of debt collection

services to our

clients, from white

label early arrears

to contingency

collections and debt

purchase.’’

Eddie Nott,

MD-UK at Intrum

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 5


NEWS SPECIAL

Debt body warns OFGEM of

dangers of inaccurate data

FEAR of the fall-out of the

ongoing energy crisis and

its ultimate impact on

consumers has prompted

the Credit Services

Association to seek clarity

from OFGEM as to the standards

customers should expect in regards

to the practices of administrators and

accounts in arrears.

Credit Management has seen a

letter from Chris Leslie, CEO of the

CSA to OFGEM CEO Jonathan Brearley

in which he asks for reassurance

that the integrity and completeness

of customer data will be an area of

particular focus for affected customers.

He believes it could have a crucial

bearing on the customer journey and

how customers are treated at a later

date.

Chris writes that while it is clear

what will happen to those customers

with neutral and/or credit balances, the

picture appears less clear in relation to

those that are in arrears.

The CSA says that those customers

may find themselves and their

debt transferred to a new supplier,

or their debt may remain with the

administration and liquidation

of the failed supplier. Under the

circumstances, it is therefore possible

that those customers may face

unintended risks.

“Our members comprise specialist

tracing agencies and collect on

behalf of large banks and utility

companies. As such we take a close

interest in significant policy matters

likely to impact customers and the

collection of sums owed to creditors –

and so the recent change in the

energy supplier landscape has a

number of consequences we want

to raise with OFGEM directly,” Chris

says.

“Certainly, collection services

providers who are subsequently

engaged will do what they can to

minimise the scope for harm to those

consumers. Nevertheless, we believe it

would be beneficial at this early stage

to have greater clarity on the nature

of the regulatory framework in which

administrators will determine their

approach to accounts in arrears.”

Chris is particularly concerned

about the management and transfer

of customer data: “The accuracy and

completeness of data will be a key

consideration, especially for those

whose debts remain with those

’’A minor error in data accuracy

initially can have profound

implications which can contribute

to a poor customer journey at a

later date.”

administering the failed supplier,” he

continues. “In those cases, not only

will it be crucial that the administrator

adheres to the same standards as you

would expect from a supplier, but also

the new supplier will need to be aware of

the existence of the debt, even if it is not

responsible for its recovery.

“It will be appreciated that our

members will not be able to pre-empt

the potential effects of inaccurate data

any more than they would be able to

advise on wider considerations such

as entitlement to benefits including the

Warm Homes Discount or what might

happen in relation to those customers

on pre-payment meters.”

Chris says that clarity and accuracy

of data will, therefore, be critical in

achieving effective and appropriate

treatment for such customers and

in ensuring they are informed and

engaged with: “This is particularly the

case where an account is subsequently

Chris Leslie,

CEO of the CSA

“The accuracy and

completeness of

data will be a key

consideration, especially

for those whose debts

remain with those

administering the failed

supplier”

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 6


NEWS SPECIAL

“It is a sensible move for our industry to flag this issue

early and in particular to ask OFGEM to be clear in its

communication to customers to engage as soon as

possible if they are in difficulties”

>NEWS

IN BRIEF

Swedish Partnership

THE CICM has started co-delivering a

Level 3 diploma course to a cohort in

Sweden in conjunction with Credma,

School of Credit Management. It has

recently commenced the second unit

(being delivered in full) and is looking

for a further cohort of learners to

commence in November. Further

news to highlight the relationship

between the CICM and Credma will

follow in a future issue.

ENTRIES are now invited for the

British Credit Awards 2022 to

recognise the stand-out achievements

of the most deserving individuals,

teams and organisations in the

international credit community. The

awards will be announced at a gala

dinner at the Royal Lancaster Hotel on

24 March next year. Closing date for

the awards is Friday, 26 November.

transferred to a third party, such as one

of our members. A minor error in data

accuracy initially can have profound

implications which can contribute to a

poor customer journey at a later date.”

Financial difficulty is rarely confined

to a single debt or account but can

rapidly destabilise a customer’s financial

position. Chris believes that early

engagement is critical: “It is important

that affected customers are positively

encouraged to engage and have the

necessary information to enable them to

do so in a streamlined fashion,” he adds.

“We are calling upon OFGEM to

embark on a proactive communications

strategy for those transferred customers

who are in difficulty to engage as soon

as possible.

“The experience of our members

shows that the sooner a person in

difficulty engages with that difficulty,

the more quickly an appropriate solution

can be found - whether that engagement

is with a creditor, collector or debt

adviser.”

Sue Chapple FCICM, CEO of

the Chartered Institute of Credit

Management, welcomed the move:

“There will undoubtedly be issues

further down the line when our

members working in collections will be

expected to pick up the pieces,” she says.

“We know the media will be quick

to pounce on any story where a

customer is being pursued for a debt

perhaps they didn’t owe, or isn’t theirs,

simply because the data passed to the

collections agency is inaccurate, out-ofdate

or simply wrong, and it will be the

agency that takes the flak.

“It is a sensible move for our

industry to flag this issue early and

in particular to ask OFGEM to be clear

in its communication to customers to

engage as soon as possible if they are in

difficulties and/or there is an issue with

their bill.”

Kismet Hardy

INTRUM has appointed Emma Hardy

as Business Development Manager.

She will be working closely with the

company’s existing and prospective

clients to enable them to access

Intrum’s collections platform and

expert customer care.

Loans transfer

BUSINESS Capital Loans arranged

by Asto, a digital brand of Santander,

have been transferred to Azzurro

Associates, a business that acquires

and manages commercial loans. The

‘Frequently Asked Questions’ section

on the Asto website says that ‘in

order to ensure continued support

for its Business Capital customers,

Asto is transferring its portfolio

of outstanding loans to Azzurro

Associates.’ It describes Azzurro as

‘an experienced purchaser of loans’

and says ‘they will continue to provide

great support to our customers.’ Asto

has contacted existing Business

Capital customers to notify them of

the transfer of their loan(s) to Azzurro

Associates and has assured customers

that the transfer of their loans will not

affect their credit rating, although it

may be affected if repayments are not

maintained. Santander announced

Asto was being put into run off earlier

this year.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 7


NEWS ROUNDUP

UK business failures

forecast to rise by a third

UK business insolvencies

are set to rise 33 percent

on pre-pandemic levels,

according to new

economic research by

trade credit insurer

Atradius, but the number of ‘zombie’

firms is also likely to increase.

Contrary to initial expectations, the

new Atradius Insolvency Forecast

reports UK business insolvencies

declined 27 percent in 2020 as a

result of fiscal support schemes and

anti-bankruptcy measures. As these

measures continued in 2021, buffering

businesses from the impact of the

pandemic, insolvency rates have

been kept artificially low. However, as

fiscal support schemes are withdrawn,

Atradius expects the long-awaited surge

in insolvencies to be on the horizon,

peaking in 2022.

The Insolvency Forecast warns UK

business failures will begin to rise in

H2 2021, resulting in a year-on-year

increase of seven percent. In 2022,

annual insolvencies are forecast to

spike by as much as 70 percent year on

year. Analysis by Atradius economists

of the latest forecast against a baseline

insolvency level in 2019 reveals UK

insolvencies will be 33 percent higher

in 2022 than they were pre-pandemic

– one of the highest rates in the world.

Only Italy has a higher cumulative

insolvency rate with a forecast increase

of 34 percent, followed by the UK and

Australia with a forecast increase of 33

percent.

On a macroeconomic scale, Atradius

forecasts global insolvencies will rise 33

percent year on year in 2022 after two

years of decline. Global insolvencies fell

by 14 percent in 2020 and by a modest

one percent in 2021, despite the world

economy being plunged into recession.

This is a significant downward

adjustment to earlier forecasts,

suggesting that fiscal support packages

have been particularly effective.

“The most important

thing businesses can

do now is to be prepared.

In such an uncertain

and potentially volatile

trading environment

information is critical.’’

However, Atradius warns that the

sharp decreases in most countries also

suggest potentially many so-called

‘zombie’ companies have been created

whose financial situation is too weak to

survive once economic circumstances

return to normal. These zombie firms

may be able to buy themselves time by

running down their cash but Atradius

economists expect them to materialise

into bankruptcies within the four

quarters of fiscal support ending.

In the report, Atradius details that

the surge in insolvencies is shaped

by three forces. First is the delayed

effect of bankruptcies that would have

occurred in 2020 in the absence of fiscal

schemes and changes to insolvency

proceedings. Secondly, the phasing

out of support schemes is expected

to trigger an increase of insolvencies

towards ‘normal’ pre-pandemic levels.

The third force is the elasticity of

insolvencies to GDP changes, which has

been effectively suspended throughout

the pandemic to date.

Damien Dawson, Southern Regional

Manager, of Atradius UK, says it is

simple economics that insolvencies

come hand in hand with economic

recession: “This was inevitable as global

economies recoiled as the pandemic

hit,” he says. “However, Governments

worldwide were quick to break this

correlation and support businesses

through the hardest trading period since

the Great Depression. As the economy

rebounds and support schemes are

gradually withdrawn, the escalation

of insolvencies is, unfortunately,

inescapable.

“The most important thing

businesses can do now is to be

prepared. In such an uncertain and

potentially volatile trading environment,

information is critical. Businesses must

build up comprehensive insights into

buyers and their ability to pay, through

real-time monitoring alongside a robust

credit management strategy, flexibility

to adapt should warning signs arise

and non-payment protection. All of this

is part and parcel of what trade credit

insurance provides.”

Tradewind agrees deal with Cedar Rose

TRADEWIND Middle East, a specialist

trade finance enabler, has entered

into a strategic agreement with Cedar

Rose in which the latter will provide

vital business information services

for the companies Tradewind is

evaluating to underwrite.

Through Cedar Rose’s

comprehensive company credit

reports Tradewind will have access

to a variety of data including

company firmographics, company

identification, company structure,

management and much more. This

will enable Tradewind to assess the

credit worthiness of the companies,

evaluate any risk associated with

them and ensure they support their

customers confidently. Antoun

Massaad, the Co-Founder and CEO

of Cedar Rose, is delighted with the

new agreement: “It demonstrates

the trust Tradewind has in Cedar

Rose to provide qualitative business

and credit risk reports and solutions

internationally,” he says.

“Our meticulous due diligence

research allows our partners to

understand creditworthiness of their

business associates while uncovering

potential risks related to them based

on accurate information. Tradewind

is at the forefront of international

trade finance providing liquidity for

enterprises in developed, emerging

and frontier markets trading

internationally, and we are

delighted to work with such an

accomplished and trusted global

business house.”

With more than 20 offices

worldwide, Tradewind is one of

the leading international trade

finance companies. Specialised in

cross-border transactions with an

emphasis on eliminating trade risk

without the need for adding external

debt, it offers non-recourse export

financing and supply chain finance.

Established in 1997, Cedar Rose

has been at the forefront of providing

world-class business intelligence and

credit risk solutions to leading firms

in over 230 countries globally.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 8


NEWS ROUNDUP

Equifax reveals ways credit

reference agencies fight fraud

EQUIFAX, one of the nation’s leading

credit reference agencies (CRAs), is

encouraging people to discover the

power of their credit report in the fight

against financial foul play.

Know your customer (KYC) checks,

live fraud alerts, detailed reports on

financial history, password protections

and educating the most vulnerable are

the five principal weapons CRAs can

deliver to help combat fraud.

Lisa Hardstaff, Head of Customer

Experience for Equifax UK, believes

that the UK is in the middle of a fraud

‘scandemic’: “Scammers prey on change

and uncertainty, and we’ve had both of

those in abundance over the past year,”

she says.

“Together with an explosion of

technology, we’ve all now sadly borne

witness to many of the underhanded

techniques employed by scammers to

part us from our hard-earned cash.

“Fortunately, we are not powerless in

the face of this threat,” she continues.

“As consumers, there’s plenty we can do

to resist the persuasive techniques of

fraudsters, and to say ‘no’ if a call, text

or email doesn’t feel right. The business

community also has an important role

to play in fighting fraud, and protecting

consumers from exploitation, and

credit reference agencies are a

critical part of that vital security

infrastructure.”

Equifax’ advice coincides with a

report from personal data protection

business VPN Overview that suggests

that fraud related crime rates have

risen by 52 percent over the past year

and that over the past three years fraud

accounted for 69 percent of all personal

crime reported through its Crime

Survey for England and Wales.

The study found that the most

targeted age group was those from 45 to

54 years of age, with 10 percent of those

interviewed in the age group reporting

to have been victims of fraud. The

least affected group was found to be

those over the age of 75, with only five

percent of participants in the age group

reporting fraud related crimes in the

past three years.

Tarmac achieves CICMQ accreditation

TARMAC, the UK’s leading sustainable

building materials and construction

solutions business, has achieved CICMQ

accreditation, a demonstration of

excellence in credit management.

Karen Cichosz, Senior Manager –

Cash Collections at Tarmac, says the

accreditation confirms the company’s

commitment to best practice: “We are

committed to continually improving and

CICMQ acts as a benchmark to show

how far we have travelled and compare

ourselves against our peers. We strive

to be best in class and are proud to have

achieved the accreditation.

“It is an honour to be part of the CICMQ

network and to be able to share ideas

and experience with other best practice

organisations. This has helped us evolve

the way we work, from the way we engage

with our stakeholders, to the way we

develop our team.

The credit team of Tarmac consists of 32

people and the business turns over £2.7bn.

>NEWS

IN BRIEF

Edrington secures

CICMQ accreditation

EDRINGTON UK Distribution Ltd, the

sales, marketing and distribution

company owned by internationally

renowned spirits company

Edrington, has achieved CICMQ

accreditation, a demonstration of

excellence in credit management.

Anne Marie Valentini MCICM,

Credit Manager of Edrington UK,

says the accreditation has enabled

the team to demonstrate best

practice: “By allowing us to measure

ourselves against the best in the

business, our accreditation has

confirmed that we are delivering

a high standard of service both

internally and externally.

“And while we know that our

processes are up to standard, our

ethos of continuous improvement

calls for more than this. As such,

we will continue to periodically

send out our Customer Service

questionnaire to identify and target

areas in which we can improve”.

Chris Sanders FCICM, Head

of CICMQ Accreditation wrote

in his report: ‘Edrington UK has

a documented Credit Policy in

place backed by comprehensive

procedures, clear guidelines and

authority levels in line with their

credit insurance governance.

‘Interviews with members of

the team demonstrated passion

and pride for the role they play

within the business. Overall,

there is excellent interaction with

other areas of the business and

the responsibilities of the credit

management team are clearly

defined and structured.’

Edrington UK works within all

areas of the drinks industry, from

major supermarkets and online

retailers to the country’s best bars,

pubs and restaurants. Brands with

whom the business is associated

include The Macallan, The Famous

Grouse, Highland Park, Laphroaig,

House of Suntory and Courvoisier.

‘‘The accreditation

has enabled the team

to demonstrate best

practice, by allowing us

to measure ourselves

against the best in the

business.’’

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 9


INSOLVENCY

DELAYED ACTION

Corporate insolvencies will rise as

Government support comes to an end.

AUTHOR – Caroline Sumner

SINCE the start of the pandemic,

insolvencies have fallen. More than

4,500 fewer companies entered an

insolvency process in 2020 than the

year before, which is an unusual trend

given the economic climate.

Over the last four months, however, insolvency

numbers have been increasing – with the latest

figures, which covered August of this year,

showing numbers that were not dissimilar to

August 2019.

As the economy continues to open up and the

pandemic support measures wind down, we are

likely to be in for an increase in the number of

businesses entering a corporate insolvency process

after months of declining numbers, economic

turbulence, and unprecedented Government

support. The full extent of this increase, however,

remains to be seen.

A SEISMIC ECONOMIC BLOW

The first lockdown led to a 25 percent drop in GDP

between April and February 2020. As restrictions

eased and were then reinstated throughout the rest

of the year, and early 2021, the economy recovered.

In fact, the final two lockdowns resulted in much

smaller economic contractions than the previous

ones, and, at the time of writing, just under three

months after the final restrictions were lifted, the

economy is only 2.1 percent smaller than it was in

February 2020.

However, the continuing economic recovery

doesn’t tell the full story. As a result of the

pandemic, some businesses shut down – either

as a result of the Government’s restrictions or of

their own accord – while others had to review or

revise their business models in order to continue

trading.

This had a knock-on effect on members of

the supply chain, staff who were furloughed,

while the enforced closure of schools meant that

working parents were balancing their professional

commitments with their parental ones.

It also affected consumer spending levels,

which fell year-on-year in 2020. On a more positive

note, levels of household savings increased, but it

remains to be seen whether those will be spent

as the economy continues to reopen or whether

people will hold onto the money they’ve saved.

GOVERNMENT SUPPORT MEASURES

The Government’s response to the economic shock

of the pandemic was to pledge to do ‘whatever

it takes’ to get through the crisis. This translated

into a policy programme that saw hundreds of

billions of pounds of support provided, changes

in insolvency measures to prevent creditor action,

and the introduction of initiatives to support both

the employed and the self-employed.

Of all its initiatives, the Government’s furlough

scheme has been the most high-profile, and

potentially the most impactful – protecting

more than 11 million jobs at its peak, enabling

businesses to retain staff they would otherwise

have to have made redundant.

Our one concern, though, is how businesses

will navigate the post-support world, and

whether all of the measures the Government has

introduced will have prevented or simply paused

increases in corporate insolvency.

GOVERNMENT STEPS IN WITH NEW

LEGISLATION

The pandemic prompted the Government to

introduce one of the most significant pieces of

insolvency legislation for 20 years, in the form of

the Corporate Insolvency and Governance Act.

The Act, which came into force in June 2020,

introduced two new tools for the insolvency

profession to use, both of which were intended to

support the process of recovering businesses.

The first of these, the moratorium, was intended

to give businesses breathing space to explore

their options for resolving their financial issues.

The second, the Restructuring Plan, enabled

insolvency and restructuring professionals to

restructure financially distressed companies via a

flexible, court-supervised process.

The Act also included three temporary

measures: restrictions on using winding-up

processes; temporary changes to wrongful trading

rules; and relaxation of meetings and filing

requirements to give companies greater flexibility.

A MODIFIED APPROACH

More recently, the Government announced its

temporary insolvency measures were to be phased

out from 1 October, and that it was introducing

two new measures which would be in force until

31 March next year.

The first of these was a temporary increase

in the current debt threshold for a winding up

petition to £10,000, while the second required

landlords to seek proposals for payment from a

debtor business, and introduced a 21-day pause

before landlord creditors could move forward

with winding up action. What’s clear about

the Government’s approach to legislation postlockdown,

is that it is tapering the withdrawal of

support to reflect the opening up of the economy

and the need to balance the interests of businesses

with those of their creditors.

It’s evident it wants to prevent both a rush of

insolvencies and the potential knock-on effect of

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 10


INSOLVENCY

AUTHOR – Caroline Sumner

unpaid debts on members of the supply chain,

which could lead to further insolvencies in the

future – even if the new measures prevent a

sudden increase in the run up to Christmas.

DIRECTOR MISCONDUCT

Another factor which could potentially affect

future insolvency levels is the Government’s

plans for addressing director misconduct by

granting the Insolvency Service new powers to

investigate directors of dissolved companies, as

part of the Rating (Coronavirus) and Directors

Disqualification (Dissolved Companies) Bill.

The proposed change to the Insolvency

Service’s powers will mean that directors of

dissolved companies will be put on a more equal

footing with directors of insolvent companies,

and that sanctions can be brought against

directors who have been found to have acted

dishonestly.

This is positive news as it should help deter

directors from using dissolutions to avoid

scrutiny and liabilities. However, we have

concerns around whether the Insolvency Service

has the resources to carry out the additional

investigations alongside its current workload.

If the legislation passes, and the Service is

given the additional resources to support its

new powers, it should mean fewer directors will

be able to misuse the dissolution process.

Caroline Sumner

Chief Executive of R3.

There’s no doubt

with the support

ending, we’ll

see an increase

in the number

of distressed

businesses, but

these are likely

to be divided into

two categories.

AN INEVITABLE RISE

I don’t think anyone would argue with the

suggestion that the Government’s support for

businesses has been crucial in preventing

the economic consequences of the pandemic

from leading to a serious increase in corporate

insolvencies.

However, with this support ending, and the

Government pursuing a careful post-lockdown

policy agenda that balances the needs of

businesses and creditors and introducing

new legislation to reduce the misuse of the

dissolution process, I suspect it’s highly likely

that corporate insolvencies will rise in the

future.

This suspicion is supported by data from the

Insolvency Service, which shows more than

4,500 fewer companies entered an insolvency

process in 2020 compared to 2019 and around

3,000 fewer companies entered one between

January and August of this year and the same

period for 2019.

The Service’s figures suggest that there

are several thousand firms which would have

become insolvent were it not for the pandemic.

However, questions remain about whether those

that have survived it to date can continue to

do so now the Government’s support is ending,

and when the increase in insolvencies will

happen.

There’s no doubt with the support ending,

we’ll see an increase in the number of distressed

businesses, but these are likely to be divided into

two categories: those who were distressed before

the pandemic and those that were distressed

because of the pandemic. Both of these will

likely have benefitted from the Government’s

support measures, but when any of these types

of business enter an insolvency process will

depend on the financial situation they’re in, and

how quickly their directors choose to take steps

to resolve it.

For this reason, and along with the new

temporary measures the Government has

introduced, I think it's unlikely we’ll see a

sustained increase in insolvencies until the

Spring of 2022 at the very earliest. Some sectors

will be harder hit than others, and factors other

than COVID – such as haulage issues, labour

force shortages, increased raw material costs

and Brexit – will all have an impact on whether

businesses survive the next six months. There

are further measures that the Government

could take to support struggling businesses: for

example, HMRC adopting a flexible approach

to Time to Pay arrangements would help to

reduce a possible surge in insolvencies as the

pressure on businesses ramps up over the next

few months.

Until that point, the profession will continue

to advise and support those who need our

expertise and remind those who may need it

of the benefits of engaging sooner rather than

later.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 11


INTERVIEW

ARRESTED

DEVELOPMENT

Denise Crossley FCICM talks to

Sean Feast FCICM about vulnerability,

laying off bets, and why she never

became a detective.

DENISE Crossley FCICM reflects

on her career in credit and

wishes she had pushed herself

forward much earlier. It’s a

remarkable statement for

someone who first became a

director of a debt collection agency at 21 and

has since gone on to become one of the most

highly regarded executives within the industry.

Originally from Wakefield, West Yorkshire

and educated at a local Grammar school, Denise

recalls an early school report that said she had

a tendency to boss the other children around

and disrupt the class with her constant chatter:

“I took that to mean I was a born leader and a

great networker,” she laughs.

Her father worked as a contracts director in

the building industry and her mother was a

nurse, and for a time she harboured thoughts of

becoming a physio. Her real ambition, however,

was to join the police. As it was, both professions

were thwarted because of her height: “Until the

early 1990s you had to be a minimum of 5ft 4ins

to join the Force and there was also a minimum

height to becoming a physio. You had to be

tall enough to be able to easily reach across

someone’s body!”

Failing to become a physio was not such an

issue, but being rejected by the Police left her

heartbroken: “Every time I watch one of the

detective programmes on television I think I

could have been that person and would have

been good at it!”

CAREERS’ ADVICE

Although encouraged to stay on at school,

Denise could see others around her taking jobs

and earning money and decided her academic

career was now over: “My mother and father

wouldn’t let me leave Sixth Form unless I had a

job to go to, so I went to see my careers’ advisor

who said that as I was quite good at English and

could type I should start off in administration.

So I became a secretary earning £17.50 a week

on a Youth Training Scheme. My mother was

very upset but as it was it turned out to be the

best thing that ever happened.”

Denise’s first job was working for a commercial

debt collection agency. The building comprised

three floors: on the ground floor, was a secondhand

bookshop; on the top, a betting office;

and sandwiched in-between was the collections

agency. “The betting shop was owned by the

brother of the man who owned the DCA, and

I could find myself one minute serving in the

bookshop, the next moment collecting a debt,

and the next laying off a hefty bet! It exposed

me to many different people and situations, and

there was a considerable amount of learning on

the spot.”

After four years with the business, and a move

to Harrogate, Denise was invited to become

a director: “It was 1 April and immediately

assumed it was an April Fool,” she remembers.

At that point, the business was mainly

focused on collecting business debts. Winning

American Express and GE Capital as clients took

Denise into the consumer space and at 30, she

bought the existing managing director out and

moved the office to Leeds to be closer to home.

As Operations Director and shareholder in

Moran Crossley UK Ltd, she grew both the

commercial and consumer portfolios within

the business before it merged with Newman

& Co, a small boutique agency, to become

Newman Crossley Ltd. At Newman Crossley,

she expanded further into the financial services

community and at the time of its sale to Arvato

had more than 150 full time employees.

She next set up Credit Solutions (Northern)

which was subsequently acquired by Hitachi

to become Hitachi Capital Credit Solutions:

“Hitachi had been a big client of ours and one

day the CEO of the UK business came to see

me about setting up a business specifically to

service the collections needs of the Hitachi

Group. I then became the only woman on the

main Board of Hitachi UK.”

AWAY FROM THE COALFACE

After three years on the board, and spending

too much time away from the coalface, Denise

looked for another challenge, and found herself

briefly working for her husband: “His business

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 12


INTERVIEW

AUTHOR – Sean Feast FCICM

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 13

continues on page 14 >


INTERVIEW

AUTHOR – Sean Feast FCICM

was in manufacturing and sales of chemicals to

the amenities sector and he had 20 or so reps out

on the road, all paper-based.

“Despite some initial resistance we got them

all laptops and modernised all of the processes

and policies such that we attained BS5750.

I remember he whooshed past my desk one

morning and without smiling told me to make

him a coffee, treating me like his secretary. I

made him a cup and slapped it down on his

desk,” she laughs. “I knew then it was probably

time to move on!”

Approached to start a debt management

company, Denise was quick to realise the

challenges that such businesses faced: “We were

doing the due diligence on a company we were

thinking of buying but decided against it. It

was just as well as soon after the company went

bust. We ended up buying their book of clients

and diversified into creating a very successful

consumer DCA – Improved Financial Solutions

– servicing a portfolio of clients across financial

services, motor, utilities and telecoms.”

Such was the success of the business that it

attracted interest from others, not least a world

leading Business Process Outsourcing (BPO)

business, Teleperformance. Teleperformance

acquired Denise’s firm in 2004, and she became

Managing Director of its collections arm.

It was an exciting time, responsible for

collections operations not just in the UK but also

interacting internationally, notably South Africa

and the Philippines. But again, Denise missed

the direct interaction with her colleagues and

customers and on leaving the business after

more than eight happy years spent 18 months

as a consultant to two other DCAs, helping them

improve their bottom line and supporting them

through FCA authorisation.

It was during this time that she was invited

to meet the team at Motormile Finance, a debt

purchasing business: “At the time it had around

70 people and was turning over c£800,000 per

month. Now it has more than 140 people turning

over £3.5 million per month, and we have

acquired almost four million customers.”

VULNERABLE CUSTOMERS

One of the first things Denise looked at was

the brand: “I have always taken the view that

any customer in the alternative lending space

is vulnerable, and so we looked at how the

business communicated and the language it

used, softening the suite of communications to

make it more accessible and retraining the staff

and management to change our approach in

areas where change was needed.”

Denise also took the opportunity of not only

doing right by their customers and clients, but

also by her own teams: “I introduced long-term

incentives so that everyone in the business can

benefit, and not just the senior management.”

One of Denise’s most significant achievements

was steering the business through FCA

authorisation under supervision. She sees this,

however, as an advantage: “It gave us a much

better understanding of what the FCA actually

expects,” she says.

“The name ‘Lantern’ was chosen for two

reasons,” Denise continues. “Firstly, because I

genuinely believe that we are a leading light in

the sector and secondly because we are a light at

the end of the tunnel for our customers. Working

with vulnerable customers as our USP meant

we were ahead of the game when it came to the

pandemic.

“Of course, most agencies will claim today

that they have policies in place to identify and

manage vulnerable customers, but we actively

buy portfolios of vulnerable debt and have

built a bespoke platform that gives us a true

single customer view. Having total visibility of a

customer’s debts ultimately means a significantly

better customer journey and a better customer

outcome. Our customers only have to make one

payment across multiple debt lines, and only

have to deal with one communication.”

Denise is proud that the work she and her team

have accomplished has been recognised with

both an Investors in People and an Investors in

Customers Gold award.

BRANCH ADVOCATE

Perhaps not surprisingly given Denise’s passion

for the credit industry, she is a Fellow of the

Chartered Institute of Credit Management, and

in the early days was a regular member of her

local branch: “It helped give me further insight

into the world of credit and how businesses

worked,” she says, “and I learned a great deal.

I still enjoy reading the Credit Management

magazine as it captures so many different

aspects of the industry.”

Denise is also a key figure in the Credit Services

Association (CSA), having spent a quarter of

a century on/off the Board: “I have never been

afraid of speaking up for the little guys,” she

laughs, “and take tremendous pleasure in being

able to help others and freely giving advice

where advice is needed.”

A previous winner of the title Businesswoman

of the Year, Denise is also an active champion of

helping other women make it in business: “It’s

much better than it was,” she sighs, “but it’s still a

hard slog and not yet where it needs to be.

“I remember one incident many years ago

when the directors were all meant to be paid the

same and I found out that one was getting much

more than I was. I was told it was because I had

no children, and he had three at a private school

that needed paying for, so he had more need of

it than me!”

Which brings us back to the start of the

interview, and Denise’s point about pushing

herself forward more: “If I were my younger self

again, I would have been more confident, much

earlier, in asking for what was rightfully mine.

Age or gender should never be a barrier to being

paid properly for the role you do.”

And does she regret never becoming a

detective? Perhaps that’s a question you might

like to ask her yourself.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 14


INTERVIEW

AUTHOR – Sean Feast FCICM

“The name ‘Lantern’

was chosen for

two reasons, firstly,

because I genuinely

believe that we are a

leading light in the

sector and secondly

because we are a

light at the end of

the tunnel for our

customers. Working

with vulnerable

customers as our

USP meant we were

ahead of the game

when it came to the

pandemic.’’

Denise Crossley FCICM

Chief Executive Officer,

Lantern.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 15


Thursday 24 March 2022

The Royal Lancaster, London

CATEGORIES ANNOUNCED

ENTER NOW

This year we have new categories and are excited to recognise

and applaud the success of you and your teams.

The British Credit Awards recognise the stand out achievements

of the most deserving individuals, teams and organisations in

the international credit industry. Join us as we celebrate your

achievements and recognise all the hard work you have achieved

this year. So take a look at the categories, and think which one you,

your colleagues or your team deserve. Enter or nominate today!

Here is your opportunity to be rewarded as what is recognised

as the highest accolade you can receive in your profession.

2022, it’s your chance to lift the trophy!

For more information visit

www.cicmbritishcreditawards.com

or scan the QR code below to be directed to our website


Entries open until

Friday 26 November 2021

2022 Awards Categories

B2B Team of the Year Award

B2B Supplier of the Year Award

Consumer Team of the Year Award

Consumer Supplier of the Year Award

Equality, Diversity & Inclusion Award

Innovation & Technology Award

Best Employer of the Year Award

Risk Management Team Award

Shared Service Provider of the Year Award

Debt Collection Agency of the Year Award

Insolvency Practitioner of the Year Award

Legal Provider of the Year Award

Apprentice of the Year Award

Giving Back Award

Rising Star Award

Resilience & Continuity Award

Sir Roger Cork Prize (Announced on the night)

Jenny Oldfield Supporting Women Award

Credit Professional of the Year Award

Outstanding Contribution to the Industry


INTERVIEW

SHOOTING

STARS

Sean Feast FCICM talks to Lisa Schorah

about a convent education, ice creams,

and the importance of winning a

national award.

LIKE so many high achievers in

the world of credit, Lisa Schorah

never set out to become a credit

professional. But she was always

interested in Business.

Originally from Wallasey on

the Wirral, she was educated at Upton Hall,

an all girls Catholic School. Her father was a

professional tennis coach working all hours,

but it was her teachers who inspired her

to learn more about the world of business.

Although predicted high grades, she took the

bold step to miss out on 6th Form and instead

enrolled on a Business course at Reaseheath, a

local College: “I was always fascinated by how

a business works, and how an organisation

gets to become a global success. I remember

learning about the man who invented the

Cat’s Eye (Percy Shaw) and it struck me

how such a simple idea could become

a global phenomenon.”

Lisa’s studying combined

Business with Event Management

and required a trek every morning

from her home to Nantwich: “I

would catch the coach every day

at 06.45 from outside a local

pub,” she recalls, “and having

been to an all girls Convent

school, college was something

of a culture shock. There was a

mix of different backgrounds

and all of the teachers were

known by their first names.”

Although a two-year

course, Lisa completed

her studies in one, and

as such was set further

work: “I didn’t mind at

all,” she says, “and would

go so far as to say I found

it enjoyable.”

ICE CREAM VENDOR

When not at her books,

she worked behind the

bar at a pub where her

mother was the cook and in a Showtime Ice

Cream kiosk in a local country park: “It gave me

my first experience of operations, and soon I

was stock taking and book keeping, and taking

decisions on when to open/close in line with the

most profitable times.”

When her studies completed, she began

looking for a job, and landed on her feet at Ross

Care, a major provider of wheelchair services

and mobility equipment on behalf of the NHS

and Local Authorities: “I was an apprentice in

an administrative role. I was only 17 with no

real idea of the world, but I absolutely loved it

and everyone there.”

One of three apprentices starting together,

Lisa had – in her own words – the ‘dumb luck’ of

working in a part of the business (Community

Equipment) where the directors were still very

hands-on and engaged, and from who she

learned a great deal very fast. In short order she

found herself working on tenders and in new

business meetings with local authorities and

trusts and travelling the length and breadth of

the country to support their clients, set up new

depots and train new starters: “When I started

I think there were just three drivers and two

people in the office. By the time I left, there

were closer to 40 people in our team.”

Although Lisa enjoyed some training on

various administrative platforms and system,

she was still yet to touch credit management

‘properly’: “I didn’t even know that ‘credit’ was

a ‘thing’,” she laughs.

“What I did know, however, was that every

so often I’d been told we’d exceeded our credit

limit, and I couldn’t get the supplies we needed,

or a delivery was being held up because they

hadn’t been paid.”

CATALYST FOR CHANGE

A change in family circumstances was the

catalyst for change, and after a dozen or so

years at Ross Care, by which time she had

advanced to Contracts Supervisor, she applied

for a role at Weightmans, a top 50 UK law firm:

“I was offered an administrator job but couldn’t

afford to take it, but then a different role came

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 18


INTERVIEW

AUTHOR – Sean Feast FCICM

“Winning the ‘Shooting Star’ Award – and being told

by a Chartered Institute that I was good at what I did –

made me feel very proud. I never thought I would win.”

up working in the company’s finance team

as a credit specialist.”

Again, Lisa struck lucky, both with an

interesting role and a leadership team

including Pete Taggart MCICM (Principal

Associate – Credit Manager) and Bob

Granger (Finance Director) happy to

invest in their people and talent.

She was immediately in a commercial

collections role, recovering unpaid debts

from the firms clients: “I had never

done collections before and was a little

nervous,” she admits. “But it was like

joining a new family. Everyone made me

feel very welcome and I made a point of

getting to know as many people as I could,

including those in the wider team.

“Partly it was because I didn’t always

want to be thought of as the ‘newbie’,

but principally because I was genuinely

interested to learn about what others

did and how the different disciplines –

cashiering, billing, collecting etc – came

together.”

CICMQ ACCREDITATION

Weightmans was first CICMQ accredited

back in 2016 (and has been permanently

recognised since, currently being the

largest UK Law Firm to be accredited)

and is an active supporter of the Institute.

Bob’s arrival at the firm was described

at the time by Sharon Adams FCICM the

CICMQ Assessor, as having brought a new

sense of energy and direction to the team.

It was not surprising, therefore, that

Lisa actively sought and was encouraged

to study towards a professional credit

management qualification and has

already started Level 3. The catalyst this

time was something more positive: a

winner in the CICM British Credit Awards

2021: “Starting at Weightmans was like

starting at the bottom all over again and it

was down to me to prove myself,” she says.

“Winning the ‘Shooting Star’ Award – and

being told by a Chartered Institute that I

was good at what I did – made me feel very

proud. I never thought I would win.”

At the time of going to press, Lisa is due

to take her next round of exams. Having

missed out on a degree, she perhaps

acknowledges that it was a terrible idea

to have left school early, but that happily

the love of learning has never left her. If

anything, it has become stronger still.

And what of the future? “I want to

become the guru for bad debt,” Lisa

laughs. “If there’s ever a debt that can’t be

collected, I want people to say, ‘this is a job

for Lisa!’

“I love learning and I am passionate

about sharing knowledge, so when Pete’s

ready to retire, I’d like to have his job!”

I wouldn’t bet against that happening.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 19


Bouncing Back

Invoice Finance can help support the

UK’s economic recovery.

AUTHOR – Alex Waterman

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 20


ALTERNATIVE FINANCE

AUTHOR – Alex Waterman

WITH everything that

has happened and how

much life has changed

in the last 18 months it

would take a very brave

or foolish person to

write an article on what is likely to happen

in the coming 18 months. Make up your

own mind which one – or both – of these I

might be.

By means of brief introduction for those less

familiar with the organisation, UK Finance

is the collective voice for the banking and

finance industry. We represent around 300

firms across the industry, acting to enhance

competitiveness, support customers and

facilitate innovation. Both as UK Finance and

through predecessor organisations, we are

pleased to have had the opportunity to work

with the CICM and the credit management

community for many years and pleased to

share our views on what the months ahead

may hold for UK businesses.

On the invoice finance and asset based

lending (IF/ABL) and wider commercial

lending side, we have worked closely with our

members to track the impact of the pandemic,

the lockdowns and the subsequent economic

shocks on their client businesses. When

thinking of the months since March 2020,

Donald Rumsfeld’s often quoted and sometimes

(unfairly) maligned ‘known unknowns and

unknown unknowns’ reference comes to

mind. The crisis that many were expecting

at the onset of the pandemic – one akin to

the global financial crisis of 2007/8/9 where

liquidity froze, and trust between financial

institutions and real economy businesses alike

evaporated virtually overnight – thankfully did

not come to pass.

The speed and sheer magnitude of the

extraordinary fiscal interventions the

Government put in place – the Government

lending schemes and Job Retention Scheme

most prominently – ensured that an immediate

2007 style liquidity crisis was averted. Instead,

there are some very different challenges

ahead for both UK businesses and the finance

providers that support them.

VARIED STORY

At the start of the pandemic, UK Finance’s IF/

ABL members were supporting and funding

over 39,000 UK businesses, with a combined

turnover of £280bn. While the data referenced

following reflects a wide range of businesses

across the real economy (both in terms of

sector and size) the story varies greatly from

sector to sector and business to business,

of course.

Historically the average IF/ABL client

experienced payment days of around 55 days

– and IF and ABL providers help their clients

manage the working capital gap between

goods and services being provided and

payment being received by advancing funding

against the debts owed and also against other

assets. When the first lockdown bit in late

Spring of 2020, as per the 2007 playbook, it was

assumed that the payment of invoices would

come to a complete standstill, with debt turn

expected to rocket upwards for a sustained

period. As credit managers will be more than

aware, initially this did happen. Within two

months the average debt turn had gone up by

seven days with many businesses reporting

significant issues with their debtors.

However, from June 2020, and coinciding

with the take up of much welcomed

Government guaranteed loan schemes and the

other interventions, debt turn started to come

back down, to the extent that by the end of the

year, businesses were paying their suppliers

on average five days quicker than they were

pre-pandemic. Today the average debt turn

has settled at 48 days, some seven days quicker

than pre-pandemic.

Reinforcing the evidence against there being

an access to finance crisis (at least across the

economy as a whole), in addition to this, latest

UK Finance bank data (to June 2021) shows

that SMEs are sitting on an additional £70bn

in cash in their bank accounts compared to

March 2020. This seems likely to be at least

partially due to businesses – understandably

– taking out Government guaranteed loans

in order to bolster reserves against potential

continuing economic disruption and placing

those straight on deposit.

COMMERCIAL LENDING

Looking at the use of wider commercial

lending facilities, as at June 2021, SMEs with

overdrafts were sitting with an additional

£2bn of headroom within those arrangements

compared to March 2020. A similar picture is

seen in terms of usage of agreed IF/ABL facilities,

with clients only utilising approximately 50

percent of their total availability, providing

£4bn of additional headroom compared to prepandemic

So what is the story on the other side of the

balance sheet? There are clearly some virtually

unquantifiable liabilities – Rumsfeld’s known

unknowns - that have been built up over the

last 18 months, but what we do know is that

over 1.7 million businesses have accessed

£70bn of Government-guaranteed funding

through the Bounce Back Loan Scheme and

Alex Waterman

Even better is

the fact that the

current picture

suggests that

much of the

Government

guaranteed

lending will be

repaid.

Facility March 2020 June 2021 Difference

Current Account Cr Balances £116bn £163bn £47bn

Deposit Accounts £85bn £108bn £23bn

Overdraft Headroom £7bn £9bn £2bn

IF/ABL Headroom £9bn £13bn £4bn

Total additional cash £217bn £293bn £76bn

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 21

continues on page 22 >


ALTERNATIVE FINANCE

AUTHOR – Alex Waterman

made use of the VAT Payment Deferral

Scheme with HMRC during 2020, with

the Government positioning this as an

effective £30bn + ‘cash injection’ for UK

businesses.

A rough comparison suggests that

purely from a cashflow perspective and

across the economy as a whole, ignoring

sectoral and geographic variations, things

aren’t looking as bad as one might think.

This is because these figures show that

there is ‘only’ a £30bn gap between how

much Government support has been

accessed (and required to be repaid) and

the additional cash currently available

to SMEs whether through cash balances

or already agreed finance facilities

compared to pre-pandemic.

The £30bn gap is still a significant

amount, but what we have seen in

the commercial lending world is a

significant move away from businesses

accessing lending products provided on

a commercial basis. We know that IF/

ABL client numbers have dropped from

39,000 in March 2020 to 35,000 in June

2021, and the number of SMEs taking out

new overdrafts has dropped to around 20

percent of the usual number expected.

The extent to which Government

guaranteed loans replaced lending that

could have otherwise been provided on

a commercial basis will never be known

but it seems clear there was at least some

impact.

All being said, this data is good news for

UK PLC and for the taxpayer. Even better

is the fact that the current picture suggests

that much of the Government guaranteed

lending will be repaid. UK Finance is

closely monitoring the situation to track

how this plays out.

LOOKING FORWARD

Looking ahead, IF/ABL data suggests that

the businesses that use these products

to support their working capital are

generally in a strong position as we start

to recover from the pandemic. Not only

do current clients alone have access to

£13bn of additional working capital, but

their sales are recovering at impressive

rates. For comparison ONS data suggests

that GDP grew by 6.5 percent in H1 2021

compared to H1 2020. Combined sales for

IF/ABL clients shows an almost 12 percent

increase per client in the same period.

Interestingly, taking into account the

reduction in client numbers, a calculation

of the growth experienced by the ‘average

IF/ABL client’ in this period highlights

staggering growth of 23 percent.

So why do businesses supported by

invoice finance and asset based lending

seem to be exceeding the general

economic recovery? It is true that there

are some sectors that have been more

significantly impacted by the pandemic

than others, and some of these sectors

wouldn’t necessarily use IF/ABL products

(such as retail and B2C businesses), but it

is fair to say that there are other sectors

that have done extremely well that also

wouldn’t necessarily use IF/ABL, so there

is probably some balance there.

Clearly the nature of IF/ABL products,

and the way in which IF/ABL providers

support their clients through the provision

What sort of businesses can use invoice

finance and asset-based lending?

Businesses that:

• Trade on credit terms with other businesses

• Are experiencing strong growth or recovery and are looking a type of

finance that instantaneously grows with their needs

• May be struggling to access finance due to barriers faced through

existing COVID related liabilities or recent poor financial results

• Wish to repaying BBLS, CBILS or VAT deferrals avoiding the monthly

cashflow burden that comes with that

• Would benefit from not just finance but also the knowledge and

experience that IF/ABL providers can provide

of flexible finance, knowledge and

support, allows those client businesses

to accelerate their growth or recovery. In

addition, the products have become more

accessible; in recent years we have seen

improvements in the use of technology

to help make invoice finance and asset

based lending much easier to access and

use.

BUSINESS RECONFIGURATION

In the coming months we are likely to see

many businesses looking to reconfigure

their businesses and their finances. This

may be challenging for many, particularly

as they will be posting COVID-19

impacted financial results. In addition,

businesses face many other challenges

including the recent re-introduction of

HMRC’s Secondary Preferential Creditor

Status, effectively ranking HMRC ahead of

floating charge holding lenders in respect

of any tax arrears. Bearing in mind the

billions of VAT deferrals noted earlier,

many businesses in sectors where the

majority of assets can only be secured by

floating charges are going to struggle to

access the finance needed.

Invoice finance and asset based lending

providers’ main source of security comes

in the form of a fixed charge over the

debts of a business, rather than through

a floating charge or strength of a personal

guarantee. Therefore IF/ABL providers are

keener than ever to talk to businesses,

and to ultimately provide them with the

support and finance they need to meet

the challenges and make the most of the

opportunities that lie ahead.

In summary, the Government interventions

have had a positive impact in supporting

businesses in managing the initial

economic shock of the pandemic and the

subsequent lockdowns. The Government

has now largely done its part, and now

it is the responsibility of the commercial

finance sector to step up to support

the next stage of the recovery as normal

commercial conditions start to return.

Alex Waterman is Principal, Invoice

Finance & Asset Based Lending,

Commercial Finance at

UK Finance.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 22


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Advancing the credit profession / www.cicm.com / November 2021 / PAGE 23


COUNTRY FOCUS

Despite its size,

Estonia is packing a

mighty technological

punch.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 24


COUNTRY FOCUS

AUTHOR – Adam Bernstein

“one of the most innovative nations

in Europe…and consistently strives

to provide a positive and stimulating

environment for rights holders.”

ESTONIA, the third in the triumvirate of the

Baltic States, not unsurprisingly shares a

common history with its neighbours. Once

ruled by the Danes, Swedes, Germans, and

Russians, it is similar in nature to Latvia

and Lithuania.

Settlers first arrived in the area around 8500BC. The

Germans followed in the 13th century and the area was

subsequently fought over by several states as it was

an east-west gateway. Then came a period of national

enlightenment in the 18th and 19th centuries that led

to Estonia becoming independent in 1918. But, as with

the other Baltic States, it was forcibly incorporated into

the USSR in 1940, the Third Reich in 1941, and the Soviet

Union – again – in 1944.

Freed in 1991 following the collapse of the Soviet

Union, the last Russian troops left in 1994. Estonia has

since sought closer economic and political ties with the

west and joined both NATO and the EU in the spring of

2004, joined the OECD in late 2010, and adopted the euro

in January 2011.

PEOPLE AND THE ECONOMY

Geographically, Estonia shares borders – albeit some

over water – with Sweden, Latvia, Russia, and Finland.

But it’s not a coherent or singular land mass; it features

mainland and some 2,222 smaller islands scattered

about the Baltic Sea. It’s the smallest of the three Baltic

states with just 45,339 km2 (compared to the similarly

sized Latvia and Lithuania with around 65,000 km2

each).

Unlike its Baltic neighbours, its population is rising

– from a low base, however. In 2021, the EU estimated

that Estonia had 1.32m residents versus 1.89m in Latvia

and 2.79m in Lithuania.

But with such a large landmass, it’s easy to comprehend

that Estonia is sparsely populated with just 29 people

per km2. Worldpopulationreview.com calculates that

Estonia holds just 0.02 percent of the global population

and that it “is the one hundred and fifty-sixth biggest

country in terms of population size.”

Tallinn is the largest, and capital, city with 431,000

inhabitants. The next largest is Tartu with just 94,000,

which is followed by Narva with 56,000 people. There

are 10 more towns with residents that can be counted

in five figures. Beyond that, are 33 towns and villages

with populations ranging from 10,000 down to just 846.

The population is, according to Macrotrends.net, which

quotes 2020 World Bank data, 69.2 percent urbanised – a

number which stood at 57.5 percent in 1960 and which

rose to a 1989 peak of 71.42 percent.

As for its economy, the 2021 OECD Economic Outlook

believes that the Estonian economy fared relatively

well considering the COVID pandemic and saw just a

2.7 percent contraction in GDP. It’s expected that GDP

will have grown by 2.9 percent in 2021 and will grow

5 percent in 2022 – mainly as a result of domestic

consumption and investment. Estonia’s Government

debt is forecast to rise from nine percent to 23 percent

by the end of 2021.

The CIA World Factbook puts imports – based on 2017

figures, which is in places that the Estonian government

still quotes – at $14.4bn which mainly come from

Finland (14 percent), Germany (10.7 percent), Lithuania

(8.9 percent), Sweden (8.5 percent), Latvia (8.2 percent),

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 25

continues on page 26 >


COUNTRY FOCUS

AUTHOR – Adam Bernstein

Poland (7.2 percent), Russia (6.7 percent),

Netherlands (5.9 percent) and China (4.7

percent).

Exports are listed, again based on 2017

figures, as $13.4bn to, in the main, Finland

(16.2 percent), Sweden (13.5 percent),

Latvia (9.2 percent), Russia (7.3 percent),

Germany (6.9 percent), and Lithuania (5.9

percent).

The standout observations from these

two sets of data are the proximity of trading

partners, and, interestingly, the inclusion

of imports from China but the absence

of the US in relation to either imports or

exports.

The country’s unemployment rate, from

data supplied by Trading Economics,

stands at 6.9 percent (2021), a steady fall

from a 2010 peak of 16.7 percent as noted

by Statista. But put into context, there are

– according to Trading Economics – nearly

642,000 people working in the country and

just 48,500 out of work.

Estonia is a reasonably young country

with nearly 65.5 percent of the people

are aged under 54 years (2020 CIA World

Factbook). And of those, 16.2 percent are

14 years or under, 8.8 percent are between

15-24, and 40.3 percent are aged 25-54.

However, while males outnumber females

in the 54 and underage bracket by between

five and eight percent, from age 55 the

position is reversed and quite markedly

so – by 20 percent for those aged between

55 and 64, and by 90 percent for the over

65s. An understanding of this demographic

could make a quantum difference in

how and what products and services are

marketed.

In more detail, the population identifies

itself ethnically as 68.7 percent Estonian,

24.8 percent Russian, 1.7 percent

Ukrainian, one percent Belarusian and 0.6

percent Finnish. In language, 68.5 percent

speaks Estonian, 29.6 percent Russian, and

0.6 percent Ukrainian. English, however,

is widely spoken and invariably used in

business.

MARKET OPPORTUNITIES

Exploitable opportunities are key for any

exporter and Investinestonia.com lists

many sectors – 20 all told – that are the

mainstays of Estonia’s economy. The list

includes mechanical engineering which

produces 14 percent of Estonia’s GDP and

which secures 13 percent of foreign direct

investment. R&D, CADCAM, industrial

parks, (contract) manufacturing, assembly

and testing are all key features of the sector.

Fintech is central too. Estonia is 99

percent cashless, has more than 80 fintech

companies, widely uses Blockchain

technologies and smart and distributed

systems, and is well versed in robotic

process automation.

On Cybersecurity, Investinestonia

cites the presence of firms such as CGI,

Symantec and Malwarebytes. The country

is also home to EU and NATO cyber defence

organisations.

And then there are other IT-related

sectors such as e-health which has

deployed a system where 95 percent of data

is created digitally, and patient records are

unified. Allied to this is an active biotech

sector with more than 70 companies and a

niche pharmaceutical sector; e-commerce

that revolves around digital advertising,

electronic ID and payment services; and

smart cities with smart roads and ports,

smart parking and ticketing, and location

services and telematics.

Kõpu Lighthouse (Estonian: Kõpu tuletorn) is

one of the best known symbols and tourist sights

on the Estonian island of Hiiumaa. It is one of the

oldest lighthouses in the world. Having been in

continuous use since its completion in 1531.

The lighthouse is quite unique with its shape

and an exception among lighthouses because it

has gone through all the stages from a medieval

landmark up to a modern electrified lighthouse.

Food is another important sector for

Estonia; it employs more than 15,000

people in some 700 firms and exports 33

percent of its production. In many cases,

high-quality and organic ingredients are

used, production is mechanised and is well

advanced – it apparently began supplying

Soviet space missions in 1962.

Bio and timber shouldn’t be overlooked,

especially as 51 percent of Estonia is

covered by forest. Investinestonia suggests

that 30 percent of the economy is tied

to the bioeconomy. The timber is all

certified and Eztonia is Europe’s largest per

capita producer of wooden residential and

commercial buildings, 90 percent of which

are exported. The country is also strong in

biomass production.

Chemicals is another key strand of

the Estonian economy which claims

expertise in shale oil and rare earth metals,

petrochemicals and fertiliser products. The

country has R&D, production and storage

facilities.

A sector that has also seen solid growth is

marine which, according to Investinestonia,

specialises in the design and build of small

and medium-sized commercial and leisure

vessels. The Estonian Maritime Academy

says that it produces qualified workers who

have used high-tech solutions along with

automation and technology to double the

country’s marine output in a decade.

There’s energy that’s focussed on shale oil

(and has been since the 1930s), sustainable

energy with waste-to-energy, solar, wind,

and biomass. The country’s energy strategy

requires renewables to produce most of

the electricity and heat by 2030. Electric

vehicles are important too; the country

claims to have installed the world’s first

nationwide electric vehicle network.

Lastly, there’s the tourism sector. 2018

figures from the OECD – the year is relevant

given the interruption caused by COVID –

note that the sector makes up 7.8 percent of

GDP and 4.3 percent of employment. That

year tourism receipts reached a record €2bn

from some 3.2m international tourists.

Top origin for travellers to Estonia are

Finland, Russia, Latvia, Germany, and

Sweden. But in terms of growth markets,

the US, Russia, United Kingdom and Japan

have all increased recently.

SETTING UP SHOP

As for doing business within Estonia,

the country’s Commercial Code permits

five forms of business entity: Private

limited company (OÜ) with share capital

and no personal liability. At least 2,500

euros in share capital is required and if

more than half of the board members

do not permanently reside in Estonia,

the company must give the Commercial

Register a contact name and address in

Estonia and the foreign owner’s address

and e-mail address.

Public limited company (AS) with one

or more natural or legal persons with

or without shares. Shareholders are not

personally liable and share capital of at

least 25,000 euros is necessary. Shares must

be entered in the Estonian Central Register

of Securities. If more than half of the

board members do not reside in Estonia,

the company must give the Commercial

Register a contact in Estonia where

documents can be sent.

General partnership (TU) with two or

more partners operating under a common

business name and with a partnership

agreement. Partners can be natural or

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 26


COUNTRY FOCUS

AUTHOR – Adam Bernstein

The Estonian Maritime Academy says

that it produces qualified workers who

have used high-tech solutions along with

automation and technology to double the

country’s marine output in a decade.

Photo credit: TalTech

legal persons, and all must be on the

Commercial Register. Members of the

partnership are liable for all business

obligations.

Commercial association (ühistu)

with the purpose of supporting and

promoting the economic interests of its

members through joint economic activity.

Generally, members are not personally

liable. Lastly, the sole proprietor with no

minimum capital but personal liability.

An entry in the Central Commercial

Register is necessary.

Foreign companies can establish

a branch in Estonia which must be

registered in the Commercial Registry.

Notably, a branch is not a business entity,

and the foreign owner will be liable for

obligations arising from the activities

of the branch. Given its strong pro-tech

bias, it’s not surprising that Estonia offers

e-Residency, a Government-issued digital

identity and status that grants access

to its digital business environment.

e-Residency allows companies to securely

authenticate themselves online and begin

trading while located overseas. A warning

note from Thompson & Stein advises

overseas firms – especially if outside of the

EU – to check if a double-taxation treaty

exists. That said, Estonia’s prime minister,

Kaja Kallas, recently told CityAM that

4,000 UK firms have – post-Brexit – taken

advantage of the e-Residency scheme:

“Her and previous Governments have

tried to make conditions as favourable as

possible for ‘our British friends.”

BUSINESS RISKS

Bearing in mind that bribery is illegal in

the UK and anywhere in the world that

UK businesses and employees operate,

it’s still worth noting that a new anticorruption

strategy for 2021-2025 was

agreed by the Estonian Government

in February 2021. Estonia has, since

2018, witnessed the discovery of money

laundering schemes involving suspicious

money being laundered through Estonian

branches of Scandinavian banks by

non-residents. Banks in Estonia have

improved their risk controls in recent

years as a result and rules and regulations

have been tightened. This has, however,

created a situation where non-residents

may face difficulties in opening bank

accounts in Estonia.

On intellectual property abuse,

the World Trademark Review says of

Estonia, that it’s “one of the most

innovative nations in Europe…and

consistently strives to provide a positive

and stimulating environment for rights

holders.” It adds that the Tax and Customs

Board is vigilant in tackling counterfeits,

and a recent court decision in favour of

Daimler outlines how companies can

protect their rights by seeking its help.

An example of Estonia’s proactivity in

technology is an uptick in local entities

registering ‘audio logos’ and taking

advantage of the ability to protect sound

marks. This, the publication says, has

been made possible by the elimination of

the graphical representation requirement

following the implementation of the EU

Trademark Directive into national law in

April 2019.

As an aside, World Trademark Review

lists many law firms and consultancies

that offer advice on protecting intellectual

property.

TAXATION

Corporation tax is set at 20 percent, but

only on distributed profits.

Income tax is similarly charged at 20

percent but with a tax-free amount of

€500 per month or €6,000 a year. However,

the tax-free exemption is tapered so that

those with incomes of €25,600 per year

lose the exemption entirely.

There’s also a social tax of 33 percent

that is levied on employers based on the

gross amount of pay. This tax comes with

a minimum obligation to pay at least

€192.72 per month per employee even

if an employee receives no pay in the

month.

VAT is set at a standard rate of 20

percent with a reduced rate of nine percent

for certain pharmaceutical products,

medical equipment for disabled persons,

books (but not e-books), newspapers

and periodicals and hotel accommodation.

A zero rate applies to transport.

Any business with sales revenues

exceeding €40,000 from the beginning of a

calendar year must register for VAT within

three working days following the day on

which the statutory obligation arises.

IN SUMMARY

Estonia may be small, but it’s mighty

and packs a technological punch. With

China making inroads into the country’s

marketplace, and the absence of the US,

now is the time for British exporters to see

what Estonia holds.

Adam Bernstein is a freelance business

writer.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 27


OFFICE LIFE

IT’S A CASE OF BACK TO REALITY

menzies.co.uk/creditor-services

When the pandemic hit in early 2020,

it felt like the world of work had

undergone a revolution, from which

there was no going back. But more

than one year on, workplaces are

starting to buzz again and employers

are preparing to expand their office

spaces, rather than shrink them. So

what’s changed and what role can

credit management professionals

and employers play in building back

a better workplace?

Attending a roundtable event,

chaired by the Chartered Institute of

Credit Management (CICM), and

hosted by accountancy firm, Menzies

LLP, a diverse group of senior-level

credit management professionals

and Board-level executives gathered

recently to share their experiences of

re-engineering office culture at a time

when restrictions are easing and life

for some office-based workers is

beginning to get back to normal.

To open the event, Sue Chapple,

chief executive of the CICM,

highlighted the plight of commercial

property landlords, many of whom

faced a wall of demands from

tenants at the onset of the pandemic

to downsize their portfolios and

switch to more flexible terms. While

this was undoubtedly a challenging

time, the truth is that some landlords

had started offering short-term

leases and adapting their

propositions to meet demands for

greater flexibility, well before the

pandemic. Commenting on how the

commercial property market

adapted, Ros Goode, managing

director at Avison Young, said:

“Some employers took drastic action

and reacted quickly by shrinking their

property portfolios to allow for more

remote working. However, some are

now realising that they acted

prematurely. Our conversations with

businesses at the moment are

centred on plans for growth and

expansion and those businesses that

retained most or all of their work

space, now find themselves better

placed and with more options when it

comes to managing the return to the

office.”

According to Ros, those commercial

property landlords specialising in

office space have fared well through

the pandemic, as, in general, tenants

have continued to generate revenues

and rents have been paid. Those

landlords with predominantly retail or

hospitality & leisure assets have

been less fortunate however, and

some have been experiencing

cashflow difficulties.

Sue Chapple added:

“Credit management

and business recovery

professionals have

been working closely

with the worst-affected

commercial property

agents to support them

in assessing the impact

of the pandemic on their

portfolios and find ways

to protect their cash

position. Some have

been able to invoke

‘force majeure’ clauses

in their insurance cover,

which, along with the

Government’s business

support package, has

helped them through

the pandemic.”

The Government’s decision to phase

out the temporary insolvency

protections, with effect from the 1st

October 2021, has pushed more

employers to focus on getting

workers back to the office as soon as

possible. However, some new

measures have been announced to

provide ongoing protection for small

businesses. Specifically, the debt

threshold for a winding up petition

has now been raised to £10,000 to

prevent creditors from enforcing

relatively small debts. This new

legislation also requires creditors to

seek payment proposals from

debtors, and to give debtors 21 days

to respond before they can proceed

with winding up action.

Simon Underwood,

business recovery partner

at Menzies LLP, said:

“The removal of most of

the temporary insolvency

protections is a wake-up

call to employers and a

push to get trading back

to some semblance of

normal, and more quickly

than some had imagined.

With the economic

activity rebounding,

employers are no longer

asking whether it is

possible to get workers

back to the office, but

how best to manage their

return and over what

timescale.

Those businesses that

can provide great work

spaces in prime locations

that are energy-efficient

and come with lifestyle

benefits like bike racks,

gyms, showers, coffee

machines and outdoor

terraces will have an

advantage when it comes

to retaining talented

employees and attracting

high quality candidates.

For commercial property

landlords, the outlook in

terms of demand for

quality office space is

improving.”

There is no right or wrong when it

comes to managing workers back to

the office and, in many cases,

employers are experimenting by

creating a bespoke hybrid model that

takes account of employees’ needs

and preferences. For example, some

employers are operating a 3/2

model; requiring workers to be in the

office for three days each week.

Others in London and some other

city centre locations, have found that

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 28


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working was working a challenge was a challenge for our for our

business business due to the due size to of the the size of the

workforce. workforce. However, However, now that we now that we For credit For managers, credit managers, much like much their like their culture and culture attracting and attracting and retaining and retaining

have the have technology the technology in place to in place to counterparts counterparts in other business

other business the best people, the best but people, even but more even so more so

facilitate remote facilitate working remote at working all levels, at all levels, functions, functions, there have there been have many been many after the pandemic.” after the pandemic.”

we are finding we are that finding there that is an there is an challenges challenges while working while from working home. from home.

upside. We upside. are now We able are now to recruit able to recruit Some have Some needed have to needed adapt their to adapt their Everyone Everyone at the event at the shared event the shared the

from a much from larger a much employment larger employment pool, role pool, in order role to in stay order in to touch stay with in touch with view that view the pandemic that the pandemic has been has a been a

as there is as no there reason is no why reason we can’t why we can’t workers more workers frequently more frequently and in a and in a challenging challenging time for employers time for employers and and

hire a worker hire a based worker in Leeds based to in Leeds work to work more structured more structured way. The way. best The best workers at workers all levels, at all mainly levels, because mainly becau

with a team with based a team at based the Essex at the Essex managers managers recognised recognised the importance the importance of the lack of of the human lack of contact human that contact that

office, for office, example. for example. The quality The of quality of of empathy of empathy and being and willing being and willing and many people many have people experienced. have experienced.

candidates candidates has improved has improved as a result. as a result. available available to listen to to workers’ listen to workers’ Most agreed Most that agreed a strong that focus a strong focus on

Coming into Coming the office into the is still office optional is still optional personal personal and professional and professional problems. problems. creating a creating positive, a inclusive positive, inclusive and and

at present, at although present, although teams are teams are John Kane, John head Kane, of strategic head of strategic supportive supportive office culture office would culture be would be

encouraged encouraged to meet up to for meet creativity up for creativity relationships relationships the CICM, at the CICM, even more even important more important in the future. in the future.

or cultural or reasons.” cultural reasons.”

commented: commented: “Over communication

“Over communication

did become did a become problem a for problem some for some

This report is based on a roundtable

For some For employees, some employees, particularly particularly teams, but teams, better but this better than a this lack than of a lack of event for employers and credit

young people young and people those and working those in working communication. in communication. Credit management Credit management management professionals, chaired by

metropolitan metropolitan areas, employers areas, employers noted noted professionals professionals tend to be tend astute to be and astute and the CICM and hosted by accountancy

that the return to the office can’t pick up on verbal and non-verbal firm, Menzies LLP.

that the return to the office can’t pick up on verbal and non-verbal

come quickly come enough. quickly Going enough. to work, Going to work, cues quickly, cues so quickly, coping so with coping home with home Menzies LLP’s Business Recovery

as opposed as opposed to working to from working home, from home, working was working less was of a problem less of a here problem here team offers practical support and

has become has a become lifestyle a choice lifestyle for choice for than it might than have it might been have elsewhere. been elsewhere. advice to credit managers and

such workers as they look forward to However, getting back to the office businesses of all sizes, across industry

such workers as they look forward to However, getting back to the office

sectors. Where possible, the firm’s

meeting up meeting with colleagues up with colleagues and and will help to will relieve help to some relieve of the some of the experts provide practical solutions for

value workplace value workplace comforts, comforts, such as such as pressure pressure on managers.” on managers.”

improving cash management and

free food free and food drinks, and as drinks, well as as the well as the

operational resilience and early

opportunity to socialise after work. Summing up one of the key engagement is key to improving

opportunity to socialise after work. Summing up one of the key

outcomes.

Employers Employers that are willing that are to willing fork out to fork messages out messages from the event, from the Karen event, Karen

for a few for treats a few and treats have and invested have invested Young, in director Young, at director recruitment at recruitment firm, firm, Get in touch by emailing Simon

upgrading upgrading their office their space office to space to Hays, added: Hays, “Employers added: “Employers can invest can invest Underwood, Insolvency Partner at

provide more lifestyle benefits and in creating a great workspace, but sunderwood@menzies.co.uk or call

provide more lifestyle benefits and in creating a great workspace, but

0207 465 1932.

more break-out more break-out areas, where areas, teams where teams they must they also must focus also on enabling focus on enabling

can meet can up, meet have up, found have it easier found to it easier human to connections. human connections. This has always This has always

entice workers entice back workers to the back office. to the office. been important been important to creating to the creating right the right

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 29


INTERNATIONAL

TRADE

Monthly round-up of the latest stories

in global trade by Andrea Kirkby.

TRADE NEWS PART ONE –

UK and New Zealand

THE UK is getting close

to a trade deal with New

Zealand but, what will

happen now that trade

secretary Liz Truss has

been moved to the Foreign

Office? She was said to be holding out

for better terms on financial services,

digital trade and the mobility of

people. Will her successor, Anne-Marie

Trevelyan, do the same?

The deal is important to the UK since

it helps with the attempt to join the

Trans-Pacific trade bloc – the CPTPP –

as New Zealand is a central member of

11-nation body.

The UK and New Zealand are close

to a trade agreement, but those in the

know have dismissed the (potential)

deal as making little difference to

British consumers. The story, however,

could be different for UK exporters

of gin, biscuits, chocolates and road

vehicles with lower tariffs being applied.

Take the Centre for European Reform.

It said: “…don’t think there will be

much noticeable impact whatsoever.

We’re talking about a country that’s

quite small and on the other side of

the world.” And the UK Trade Policy

Observatory took a similar line: “The

direct impact of a UK-New Zealand deal

can only be minuscule. The amount of

trade is negligible and New Zealand has

reoriented its trade away from the UK

since the 70s.”

Nevertheless, any trade deal is better

than no trade deal.

TRADE NEWS

PART TWO - China

NOT wanting to lose any influence, China has

just applied to join the CPTPP trade bloc.

It wants to keep its position as the world’s

second largest economy and sees the bloc as

part of this. Interestingly, the CPTPP started

life as the TransPacific Partnership and was

promoted by then-President Barack Obama

to challenge China's increasingly powerful

position in the Asia Pacific region. But

President Trump pulled the US out of the deal

and Japan led negotiations to create what

became the CPTPP.

It’s even more interesting that China's

announcement application came the day after

the UK, US and Australia launched a security

pact which atary influence in the region, a

move that has not gone down well in China

or in France – the latter lost out on sales of

submarines. UK exporters should plan for a

backlash from both.

TRADE NEWS

PART THREE – The US

DURING his late September trip to the US, Boris

Johnson met President Biden who, during

their meeting, watered down the chances of a

distinct US-UK trade deal. As a result, the UK – it

is thought – is now thinking about applying to

the existing trade arrangement between the US,

Canada and Mexico – known as the USMCA.

BITCOIN BECOMES LEGAL TENDER

EL Salvador has become the first

country in the world to make bitcoin as

legal tender with all the opportunities

and risks that it brings. Businesses

now must accept bitcoin as payment,

unless they are unable to provide the

technology; salaries and pensions

will still be paid in US dollars – the

country dollarized its economy in 2001.

The move, according to the country’s

president, Nayib Bukele, will “promote

foreign investment and make it

cheaper for expatriate Salvadorans

to send home billions of dollars of

remittances.” However, the change

prompted mass protests in the

country’s capital, and three out of four

Salvadorans were still sceptical about

its adoption. Many argue that bitcoin’s

volatility will dissuade businesses

and individuals from using it – a point

well made by a 20 percent drop in the

bitcoin price as soon as the change

came in.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 30


The life and Seoul of Korean stimulus

THERE’S little that can beat Government

largesse when it comes to stimulating an

economy. And South Korea is just about

to prove the point with a 2022 budget

that could raise Government spending

by 8.3 percent to $523bn and in so doing,

increase Government debt to 50.2 percent

of GDP – according to the Financial

Times.

The country’s president, Moon Jaein,

feels that the additional stimulus is

central to dealing with the effects of the

pandemic which have been exacerbated

by a vaccine shortage and a workforce

limited by COVID restrictions. Worse,

South Korean interest rates have been

Get fit – get brands

JUST as the fitness boom hit the world in the

1980s, so it’s moved to China according to the

Wall Street Journal. But it’s not all good news for

overseas firms; shares in local brands such as Li-

Ning and Anta have soared amid a ‘five-year mass

fitness’ programme.

While some hold the view that Chinese

products are cheap or ‘knock-offs’, it appears that

some Chinese shoemakers are shedding their poor

image and are utilising their better understanding

of what appeals to local consumers. Nike and

Adidas still account for 43 percent of the Chinese

sportswear market between them, but they need

to be aware of the market changes.

The message is clear: Aim high in China with

good quality products, especially in a market

being stimulated by the Government, but have a

keen eye on brand message and local rivals that

are rising.

lifted to keep a lid on surging credit and

top-heavy property prices.

But it’s not all bad news. GDP is

predicted to grow by four percent because

exports are doing well.

However, looking to the future, the

nation faces an ageing population

combined with a low birth rate that

could see South Korea follow Japan’s

growth trajectory. This, no doubt, will

change the focus for imports. But there

is a key opportunity: South Korea needs

to act on climate change – its fossil-fuel

sector is second only to China’s and just

five percent of electricity comes from

renewables.

Climate change – an opportunity for farmers

New Export Champions

THE Department for International Trade

recently announced a new batch of 54

‘Export Champions’ – successful exporters

who can help more British firms export

(more).

According to Government data, just one

in 10 British firms currently sells overseas

and the then international trade secretary,

Liz Truss, was keen to encourage more to

export. The new Export Champions join a

cadre of more than 400 others and includes

tailors to the Queen and a cyber-security

firm.

The scheme aims to form a nationwide

network of British firms that share their

success stories, offer practical advice and

lead by example. They advise potential

exporters by appearing at webinars,

roundtables, and events.

The scheme aims to

form a nationwide network

of British firms that share

their success stories.

Look towards Uzbekistan

UZBEKISTAN isn’t often in the news, but

it’s celebrating the 30th anniversary of

its independence from the former USSR.

However, what is notable is that in recent

years the country has sought to reform,

liberalise the economy and importantly,

attract foreign investors.

As to the sectors of the Uzbek economy

worth watching, one is tech since it

has many incubators for start-ups and

mentoring programmes; the number

of tech companies there is constantly

growing, no doubt encouraged by an

exemption from taxes and access to its

world-class space for innovation. Also

notable is the Government’s strategy

to engage the youth with, for example,

a programme that provides free online

coding courses for anyone over 13.

In Doing Business 2020 by the World

Bank, Uzbekistan was ranked among the

world’s most improved economies for ease

of doing business.

CURRENCY UK

THE Economist recently ran a story

that noted that climate change is likely

to do “great harm to regions that feed

millions” but “make a cornucopia” out

of once unproductive land. One study

it quotes, predicts that for each degree

temperatures rise, the yields of three

crops that supply around two-thirds

of mankind’s calorie intake – maize,

wheat and rice – will fall 7.4

percent, six percent and 3.2

percent respectively; this

will happen as the global

population grows to

around 9.7bn by

2064.

And crops are already on the move

towards areas that are warming up.

The Economist thinks that the “bravest

investors spy opportunity in lands

that currently support no farming

at all”, such as the northern regions

of Scandinavia. Russia, which has

“long talked of higher tempera-tures

as a boon”, is now the world’s largest

producer of wheat and is looking too at

soybeans.

Of course, changing land use isn’t

simple as it involves deforestation,

enriching of soil and water technologies.

But with adversity comes opportunity

for those with the ability to help.

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 1.18711 1.15561 Up

GBP/USD 1.38265 1.34139 Flat

GBP/CHF 1.28052 1.25520 Flat

GBP/AUD 1.89047 1.84253 Down

GBP/CAD 1.75484 1.68937 Down

GBP/JPY 157.954 148.975 Up

This data was taken on 20th October and refers to the

month previous to/leading up to 19th October 2021.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 31


PAYMENT TRENDS

Upward Trajectory

The latest payment performance statistics highlight

more steady improvement across regions and sectors.

AUTHOR – Rob Howard

WHILE the world of late payments remains

hugely unpredictable, it is good to see further

strides in the right direction, with a number of

improvements across regions and sectors.

The average Days Beyond Terms (DBT) across

regions and sectors in the UK reduced by 0.6 and

1.3 days respectively. In Ireland, the figures dropped by 1.8 and 2.3 days

respectively. Average DBT across regions in Northern Ireland reduced

by 0.1 days.

SECTOR SPOTLIGHT

The UK sector figures are mostly positive, with 16 of the 22 sectors

making reductions to payment terms.

The Energy Supply sector, which is generating plenty of news

headlines right now, made the biggest improvement, reducing payment

terms by 6.1 days. The Business from Home sector also made strides

forward, with a reduction of 5.6 days taking its overall DBT to 6.1

days, making it the joint-best performing sector tied with Hospitality.

International Bodies (-3.6 days), IT and Comms (-3.6 days), Mining

and Quarrying (-2.9 days) and Real Estate (-2.7 days) also made steady

improvements.

Of the six sectors moving in the wrong direction, Education saw the

biggest increase in late payment (+3.6 days). An increase of 1.8 days for

Manufacturing means it is now the worst performing sector with an

overall DBT of 16.8 days.

In Ireland, there have been a plethora of late payment fluctuations.

Last month we rightly highlighted the International Bodies, IT and

Comms and Other Service sectors for their impressive overall DBT of

zero days. However, all three moved in the wrong direction following

hefty increases of 4.3 days, 23.7 days and 34 days respectively.

Three sectors have risen to the top of the standings following equally

significant reductions – Energy Supply (-26 days), Water & Waste (-34

days) and also the Wholesale and retail trade; repair of motor vehicles

and motorcycles (-4.4 days) – who all now have an overall DBT of zero

days.

REGIONAL SPOTLIGHT

Across the UK, there were improvements in late payment in most

regions. The West Midlands saw the biggest deduction, with a drop of

3.7 days. The South West remains the best performing region, with an

overall DBT of 7.8 days following a further reduction of 0.7 days. The

North West and Northern Ireland are the only two regions going the

wrong way, with increases to payments of 3.4 and 0.3 days respectively.

The regional standings in Ireland are again impressive. Cavan,

Leitrim, Offaly, Waterford and Westmeath all maintain their position

at the top with an overall DBT of zero days. Joining them at the peak

of no late payments are Limerick (-22.9 days) and Longford (-13.6 days)

following impressive reductions.

In Northern Ireland, Connacht takes over as the best performing

region with an overall DBT of 3.7 days following a reduction of 2.6 days.

Munster also improved (-1.4 days), while Ulster (+0.9 days) and Leinster

(+3 days) moved in the wrong direction.

By Rob Howard

The UK sector figures are

mostly positive, with 16 of the

22 sectors making reductions

to payment terms.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 32


STATISTICS

Data supplied by the Creditsafe Group

AUTHOR – Rob Howard

Top Five Prompter Payers

Region September 21 Change from Aug 21

South West 7.8 -0.7

Scotland 9.4 -1.5

West Midlands 9.6 -3.7

East Midlands 10.3 -1

South East 10.5 -1

Bottom Five Poorest Payers

Region September 21 Change from Aug 21

East Anglia 18.6 -1.9

North West 14.3 3.4

Northern Ireland 11.6 0.3

Wales 11.3 -0.6

London 10.8 0

Top Five Prompter Payers

Sector September 21 Change from Aug 21

Business from Home 6.1 -5.6

Hospitality 6.1 1.3

Entertainment 6.4 1.4

IT and Comms 7 -3.6

Financial and Insurance 8.4 -1.6

Bottom Five Poorest Payers

Sector September 21 Change from Aug 21

Manufacturing 16.8 1.8

Energy Supply 16.7 -6.1

International Bodies 15.6 -3.6

Mining and Quarrying 15.4 -2.9

Construction 14.3 -2.6

Getting Better

Energy Supply -6.1

Business from Home -5.6

International Bodies -3.6

IT and Comms -3.6

Mining and Quarrying -2.9

Real Estate -2.7

Water & Waste -2.7

Construction -2.6

Other Service -2.5

Professional and Scientific -1.8

Financial and Insurance -1.6

Wholesale and retail trade -1

Transportation and Storage -0.7

Dormant -0.3

Business Admin & Support -0.2

Getting Worse

Energy Supply -6.1

Business from Home -5.6

International Bodies -3.6

IT and Comms -3.6

Mining and Quarrying -2.9

Real Estate -2.7

SCOTLAND

-1.5 DBT

Water & Waste -2.7

Construction -2.6

NORTHERN

IRELAND

0.3 DBT

SOUTH

WEST

-0.7 DBT

WALES

-0.6 DBT

NORTH

WEST

3.4 DBT

WEST

MIDLANDS

-3.7 DBT

YORKSHIRE &

HUMBERSIDE

-0.6 DBT

EAST

MIDLANDS

-1 DBT

LONDON

0 DBT

SOUTH

EAST

-1 DBT

EAST

ANGLIA

-1.9 DBT

Other Service -2.5

Region

Getting Better – Getting Worse

-3.7

-1.9

-1.5

-1

-1

-0.7

-0.6

-0.6

0

3.4

0.3

West Midlands

East Anglia

Scotland

East Midlands

South East

South West

Wales

Yorkshire and Humberside

London

North West

Northern Ireland

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 33 continues on page 34 >


PAYMENT TRENDS

AUTHOR – Rob Howard

In Ireland, there have been a plethora of

late payment fluctuations. Last month

we rightly highlighted the International

Bodies, IT and Comms and Other Service

sectors for their impressive overall DBT

of zero days. However, all three moved

in the wrong direction following hefty

increases of 4.3 days, 23.7 days and 34 days

respectively.

CONNACHT

-2.6 DBT

ULSTER

0.9 DBT

Getting Better

Water & Waste -34

Energy Supply -26

Construction -20.2

Transportation and Storage -19

Mining and Quarrying -18.3

Financial and Insurance -17.8

Health & Social -14.6

Business Admin & Support -14.4

Education -12.3

Wholesale and retail trade -4.4

Hospitality -0.9

Professional and Scientific -0.3

MUNSTER

1.4 DBT

LEINSTER

3 DBT

Top Four Prompter Payers – Ireland / N Ireland

Region September 21 Change from Aug 21

Connacht 3.7 -2.6

Bottom Four Poorest Payers - Ireland

Munster 4.7 -1.4

Leinster 8.7 3

Ulster 9.1 0.9

Getting Worse

Manufacturing 46.5

Other Service 34

IT and Comms 23.7

Real Estate 8.7

Entertainment 7.7

Agriculture, Forestry and Fishing 6.6

Public Administration 5.1

International Bodies 4.3

Top Five Prompter Payers – Ireland

Region September 21 Change from Aug 21

Cavan 0 0

Leitrim 0 0

Limerick 0 -22.6

Longford 0 -13.6

Offaly 0 0

Bottom Five Poorest Payers – Ireland

Region September 21 Change from Aug 21

Monaghan 91.8 0

Carlow 64.2 -0.8

Wexford 48.2 2.1

Kilkenny 21.1 21.1

Kerry 14.9 -3.4

Top Five Prompter Payers – Ireland

Sector September 21 Change from Aug 21

Energy Supply 0 0

Water & Wste 0 -34

Wholesale and retail trade 0 -4.4

Transportation and Storage 0.8 -19

Mining and Quarrying 1.2 -18.3

Bottom Five Poorest Payers – Ireland

Sector September 21 Change from Aug 21

Manufacturing 56.6 46.5

Business Admin & Support 42.2 -14.4

Agriculture, Forestry and Fishing 37.6 6.6

Other Service 34 34

Real Estate 26 8.7

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 34


ADVERTORIAL

Win-Win

Invoice Finance

The product putting credit teams –

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DAILY warnings of rising inflation

and disruptions across

multiple supply chains due

to labour shortages are giving

many CFOs sleepless nights.

If the pandemic was one big

challenge for receivables teams, the forecast

for the economy is another. So how can credit

controllers find ways to help their customers

through these unprecedented times whilst also

helping themselves?

The options used to be few, and none of

them came without either an unpalatable cost

or admin overhead. Now, however, trends in

consumer credit have percolated into the B2B

sector and one company has re-engineered

credit solutions for the digital age, with a

strong bias on making the customer experience

seamless and friction-free for credit teams and

their customers.

Chief Operating Officer at Data Interconnect

and former investment Banker Guy Miller said:

“We wanted to help our clients – corporate

credit teams – to help their customers without

harming the customer-creditor relationship.

We came up with a solution that is new

and different – we enable AR teams to offer

extended payment terms to customers without

increasing their own DSO or creating financial

debt for them or their customers.”

The product, called Corrivo Finance, is woven

into the e-Invoicing platform that provides

credit teams with the tools for e-Invoicing,

collections and disputes management, and now

offers finance. Working with leading insurers

and investment banks, Data Interconnect has

come up with a way for credit teams to offer

customers 30 or 60 extra days’ credit. There is

a cost to this, but it is far less than credit card

APRs. It can be paid either by the customer, or

by the supplier as a loyalty incentive.

“The FMCG and Construction sectors have

been badly hit by supply chain issues, and

our clients are looking to protect market share

and increase loyalty from their best customers

by offering more time to pay at no cost to

the customer. They are also offering smaller

customers with cashflow issues a practical,

low-cost solution to ride through the current

times,” said Guy.

In addition to offering extended credit terms

to buyers, the company offers Advanced Credit

to suppliers, paying them the full invoice value

on day one, while permitting customers to pay

on standard or extended terms. Both advanced

and extended credit solutions offer credit

teams the magic bullet of predictable cashflow

and lower DSO, which in the current climate

is a win-win both for suppliers and for their

customers.

So why is this anything new and different?

To start with, the product does not require

financial recourse to Supplier or Buyer (no

guarantees or security, no impact on anyone’s

credit rating). Secondly, the rates are extremely

low and 100 percent of the invoice value is

covered. Thirdly, there is no extra work for

credit teams or customers, as, far from being

designed as a finance product for businesses, it

has been crafted as a credit solution for credit

controllers and receivables teams that does

not require extra admin, security or bad debt

insurance. The solution is intended to enable

customers to ‘buy’ more time to pay if they need

it and for suppliers to accelerate cashflow. In

the current times, many businesses are seeing

this as a way to mitigate supply chain issues,

and free up capital to help them grow by

acquisition.

As Guy said: “Finance products used to be

designed by bankers for their benefit. We have

turned this on its head and have put credit

teams first, and in control over their cash flow.

We are a customer-first organisation and this

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Data Interconnect is a corporate partner of

the Chartered Institute of Credit Management.

www.datainterconnect.com

The solution is intended to enable customers to ‘buy’ more

time to pay if they need it and suppliers to accelerate cashflow.

Advancing the credit profession / www.cicm.com /November 2021 / PAGE 35


OPINION

The waiting game

COVID-19 and its impact on credit insurance.

AUTHOR – Simon Philpin

SINCE the pandemic began, it’s

been a rollercoaster of a ride in the

credit insurance world. When the

pandemic spread to Asia, the trade

credit impact followed the flow,

where we saw extended payment

terms being requested in Asia, the Middle East,

Europe, North America and finally, in South

America.

In Q1 2020, the credit insurance industry was

seriously concerned about the potential fallout

of claims on the entire industry. If the world was

in lockdown with businesses not trading and

not generating cash, this would ultimately lead

to insolvencies or default scenarios… or so we

thought.

Before COVID-19, the last significant event

to impact the trade credit industry was the

2008-2009 global financial crisis. At the time,

many businesses were underperforming,

which is why a large portion of the industry

acted by withdrawing significant amounts of

credit cover. This resulted in poor relationships

between insurers and brokers for many

years. During the global financial crisis, a UK

Government scheme was introduced to assist

the industry, but it could only be utilised if the

underlying insurer was still supporting the risk,

and in most cases, this wasn’t the case.

LESSONS LEARNED

Neither insurers nor brokers wanted a repeat of

2008-2009, particularly as credit insurance has

grown as a tool to obtain finance when financing

receivables, and a reduction in insurance would

have hit UK businesses and created a negative

financial impact. Accordingly, negotiations

with Government were swift, and a facility was

put in place from 1 April 2020, covering the

initial lockdown period and ending 30 June 2021

as the business economy started to return to

some level of normality.

As an industry, we anticipated a tsunami of

losses due to businesses being unable to trade

to generate cash to meet their liabilities. This

wasn’t just our industry, as many economists

around the world were predicting armageddon

scenarios which didn’t materialise.

Governments stepped up to not only provide

the insurance-backed scheme and stimulus

packages such as the furlough scheme and

business interruption loans, but also made

changes to UK insolvency laws, which made it

difficult to force a business into administration.

All those schemes worked very well because the

UK was awash with cash and thus, the expected

losses via claim pay-outs did not materialise.

The big question now is: did the scheme end

too early? In Q4 2021 and Q1 2022, we will see

whether businesses are able to survive on their

own without any support.

There were two main reasons why insurers

decided to end the scheme on 30 June 2021. The

first reason was the benign environment, where

we were not seeing any losses. The second

reason was that all insurers who wanted to be

a part of the scheme had to cede 100 percent

of their premium less costs. Therefore, the UK

Government was receiving millions to back

the scheme and insurers were being impacted

on their own performance, with each one also

having shareholders to answer to at AGMs.

LOOKING AHEAD

So what are we now seeing after the Government

scheme? It’s still very early days and insolvencies

still have not materialised in the way they

were envisaged. This could change, however,

particularly as the UK insolvency law returns to

normal in Q4 2021. We are also seeing insurers

being quite competitive in H2 2021, as they try

to recover lost revenue and get back to building

their portfolios. In addition, some broker

discussions that have circulated suggests that it

is a little tough in the market at the moment,

due to the fact we are seeing a historic low level

of claims, but the market does ebb and flow

and it can only take one loss in a sector for our

product to see a significant rise in enquiries.

The one side of the market which is doing

well in 2021 is the non-cancellable insurance

providers, a product we have considerable

experience of at Markel. In uncertain times,

businesses want certainty of cover and a

non-cancellable insurance solution certainly

provides the comfort, especially if the insured is

financing their receivables. After all, no finance

director wants their finances being impacted

by a credit insurer. Given the market is very

competitive, there couldn’t be a better time to

secure your receivables, particularly if you are

seeing additional finance with the assistance of

a credit insurance policy.

Simon Philpin is Senior Underwriter and Head

of Business Development Global – Trade Credit

at Markel International.

Given the market is very competitive, there couldn’t be

a better time to secure your receivables.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 36


OPINION

AUTHOR – Simon Philpin

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 37


LEGAL MATTERS

SECRET SQUIRREL

Is a commission paid in secret enough to

rescind a loan agreement?

AUTHOR – Peter Walker

are no secrets except the

secrets that keep themselves,’

wrote George Bernard Shaw in

‘Back to Methuselah’, a series

of plays, but in the Southwest

‘THERE

of England secrets that ceased

to keep themselves had repercussions for lenders.

In two cases the borrowers sought rescission of

loan agreements and mortgages, and eventually

the judges of the Court of Appeal in Wood v

Commercial First Business Ltd [2021] 3 WLR 395

had to decide whether what was once a secret was

a sufficient reason to decide in their favour.

In the years 2006 and 2007 one of those

borrowers, a buffalo farmer and producer

of mozzarella cheese, had borrowed various

amounts secured by mortgages over farms near

Shepton Mallet in Somerset. The loans were made

by a person owning and controlling both the

broker and the lender. The borrower paid various

fees and commissions.

Further to the west in 2005 the second borrower,

described as ‘a hardworking farmer’ but ‘in no way

a financial expert’, also obtained finance secured

by a mortgage over his farm near Wadebridge in

Cornwall. He too paid a fee to the broker, and the

lender provided the finance. The broker and the

lender were the same as those involved in the

transactions in Somerset.

There was, however, a secret. Unbeknown to

the two borrowers the lender paid commission

to the broker. The Broker’s terms and conditions,

however, included a promise to inform the

borrower of any fees of £250 or more paid by the

lender to the broker.

The lender went into liquidation, and the

loans themselves were subsequently assigned

to third parties. The borrowers then defaulted

on the loans, and they claimed that the secret

commission, much higher than £250 so in breach

of the agreement, entitled them to rescind the

loan agreements. The first consideration of the

Court of Appeal judges was whether there had to

be a fiduciary relationship between the borrower

and broker as ‘a necessary precondition to relief

against the payer of the undisclosed commission

to the broker’.

ETHICAL RELATIONSHIPS

The first borrower alleged that the undisclosed

payments to the broker amounted to a breach

of fiduciary duty causing loss or damage to that

borrower. A fiduciary duty arises out of a legal

or ethical relationship of confidence or trust

between the parties, such as between an agent

and its principal. An alternative interpretation

was that those payments amounted to bribes.

The result of that interpretation was that the

borrower could recover all the losses arising from

entering into the mortgages, such losses to be

assessed as damages for fraud. Other possibilities

were that the borrower could recover the

undisclosed commission from the lender or even

to rescind the mortgages completely.

There was some guidance in the decision of

Slade J in Industries & General Mortgage Co Ltd

v Lewis [1949] 2 All ER 573. For the civil law a bribe

did not necessarily involve a moral judgment,

but it meant a secret commission comprising

three elements. The person making the payment

firstly is the agent of the other person with whom

he or she is dealing. Secondly, the payee knows

this, and there is thirdly a failure to disclose the

circumstances. The definition did not require the

complication of a fiduciary relationship between

the parties.

There was a complication in the case of the

second borrower, who claimed that he relied

on the broker because of his lack of skill or

experience in financial matters. He claimed that

this amounted to a fiduciary relationship. In

the Wood case David Richards LJ could find no

indication that the judge in the original trial was

identifying such a relationship.

David Richards LJ therefore continued

to consider the meaning of bribe in these

circumstances, i.e. in the context of civil

remedies. It went beyond the idea of a corrupt

payment. It includes any payment or gift made

as an inducement to an “agent” and not disclosed

to a ‘principal’. Motives are irrelevant, and there

is an irrebuttable presumption in law in favour

of the principal and against the payer. David

Richards LJ added that a bribe could induce the

payee to be in breach of his or her duty to another

person,

TELEGRAPH CABLES

He and the other judges of the Court of Appeal

turned for guidance to judgments in other cases.

They had to go back for a long time to examine the

judgment in Panama and South Pacific Telegraph

Co v India Rubber, Gutta Percha and Telegraph

Works Co [1875] LR 10 Ch App 515. The defendant

there had appointed the plaintiff to make and lay a

submarine telegraph cable from Peru to Panama.

Payments were to be made by instalments in

response to certificates issued by the plaintiff,

which appointed an engineer for this purpose.

The plaintiff would pay him a commission of 1.5

percent of those payments. The engineer was a

very busy person because the defendant agreed to

pay him a total of £80,000 for his other work in the

laying of the cable.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 38


LEGAL MATTERS

AUTHOR – Peter Walker

The plaintiff did not discover this until later,

when it started proceedings to rescind the

contract, and for the repayment of what

had been paid. It made a claim against the

engineer for repayment of the commission.

It was successful both in the court of first

instance and on appeal.

Mellish LJ considered that ‘the laying of

the cable was a material part of the contract’,

so ‘the defendants must have known that the

plaintiffs required honest and disinterested

advice.’ It depended on the engineer for that

advice. Mellish LJ concluded that in these

circumstances the plaintiff would not have full

benefit of the contract, and it could rescind

that agreement.

A more extreme example of what can

happen if secret commissions are misused

is in Shipway v Broadwood [1899] 1 QB 369,

where the defendant agreed to buy two horses

subject to a certificate of their soundness from

a vet. The defendant paid a fee to the vet, who,

unbeknown to him, also would receive from

the plaintiff a commission on the sale. The

defendant alleged that the horses were not

sound, and he stopped the cheque. All the

facts were then revealed, and they included

the payments to the vet. Chitty LJ concluded

that ‘the plaintiff placed [the vet] in a position

in which his duty conflicted with his interest’.

FIDUCIARY RELATIONSHIP

That was a case involving a secret commission,

but there can be a halfway house, where

the existence, but not the precise detail,

of a commission is known, i.e. a halfsecret

commission. There is an example in

McWilliams v Norton Finance (UK) Ltd (trading

as Norton Finance) (2015) 1 All ER (Comm)

1026. The claimants wanted a loan both to

consolidate an existing arrangement and to

enable them to build a conservatory. The

defendants offered credit broking services,

and helped them to obtain the finance, in

particular a consumer loan. The plaintiffs

agreed to pay fees and commission.

The documents provided by the plaintiffs

indicated that the defendants might receive

commission from lending companies, but

they gave no further details. Tomlinson LJ

noted that the statement of claim included

the assertion that the claimants had not been

informed of the payment of the commission

nor of the amount. The defendant asserted that

it provided information only to the claimants

seeking finance, nothing more, and they had

to make their own choices from that.

Tomlinson LJ nonetheless ruled that there

was a fiduciary relationship between the

claimants and the defendant because there

was a relationship of confidence and trust.

The defendant should not have placed itself

in circumstances where its duty and interest

might conflict. It should not profit from

the trust reposed in it without the informed

consent of the claimants. There was no

such informed consent, and the defendant

was ordered to account for the additional

commissions received. The defendant was in

liquidation, so the victory might not have been

all that helpful.

FULL DISCLOSURE

There was a suggestion in the Wood case that

the commissions were half secret, which

would require proof of a fiduciary relationship

between the parties, but on the evidence, or

perhaps lack of it, the judges of the Court of

Appeal rejected this contention. Judges would

no longer have to consider the complexities

of fiduciary relationships in these cases. They

would have to examine the role of the broker.

In the Wood case the commissions were

secret and consequently undisclosed. The

broker had a duty to provide disinterested

advice. The loan contracts would be rescinded

subject to satisfactory arrangements for

counter restitution to be agreed or determined

by the courts.

Mortgage agreements in future could be

cancelled if brokers receive commissions

from lenders undisclosed to borrowers. The

problem for borrowers is that they may never

know, and only litigation, probably because

they defaulted on the loans, would reveal the

truth in a court of law.

Peter Walker is a freelance journalist.

The defendant

alleged that the

horses were

not sound, and

he stopped the

cheque. All the

facts were then

revealed, and

they included the

payments to the

vet.

Advancing the credit profession / www.cicm.com / November 2021 / 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

High Court Enforcement Group is the largest

independent and privately owned High Court

enforcement company in the country, with more

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HighRadius provides a cloud-based Integrated

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organisations to reduce cycle time in the order-tocash

process and increase working capital availability

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E: infoemea@highradius.com

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Bottomline Technologies (NASDAQ: EPAY) helps

businesses pay and get paid. Businesses and banks

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Operating across seven UK offices, Menzies LLP is

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outsourcing, wealth management and business

recovery – the latter of which includes our specialist

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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

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

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In a credit management environment, these services

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T: +44 (0) 1302 513 000

E: sales@keyivr.com

W: www.keyivr.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.

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E: uksales@tinubu.com

W: www.tinubu.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

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have an active input into our product development

and evolution.

T: 01235 856400

E: info@credica.co.uk

W: www.credica.co.uk

Advancing the credit profession / www.cicm.com / November 2021 / 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

Court Enforcement Services is the market

leading and fastest growing High Court Enforcement

company. Since forming in 2014, we have managed

over 100,000 High Court Writs and recovered more

than £187 million for our clients, all debt fairly

collected. We help lawyers and creditors across all

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later. We achieve 39 percent early engagement

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multi-award-winning technology provides real-time

reporting 24/7.

T: +44 (0)1992 663 399

E: wayne@courtenforcementservices.co.uk

W: courtenforcementservices.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 • 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 corporate Credit Control

teams with Accounts Receivable software for bulk

e-invoicing, collections, dispute management and

invoice finance. The modular, cloud-based Corrivo

platform can be configured for any business model.

It integrates with all ERP systems and buyer AP

platforms or tax regimes. Customers can self-serve

on mobile friendly portals, however their invoices are

delivered, and Credit Controllers can easily extract

data for compliance, audit and reporting purposes.

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

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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.

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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 / November 2021 / 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

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

Visma | Onguard is a 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. This enhanced visibility with the secure sharing

of critical data ensures optimal connection between

all processes in the order-to-cash chain, resulting

in stronger, longer-lasting customer relationships

through improved and personalised communication.

The Visma | Onguard platform is used for successful

credit management in more than 70 countries.

T: 020 3868 0947

E: edan.milner@onguard.com

W: www.onguard.com

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/

Chris Sanders Consulting – we are a different

sort of consulting firm, made up of a network of

independent experienced operational credit and

collections management and invoicing professionals,

with specialisms in cross industry best practice

advisory, assessment, interim management,

leadership, workshops and training to help your

team and organisation reach their full potential in

credit and collections management. We are proud to

be Corporate Partners of the Chartered Institute of

Credit Management and to manage the CICM Best

Practice Accreditation Programme on their behalf.

T: +44(0)7747 761641

E: enquiries@chrissandersconsulting.com

W: www.chrissandersconsulting.com

The CICM Benevolent Fund is

here to support members of

the CICM in times of need.

Some examples of how CICM have helped our members are:

• Financed the purchase of a mobility scooter for a disabled member.

• Helped finance the studies of the daughter of a member who

became unexpectedly ill.

• Financed the purchase of computer equipment to assist an

unemployed member set up a business.

• Contributed towards the purchase of an orthopaedic bed for one

member whose condition was thereby greatly eased.

• Helped with payment for a drug, not available on the NHS, for

medical treatment of another member.

If you or any dependants are in need or in distress, please apply today – we are here to

help. (Your application will then be reviewed by the CICM Benevolent Fund committee and

you will be advised of their decision as quickly as possible)

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 42


HIGH COURT ENFORCEMENT OFFICERS ASSOCIATION

A question of parity

If court fees can be increased to take into account

inflation, why are similar adjustment not made to

High Court enforcement fees?

AUTHOR – Alan J Smith

AT the end of September,

a number of court fees

were increased following a

Government consultation

that took place earlier in

the year. Since the fees

hadn’t been reviewed since 2016, the

rationale for this increase was to account

for historic inflation.

Some of the fees increased were around

sealing a Writ of Control, possession and

delivery, the enforcement of which is the

main focus for our members, High Court

Enforcement Officers in England and

Wales.

It begs the question – if court fees

charged to the court user are subject to

inflationary increases, then why do other

associated High Court enforcement fees

remain untouched?

The last change to High Court

enforcement fees took place over seven

and a half years ago. After its Transforming

Bailiff Action consultation response in

January 2013, the Government set fees

for High Court and non-High Court

enforcement stages in the Taking Control

of Goods (Fees) Regulations 2014.

The principles on which they are

based, including the stages, are designed

to encourage prompt settlement of the

judgment debt to allow creditors to receive

the money that is owed to them. The

compliance fee has undoubtedly helped to

improve that.

That consultation included recommendations

on fees by Alexander Dehayen for the

Ministry of Justice. The report stated: “The

report recommends that the Fee Structure

undergoes a full review at intervals of four

years, with interim reviews after the second

mid‐review year, supported by ongoing interim

measures to monitor the successful

operation of the Fee Structure. Between review

dates the various fee levels should be

indexed to RPI, and updated annually, with

Percentage Fee thresholds updated periodically.”

Despite this, to date there have been zero

reviews of the enforcement fee structure

since it was introduced in 2014.

In order to remain an effective option

for businesses and individuals seeking to

recover debts owed to them via Writs of

Control, an urgent review of High Court

enforcement fees is needed.

Interestingly, the Government’s most

recent consultation on court fee increases

elicited a number of responses by

participants from a range of sectors, including

legal, public, property, enforcement

and court users. They suggested that the

principle of inflation should be applied to

enforcement fees, supporting the index-linked

fee structure proposed in the

Transforming Bailiff Action consultation

report.

Interestingly, the report from the March

2021 consultation did not provide any

Government response to these suggestions.

In addition to maintaining the

effectiveness of High Court Enforcement,

our members are private businesses, not

a Civil Service department. What other

business is expected to continue to operate

without permission to increase the fees

they charge, while their own costs are

increasing in line with inflation?

Like all businesses, the enforcement

industry has had additional costs placed

on it with the fully justified requirement to

comply with Coronavirus legislation.

So, when can High Court enforcement

officers expect to be paid in line with

inflation, rather than taking the brunt of a

real term annual decrease in the value of

their services, with no sign of change on

the horizon?

Moving forward, while we all have grown

accustomed to inflation being a part of

life, and a perfectly reasonable reason for

increasing court fees, introducing a big

hike every five to 10 years does seem like

an odd approach across the board. Smaller

annual increases to account for inflation

would seem to be more appropriate for

everyone involved.

In the meantime, though, we’re looking

to Government to extend the principles of

the inflationary catch-up increases to other

important parts of the justice system.

Definitely hoping and arguing for sooner,

rather than later.

Alan J Smith FCICM, is Chair of the High

Court Enforcement Officers Association.

Introducing a big hike

every five to 10 years

does seem like an

odd approach across

the board. Smaller

annual increases to

account for inflation

would seem to be

more appropriate for

everyone involved.

Alan J Smith FCICM

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 43


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Advancing the credit profession / www.cicm.com / November 2021 / PAGE 44


BRANCH NEWS

CICM WEST MIDLANDS

ANNUAL AWARDS

AUTHOR – Peter Cartwright

Will Powell receiving his award from Peter Cartwright

THE 2021 CICM West

Midlands Awards took place

at The Canal House bar in

Birmingham and celebrated

those that achieved coveted

CICM Awards in 2020.

With the ceremony cancelled in 2020 due

to COVID, the ceremony gave the CICM the

chance to honour achievements from the

previous year. Will Powell was called up to

accept the Shield after winning the Student

of the Year in 2019.

This was presented by Education Officer

Pete Cartwright, who also welcomed Kelly

Booth to the stage for excellent marks

in Credit Management and Accounting

Principles; Chery Jerrams for the highest

marks in Credit Management from the West

Midlands; and Kelly Booth again, who won

the 2020 Student of the Year.

Kelly Booth receiving her award.

Chery Jerrams receiving her award.

Kelly Booth receiving her award.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 45


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.

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COLLECTION SKILLS FOR THE NEW CREDIT FUTURE – Monday, 22 November at 12:30pm

ADVANCED SKILLS IN COLLECTIONS –Monday, 22 November at 14:30pm

BEST PRACTICE SKILLS TO ASSESS CREDIT RISK – Monday, 22 November at 10:00am

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.

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Advancing the credit profession / www.cicm.com / November 2021 / PAGE 46


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OPINION

Testing Times

How best practice credit management can avoid

Late Payment. Part One

AUTHOR – Derek Scott FCICM

IN the summer edition of Credit

Management the question was posed

‘can we turn the tide of late payment?’

The answer is of course ‘yes’, and how?

Through quality credit management.

I know from more years than I care

to remember at the coal face that quality credit

management is the secret to getting paid. Of

course, COVID-19 has made a difficult task

more difficult still, but in my time, I had my

own fair share of troubles too with recessions,

strikes etc. What I do know is that the issue will

never be solved with legislation. Legislation is

almost invariably too difficult to enforce, and

inevitably businesses find their way around it.

It is being suggested in some quarters by people

who have no real knowledge of the day-to-day

problems of credit management that legislation

cures all. It doesn’t. There is a huge gap between

theory and what happens in practice.

Let me explain. There are three types of

customer: those who pay; those who will pay

but make you work for it; and those who will

try not to pay if they can help it. This last group

comes in many guises. Every credit manager

will have experienced slow payment but the

effects of slow payment can be minimised in

the same way as you can minimise the impact

of bad debts – by being properly organised.

On the presumption you have been able

to get your teams safely back into the office,

hopefully you will be able to get back to work

with a well-defined yet flexible system and

strategy. If you have either set in stone, you will

seldom achieve what I consider is an acceptable

level of performance. Flexibility is key.

Part of that strategy will include the use of

technology. Now of course, technology has

come a long way, especially in recent years,

but even if you have an all-singing, all-dancing

platform, the truth is it is still an aid and not

a solution. Only good credit management

practices will solve your late payment

problems. My strategy was – and would still be

– that of the ‘credit salesman’. This was a glass

half full as opposed to the glass half empty style

of credit management. My staff approach to the

customer was the mirror image of a sales team

operation – a point I shall return to later.

RISK ASSESSMENT

Firstly, let us look at the different functions.

We all know prevention is better than cure

so quality risk assessment is naturally key to

survival. Having a keen eye on business failures

and bad debts provide a simple barometer

of slow payment. But so too does a thorough

On one occasion

I found the sales

team had agreed

not just to 90-day

terms but that the

clock only started

ticking once

the invoice was

authorised, which

as we all know

is the gateway to

slow payment. To

add insult to injury,

they also received

a turnover volume

discount!

understanding of some basic terms.

I well recall at a creditors’ meeting regarding

a company failure, where a credit manager

could not understand how the business had

failed given that it had ‘capital fully employed’.

He took this to mean that the company was

making good investments, not that it was

starved of cash! Banks, with good reason,

are careful about what they say about their

customers but it was once said that the only

useful bank reference was a bad one!

Do credit managers today make much use

of trade references? I used to ask for three as

I found in some cases a potential customer

regularly paid two companies for reference

purposes and everyone else had to wait – some

longer than others. One should also beware of

a reference from a business that is somehow

connected to the company you are giving credit

to, perhaps a subsidiary or other part of the

Group.

Then, of course, there are credit agency

reports. Remember, these are quite often

based on a snapshot in time (depending on the

sophistication of the CRA – some have access

to very up-to-date information though much

of it is still, by admission, historic). I recall

obtaining a glowing report on a construction

company stating they were good for business

up to a million pounds. I discovered through a

credit circle contact, however, that there were

at least two winding up orders in the pipeline. I

advised the company I had obtained the report

for not to do business with them.

My advice, unfortunately, was ignored as they

knew the directors from a previous company

and trusted them. They had been wined and

dined at a swanky London restaurant. The

inevitable happened. Inside one month, they

had run up a bad debt of three quarters of a

million pounds.

Another thing to watch out for is when one of

your sales team suddenly states that they have

a large order from someone who always used to

deal with a competitor. There could be a good

reason. We used to refer to them as ‘bad debt

tourists!’

PAYMENT TERMS

Payment Terms and Conditions can be a major

factor in slow payment. Our terms were 30

days from the end of the month in which the

invoice (or valuation) was dated. So our DSO

target was 60 to 70 days including the invoiced

month. This was achieved because of our very

tough but flexible approach to payment terms.

These terms were quoted on every piece of

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 48


OPINION

AUTHOR – Derek Scott FCICM

documentation we produced, and even

on notices on the walls of my company’s

branches.

Our terms were one thing, but what

about our customers’ terms? I was often

surprised to find that in some businesses,

the credit manager had never even see a

customer’s order with a view to checking

what terms had been agreed. Often this

led to disputes and problems later down

the line if they stated their payment

terms applied to a transaction, and not

ours.

On one occasion I found the sales team

had agreed not just to 90-day terms but

that the clock only started ticking once

the invoice was authorised, which as we

all know is the gateway to slow payment.

To add insult to injury, they also received

a turnover volume discount!

I viewed all orders and we never

accepted 60- let alone 90-day terms. I

would negotiate these with the customer,

and if the value of the order justified

it, and they would not agree to our

terms, then I would negotiate special

terms – perhaps 40 or 45 days, and

in one or two cases 55 days. In

agreeing to a longer term, however,

I would attach certain conditions,

especially in relation to disputes

and, in those days, cheque

collection. Only one ever failed

where in fact the person who

signed the agreement commented

that I had more clauses than

Moses! The point is that 30-day

terms mean absolutely nothing

unless specified as being from the

date of transaction or month end

etc. It has to be qualified.

To be continued…

Derek Scott FCICM is a freelance

business writer.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 49


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Advancing the credit profession / www.cicm.com / November 2021 / PAGE 50


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 has launched

critical AR Factsheets

for EMEA countries

Powered by

Powered by Baker Ing, country specific factsheets have been

provided for up-to-date information on payment performance,

legislation, and the effects of COVID-19 and Brexit. The

factsheets are designed for credit professionals, and they

cover legal business forms, credit risk data, collections

protocols, enforcement and much 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-thespot

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% of 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.

Visit cicm.com to view country specific factsheets from,

Germany, Italy, Czech Republic, Spain, France, UK.

CHARTERED

BAKERING.GLOBAL CHARTERED INSTITUTE OF CREDIT MANAGEMENT

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 51


HR MATTERS

Capability and dismissals

Fallahi v TWI and the Employee Tribunal’s

ability to ‘go behind’ a final written warning.

CAN the Employment

Tribunal (ET) ‘go behind’

a final written warning?

This was answered in

Fallahi v TWI where

a tribunal held that

an employee's dismissal was fair; it

declined to look behind the final written

warning, disregarding various challenges

to it.

Mr Fallahi worked as a senior project

leader and issues over his performance

were raised in the first 18 months of his

role. Mr Fallahi was invited to a capability

hearing by letter, which said: ‘‘I must

advise you that a potential outcome of the

hearing could be a first or final written

warning.’’

He was issued with a final written

warning after the meeting and was set

objectives over the next three months.

Two months in, and Fallahi was not

close to meeting these new objectives.

AUTHOR – Gareth Edwards

His employer offered him the option of

continuing with the plan or leaving with

one month’s pay. Fallahi's employment

did not end; he was signed off sick. He

was dismissed several months later,

to which he brought a claim for unfair

dismissal.

The ET found that the reason for

dismissal was capability, that the decision

was reasonable and that even if it had been

procedurally unfair, it was inevitable that

a fair process would have led to dismissal.

Fallahi's appeal said the ET was wrong

to conclude that it could not go behind

the final written warning; was wrong to

find that the final written warning was

within the range of reasonable responses;

and that the ET was wrong to consider

whether the final written warning was

manifestly inappropriate, rather than

considering whether procedural flaws in

the warning process tainted the ultimate

decision to dismiss.

When considering the appeal, the ET

noted the limited scope for going behind

a final written warning when considering

fairness. The ET was required to judge

the reasonableness of the dismissal in all

the circumstances, not simply whether

the final warning was reasonable or

appropriate. The warning was only one

relevant factor.

The ET noted although in some conduct

cases, a final warning can leave an

employee ‘hanging by a thread’ – awaiting

dismissal for another unconnected

matter. In such cases, the ‘validity’ of the

final warning will be critical. However,

the ET held that this was not such a case.

In this case, the employer had been

dealing with the performance issues of

the employee over a long period, part

of which led to a final written warning.

The ET was therefore entitled to find

that the warning was within the range of

reasonable responses.

A recent CIPHR study into employers’

attitudes towards staff working from

home has revealed that more than

two thirds of the 150 employers polled

(68 percent) are considering reducing

the pay of employees that choose

to continue to work from home

permanently.

This is even though 53 percent of the

employers have saved money by having

more employees working remotely. The

survey – Returning to the office – what

UK workers actually want found that its

Home workers and pay cuts

more likely that larger companies would

consider reducing the pay of employees

that opt for home working permanently,

while 10 percent of employers have

already permanently reduced location

allowances during the pandemic.

A May 2021 CIPHR study found that

73 percent of employees would accept

some reduction in pay for permanently

home working. 32 percent of those

would accept a pay cut of 10 percent,

the median acceptable pay cut was 3.5

percent.

CHANGES to the Off-Payroll Regulations,

known as IR35, came into force on 6

April 2021 and could potentially affect

the position of non-executive directors

(NEDs) who provide services through

their intermediary companies.

If such NEDs are caught by IR35, they

would be subject to income tax and

both employer and employee National

Insurance contributions.

The IR35 regulations now extend to

companies who are unable to claim that

they are a small company within the

NEDs and IR35

meaning of section 382 of the Companies

Act 2006 and have a UK presence.

Under IR35 rules, a NED’s office holding

responsibilities could attract employment

status if their role goes beyond that

of a normal office holder. This could

include providing impartial advice and

constructive criticism to the board which

strays into the realms of being involved in

the day-to-day operation of the company.

However, an individual contracting

through their service company and

operating consultancy services which

does not carry out the day-to-day

management activities of a director may

be deemed to be outside the scope of

the IR35 rules. Hirer companies should

be aware that even if they make a status

determination statement which finds that

the NEDs services or assignments are

outside the scope of the IR35 regulations,

HMRC can challenge such a decision.

Gareth Edwards is a partner in

the employment team at VWV.

www.gedwards@vwv.co.uk

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 52


Advancing the credit profession / www.cicm.com / November 2021 / PAGE 53


TAKE CONTROL OF

YOUR CREDIT CAREER

ORDER TO CASH PROCESS SME

Stockport, £42,500-£47,500 + benefits

In this pivotal role, you will assist the Head of OTC, ensuring

process changes support AR Strategy. Representing the UK

OTC in process improvement and various projects, you will

lead continuous improvement initiatives/projects through root

cause analysis, data gathering & problem solving. You will have

an extensive OTC, credit control/collections background and

experience of managing a team. Ref: 4064584

Contact Joanna Taylor-Coburn on 0161 926 8605

or email joanna.taylor-coburn@hays.com

SENIOR CREDIT CONTROLLER

Heathrow, £30,000-£45,000

Working for a global freight forwarder and supply chain business,

you will be responsible for over 1,000 accounts including managing

Amazon as a key account. Your key focus will be to ensure the

top 20 accounts are chased effectively and escalating aged

debt is brought down quickly whilst driving and leading process

improvements with senior management. Ref: 4054061

Contact Mark Ordoña on 07565 800574

or email mark.ordona@hays.com

ACCOUNTS RECEIVABLE MANAGER

Basingstoke, £45,000

Managing a team of six within the receivables function, this role

will oversee and take responsibility for all collections and sales

ledger activities. You will manage your team on a day-to-day basis,

and will be responsible for appraisals, training and leading them

to hit targets. Other duties include escalated queries, producing

detailed cash flow/aged debt reports, and risk management.

Ref: 4071362

Contact Natascha Whitehead on 07770 786433

or email natascha.whitehead@hays.com

CREDIT CONTROLLER

Central London, £35,000

In this newly created role you will work within a growing finance

team at a top London insurance firm. Due to recent expansions

and mergers, there is the opportunity to take on core credit

responsibilities, as well as additional responsibilities within the

team. This role will enable you to gain valuable insurance sector

experience whilst progressing in your career in credit.

Ref: 4074101

Contact Daniel Lee on 020 3465 0020

or email daniel.lee1@hays.com

hays.co.uk/creditcontrol

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 54


TRAIN FOR THE

YEAR AHEAD

My Learning – free skills

training from Hays

To find out more visit

hays.co.uk/mylearning

TEMPORARY CREDIT CONTROL & BILLINGS

Chertsey, £30,000

A skilled credit control professional is required to join a leading

global organisation, initially on a temporary basis. This varied role

will encompass both billings and collections. Managing your own

ledger, you will be responsible for collating and reconciling data,

to ensure prompt and timely invoices are produced. Cash collection

and query resolution will also form part of this role.

Ref: 4035268

Contact Natascha Whitehead on 07770 786433

or email natascha.whitehead@hays.com

CREDIT CONTROLLER

Norwich, £23,000-26,000

An exciting opportunity to join an expanding group business

after the creation of their new shared service centre. The role

will be managing a portfolio of customers enabling you to build

lasting relationships. You will be responsible for the credit risk

analysis, cash collection (with targets around DSO levels), account

reconciliations and debt reporting among other things.

Ref: 4039426

Contact William Plom on 01603 760141

or email william.plom@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 Natascha Whitehead, Hays Credit

Management UK Lead on 07770 786433.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 55


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

Studying Member

Catherine Stern

Joanne Grainger

Samuel Johnson

Ethan Aghanian

Lucy Perry

Olivia Walker

Grace Laidler-Ball

Jake Cave

Benjamin Close

Kingsley Lambert

Elizabeth Johnson

Veronika Toth-Sipos

Sarah Stokes

Claire Pigott

Debra Quinn

Rosie Perfect

Christian Hartigan-Jeremiah

Laritza Diaz Miranda Walsh

Julia Hill

Anneka Day

Sophie Faulkner

Janice Newton

David Maguire

Louise King

Fraser Trevor-Pacheco

Sara Taylor

Fiona James

Associate

Kyle Hynes Abhishek Mukundhakshan Makav Perera

WE WANT YOUR BRANCH NEWS!

Get in touch with Andrew Morris by emailing andrew.morris@cicm.com

with your branch news and event reports. Please only send up to 400 words

and any images need to be high resolution to be printable, so 1MB plus.

CM

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consumer and commercial credit professionals

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Advancing the credit profession / www.cicm.com / November 2021 / PAGE 56


CICM Resource Centre

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and your team

Member Exclusive resources

Whether you’re completely new to credit

management or want to take your skills to the next

level, our free guides, toolkits,

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Advancing the credit profession / www.cicm.com / November 2021 / PAGE 58


Switch to Direct Debit

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Advancing the credit profession / www.cicm.com / November 2021 / PAGE 59


Cr£ditWho?

CICM Directory of Services

COLLECTIONS

COLLECTIONS LEGAL

CONSULTANCY

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.

Guildways

T: +44 3333 409000

E: info@guildways.com

W: www.guildways.com

Guildways is a UK & International debt collection specialist with over

25 years experience. Guildways prides itself on operating to the

highest ethical standards and professional service levels. We are

experienced in collecting B2B and B2C debts. Our service includes:

• A complete No collection, No Fee commission based service

• 10% plus VAT commission for UK debts

• Commission from 22% plus VAT for International debts

• 24/7 online access to your cases through our CaseManager portal

• Direct online account-to-account payments, to speed up

collections and minimise costs

If you are unable to locate your customer, we also offer a no trace, no

fee, trace and collect service.

For more information, visit: www.guildways.com

COLLECTIONS (INTERNATIONAL)

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.

BlaserMills Law

London – High Wycombe – Amersham – Silverstone

T: 01494 478660

E: jar@blasermills.co.uk

W: www.blasermills.co.uk

Blaser Mills Law’s commercial recoveries team is internationally

recognised, regularly advising large corporations, multinationals

and SMEs on pre-legal collections, debt recovery, commercial

litigation, dispute resolution and insolvency. Our legal services

are both cost-effective and highly efficient; Our lawyers are also

CICM qualified and ranked in the industry leading law firm rankings

publications, Legal 500 and Chambers UK.

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.”

Chris Sanders Consulting

T: +44(0)7747 761641

E: enquiries@chrissandersconsulting.com

W: www.chrissandersconsulting.com

Chris Sanders Consulting – we are a different sort of consulting

firm, made up of a network of independent experienced

operational credit & collections management and invoicing

professionals, with specialisms in cross industry best practice

advisory, assessment, interim management, leadership,

workshops and training to help your team and organisation reach

their full potential in credit and collections management. We are

proud to be Corporate Partners of the Chartered Institute of Credit

Management and to manage the CICM Best Practice Accreditation

Programme on their behalf. For more information please contact:

enquiries@chrissandersconsulting.com

CREDIT INFORMATION

CoCredo

Missenden Abbey, Great Missenden, Bucks, HP16 0BD

T: 01494 790600

E: customerservice@cocredo.com

W: www.cocredo.co.uk

CoCredo has 19 years’ experience in developing credit reports for

businesses and in 2019 we were honoured to be awarded Credit

Information Provider of the Year at the British Credit Awards. 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.

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.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 60


FOR ADVERTISING INFORMATION OPTIONS

AND PRICING CONTACT

paul@centuryone.uk 01727 739 196

CREDIT INFORMATION

CREDIT MANAGEMENT SOFTWARE

CREDIT MANAGEMENT SOFTWARE

Company Watch

Centurion House, 37 Jewry Street,

LONDON. EC3N 2ER

T: +44 (0)20 7043 3300

E: info@companywatch.net

W: www.companywatch.net

Organisations around the world rely on Company Watch’s

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

HighRadius

T: +44 (0) 203 997 9400

E: infoemea@highradius.com

W: www.highradius.com

HighRadius provides a cloud-based Integrated Receivable

Platform, powered by machine learning and AI. Our Technology

empowers enterprise organisations to reduce cycle time in the

order-to-cash process and increase working capital availability by

automating receivables and payments processes across credit,

electronic billing and payment processing, cash application,

deductions, and collections.

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.

Data Interconnect Ltd

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

We are dedicated to helping finance teams take the cost,

complexity and compliance issues out of Accounts Receivable

processes. Corrivo is our reliable, easy-to-use SaaS platform

for the continuous improvement of AR metrics and KPIs in a

user-friendly interface. Credit Controllers can manage more

accounts with better results and customers can self-serve on

mobile-responsive portals where they can query, pay, download

and view invoices and related documentation e.g. Proofs of

Delivery Corrivo is the only AR platform with integrated invoice

finance options for both buyer and supplier that flexes credit terms

without degrading DSO. Call for a demo.

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.

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.

Visma | ONGUARD

T: 020 3966 8324

E: edan.milner@onguard.com

W: www.onguard.com

Visma | Onguard is a 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. This enhanced visibility with the secure

sharing of critical data ensures optimal connection between all

processes in the order-to-cash chain, resulting in stronger, longerlasting

customer relationships through improved and personalised

communication. The Visma | Onguard platform is used for

successful credit management in more than 70 countries.

DATA AND ANALYTICS

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.

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.

ENFORCEMENT

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.

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.

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

Court Enforcement Services is the market leading and fastest

growing High Court Enforcement company. Since forming in 2014,

we have managed over 100,000 High Court Writs and recovered

more than £187 million for our clients, all debt fairly collected. We

help lawyers and creditors across all sectors to recover unpaid

CCJ’s sooner rather than later. We achieve 39% early engagement

resulting in market-leading recovery rates. Our multi-awardwinning

technology provides real-time reporting 24/7. We work in

close partnership to expertly resolve matters with a fast, fair and

personable approach. We work hard to achieve the best results

and protect your reputation.

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 61


Cr£ditWho?

CICM Directory of Services

FOR ADVERTISING INFORMATION

OPTIONS AND PRICING CONTACT

paul@centuryone.uk 01727 739 196

ENFORCEMENT

INSOLVENCY

PAYMENT SOLUTIONS

High Court Enforcement Group Limited

Client Services, Helix, 1st Floor

Edmund Street, Liverpool

L3 9NY

T: 08450 999 666

E: clientservices@hcegroup.co.uk

W: hcegroup.co.uk

Putting creditors first

We are the largest independent High Court enforcement company,

with more authorised officers than anyone else. We are privately

owned, which allows us to manage our business in a way that

puts our clients first. Clients trust us to deliver and service is

paramount. We cover all aspects of enforcement – writs of control,

possessions, process serving and landlord issues – and are

committed to meeting and exceeding clients’ expectations.

FINANCIAL PR

Menzies

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

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

W: menzies.co.uk/creditor-services

Our Creditor Services team can advise on the best way for you

to protect your position when one of your debtors enters, or

is approaching, insolvency proceedings. Our services include

assisting with retention of title claims, providing representation

at creditor meetings, forensic investigations, raising finance,

financial restructuring and removing the administrative burden

– this includes completing and lodging claim forms, monitoring

dividend prospects and analysing all Insolvency Reports and

correspondence.

For more information on how the Menzies Creditor

Services team can assist please contact Giuseppe Parla,

Qualified Insolvency Practitioner, at gparla@menzies.co.uk

or call +44 20 7465 1919.

LEGAL

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

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.

FORUMS

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.

FOR ADVERTISING

INFORMATION OPTIONS

AND PRICING CONTACT

paul@centuryone.uk

01727 739 196

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

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.

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.

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

Portfolio Credit Control, a 5* Trustpilot rated agency, solely

specialises in the recruitment of Permanent, Temporary & Contract

Credit Control, Accounts Receivable and Collections staff

including remote workers. Part of The Portfolio Group, an awardwinning

Recruiter, we speak to Credit Controllers every day and

understand their skills meaning we are perfectly placed to provide

your business with talented Credit Control professionals. Offering

a highly tailored approach to recruitment, we use a hybrid of faceto-face

and remote briefings, interviews and feedback options.

We provide both candidates & clients with a commitment to deliver

that will exceed your expectations every single time.

Cr£ditWho?

CICM Directory of Services

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 62


View our digital version online at www.cicm.com

Log on to the Members’ area, and click on the tab labelled

‘Credit Management magazine

Just another great reason to be a member

Credit Management is distributed to the entire UK and international

CICM membership, as well as additional subscribers

Advancing the credit profession

www.cicm.com | +44 (0)1780 722900 | editorial@cicm.com

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 63


Fill your vacancy or find your next career

move at www.portfoliocreditcontrol.com

RECRUITING FROM

YOUR OFFICE...

Portfolio Credit Control, part of

the Portfolio Group, are proud

to be the only true specialist

Credit Control recruitment

agency in the UK.

...OR

REMOTELY

Specialising in solely recruiting for Credit

Controllers and Credit professionals since

2008. We place permanent, temporary and

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Our expert market knowledge & industry

experience is trusted by SME’s through

to Global Blue Chip businesses including

FTSE 100 companies across the UK for all

their Credit Control hiring needs.

We recruit for: Credit Manager / Head of Credit Control; (Senior)

Credit Controller / Team Leader / Supervisor; Credit and Billing

Manager; Sales Ledger / Accounts Receivable (Manager);

Credit Analyst.

Contact us to hire

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Scan with your phone to fill your vacancy or find your

next career move at www.portfoliocreditcontrol.com

Contact one of our specialist recruitment consultants to fill your vacancy or find your next career move!

LONDON 020 7650 3199

1 FINSBURY SQUARE, 3 RD FLOOR, LONDON EC2A 1AE

MANCHESTER 0161 836 9949

THE PENINSULA, VICTORIA PLACE, MANCHESTER M4 4FB

www.portfoliocreditcontrol.com

recruitment@portfoliocreditcontrol.com

theportfoliogroup

portfolio-credit-control

portfoliocredit

Rated as Excellent

Advancing the credit profession / www.cicm.com / November 2021 / PAGE 64

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