Weekly Blog by Philip King, CEO of the ICM - 'Towards a better future'

This will be my last blog for 2011 so I'm pleased to focus on a couple of real positives.

First, congratulations to Martin Lewis for passing the 100,000 signatories threshold with his petition to make financial education a compulsory part of the school curriculum. The milestone is significant because it means the subject must now be discussed by Parliament, and it's an important subject well worth debating.

The report generated by the All Party Parliamentary Group on Financial Education for Young People says that "two-thirds of people in the UK feel too confused to make the right choices about their money and more than a third say they don't have the right skills to properly manage their cash". If we allow children to leave school without the necessary skills to manage their money we are going to reap the deserved harvest in years to come. As credit professionals we know only too well the impact of over-indebtedness and that is why the ICM has encouraged its members to engage in the DebtCred project delivering financial education to 14-19 year-olds.

DebtCred is just one initiative and there are numerous similar projects, materials and voluntary activities all with a similar aim and many accredited by pfeg (Personal Finance Education Group) that exists to help schools plan and teach financial capability. A huge amount of good work goes on but it is all ad-hoc and dependent upon the willingness and appetite of individual schools and indeed teachers to engage. When financial education is a compulsory part of the curriculum, all children will receive training in what is a vital skill. I've heard the argument that there is little point in addressing financial education until basic numeracy and literacy skills are adequately addressed. Of course that is true, but the two are not mutually exclusive; even someone who can't read or write has to manage their money, and both should have focus within the curriculum.

Secondly, the Forum of Private Business has been engaging many organisations in preparing a letter to Mark Prisk, the Business Minister urging government to have a clear and detailed plan to address the issue of late payment which can, and all too often does, cripple a small business. The Institute is a co-signatory to the letter and it suggests a number of specific actions that might be taken.

Government has done some good things with its Prompt Payment Code (hosted and administered by the ICM), and its current Finance Fitness campaign but more needs to be done and it needs to be done more cohesively. I'm writing these words shortly after being interviewed on BBC Radio 5Live Wake up to Money and my message is clear. Government needs to recognise late payment for the issue it is and formulate a plan to address it. The business culture needs to change such that paying on time is the norm rather than the exception. But businesses themselves have to be smarter at getting the basics of credit management right, and we credit professionals need to be willing to share our skill and expertise so that our customers can deliver cash for their businesses just as we deliver cash for ours.

The recently launched ICM Online Services (icmOS) SME Collection Toolkit is an attempt to provide a practical tool to achieve that aim.

The ICM press release can be found here, the FPB release here, our Managing Cashflow Guides here, and the icmOS SME Collection Toolkit here.

If you would like to listen to Philp's interview on BBC Radio 5Live click here.

I hope 2011 has been a good year for you and - after some relaxation time at Christmas - I hope 2012 will be even better. See you next year!

Weekly Blog by Philip King, CEO of the ICM - 'A source for good'

A slightly unusual topic for me this week prompted by recent personal experience. I was involved with a police force at the weekend about a missing person. The details and circumstances aren't important but the police wanted to know everything I knew about the missing person who has gone AWOL many miles from home and may need help.

My wife and I shared all we knew (which wasn't much to be honest) and my wife referred the police to Facebook which included a number of friends in the area where they were looking, and had comments that might give clues as to their whereabouts. We were asked if we had a picture of the individual and we confirmed we had but pointed out that a more recent and clearer one was on Facebook.

Extraordinarily, a few minutes later we received a phone call asking if we could download the picture and email it, along with any other relevant information, because the police didn't have access to Facebook and so couldn't use that source of information! I don't know if this is common to all police forces and I don't know the detailed reasons why access is denied but - in today's age - I was incredulous that such a productive source of information couldn't be used!

I discussed the use of Facebook in tracing debtors following the release of the OFT's Debt Collection Guidance a few weeks ago and shared my view that the content of the guidance was being misrepresented by the media. We've also recently heard the ongoing debate about how social media was insufficiently monitored during the riots across the UK in the summer.

Social media is a powerful tool that can be used for good - as well as bad - but it strikes me that the potential 'dangers' of Facebook et al and sensitivities over privacy, while understandable, are getting in the way of progress. It certainly seems absurd that the police could not pursue what to me would have been a blindingly obvious line of enquiry.

Whether we like it or not, social media is here to stay and we can't just ignore it. The ICM has heavily embraced Twitter, LinkedIn and Facebook because we know a proportion of our members are using them and we see many benefits.

I fear, however, that in certain cases bureaucracy is winning and the loser is someone who could really need help!

Weekly Blog by Philip King, CEO of the ICM - 'Keep calm and carry on'

Not much good news from George Osborne yesterday then: six more years of austerity, even more public sector jobs to go, falling household disposable incomes, earnings growing slower than inflation until 2014, only 0.7 percent growth in the economy for the whole of next year, and potentially even worse if the Eurozone can't sort itself out. And I'm writing this in a London coffee bar with hoards of police outside in anticipation of a planned march and the biggest strike action for years.

Yet despite there being plenty of reasons to be depressed there was a moment that tickled me during the Chancellor's statement in the House yesterday when the Speaker stopped him mid-stream and said: "The House needs to calm down; one Honourable Member has probably already shouted enough for one day"! The antics of our politicians never cease to amaze me with behaviour that you'd see nowhere else, except perhaps a playground!

So what can we do about it and is bemoaning our lot going to improve things? I think not. I was struck by a tweet by Richard Tyler, Enterprise Editor at the Telegraph. Richard and I don't always agree but I couldn't argue with the sentiment he expressed when he suggested - in response to the expected grim statements in the House and the OECD saying Britain may have another recession - that we should all decide 'not to say it and it won't become true'.

We're surrounded by economists forecasting gloom; most of our businesses are probably struggling, and yet if we keep reminding ourselves how bad things are, we're in danger of talking ourselves into a depressing vortex.

As credit professionals we make a valuable contribution to our businesses in maximising cash-flow and mitigating risk. It's time for us to raise our professionalism further by actively looking for opportunities that the sales team can exploit, by finding ways of doing business that we might otherwise have to reject, and by being seen as the bright corner of the organisation where people can think - and act - in a more positive light.

Weekly Blog by Philip King, CEO of the ICM - 'Late Payment thinking that is back to front'

I spoke at a conference organised by the AFDCC (the French equivalent of the ICM) last Friday in Paris. It was a good event held in a very impressive venue and about 150 delegates assembled to hear about and debate, amongst other things, the new EU Directive on Late Payment. One of the keynote speakers was Barbara Weiler MEP, an architect and key driver of the new Directive. Her passion for the benefits on business of improving payment terms is not in doubt and her energy has clearly been instrumental in getting the Directive adopted.

The recent survey of ICM members conducted by Equifax showed that 65% of respondents believe the Government should do more to protect small businesses from the negative impact of late payments, and there can be no argument that the existing legislation has not worked in the way intended. Businesses, and particularly small ones, are either ignorant of the law, don't know how to use it, or are afraid to do so for fear of losing a customer. There are exceptions of course; I know credit professionals who use it very successfully and mitigate the cost of financing extended credit by so doing, and I know others who generate a late payment 'charges and interest' invoice to accompany the first collection letter very effectively.

Primarily, the real financial benefit comes when legal action is taken and the late payment charges and interest are added to the principal debt and can significantly increase the amount recovered. But that was never the point of legislation - it wasn't intended to make for better recovery at the end of the food chain; the idea was to improve payment behaviour from the start!

Unfortunately, politicians often seem to miss the point of what happens in the real business world and this is no exception. The Directive states that, if payment terms are not agreed in the contract, then the assumed terms shall be 30 days and - if payment terms are set out in the contract - they cannot be 'grossly unfair'. The definition of 'grossly unfair' is unclear but, in any event, how many small companies would be willing or able to take legal action to argue the case and get remedy? The inclusion of a clause allowing a supplier to recover reasonable actual debt recovery costs (in addition to interest) rather than just the current standard late payment charge is positive but is again a back-end benefit, not a front-end incentive to change payment behaviour.

For me, the most encouraging thing in the whole conference was Barbara Weiler saying that the Directive is as much about changing the culture of payment through soft issues as it is about introducing hard legislative measures. The UK has been lauded for its Prompt Payment Code (administered for BIS by the ICM of course) and educational activity like our Managing Cashflow Guides are also recognised as leading the field. As credit professionals we have more opportunity than most - and should use it - to influence that change of culture by adopting credit management best practice. We can and should be more powerful and effective than a Directive and if the Directive gets more attention and visibility for the importance of cash-flow management and the value we add to businesses, then - for that reason alone - I welcome it.

The Prompt Payment Code

Institute of Credit Management Press Releases

Weekly Blog by Philip King, CEO of the ICM - 'A positive route to growth'

So the latest Project Merlin figures have been released and they show that, in the third quarter, new lending to business was £57.4bn, of which £18.8bn was to SME's. Let's remember that the full-year targets are £190bn and £76bn respectively with £157.7bn and £56.1bn being achieved so far. Simple arithmetic tells me, assuming nothing much changes, that the total lending target will be achieved and the SME target will probably fall a trifle short. Not surprisingly, the data has generated the usual and expected clamour for banks to be forced to lend more to small businesses.

Regular readers will not want me to reiterate my view with regards the fallacy of 'forcing' banks to lend, and they will have seen my blog last week talking about some basic errors made by start-up businesses. I believe my observations then support my contention that lending decisions should be based on rational - rather than political or emotional - criteria.

I was privileged to be a contributor to the BIS/UKTI-organised UK Growth and Finance Fitness event in London last Thursday, and the subject of SME growth and finance was a recurring theme in Lord Green and David Cameron's opening speeches. Vince Cable also took up the theme in his address, as did Doug Richard, and early Dragons Den guru and an angel investor, who expressed his views clearly and articulately.

The reality of course is that not all SMEs want or need to borrow; indeed a recent SME Finance Monitor report showed that 47 percent never use external funding ('never' defined as neither now nor in the past five years). What we need, therefore, is an environment in which SMEs want - and feel confident - to grow, and one way to achieve that would be through a growth in exporting.

Two statistics in David Cameron's speech struck me in particular: firstly, only one in five SMEs export but if that figure was increased to one in four, Britain's trade deficit would be wiped out; secondly, Britain exports more to Ireland than to Brazil, Russia, India and China combined; the BRIC countries therefore represent a huge potential market.

So why don't more SMEs export, and, perhaps connected, why don't more SMEs want to obtain external funding? I've said in a number of forums with government and others that the key to SME growth is less about obtaining funding, and more about building confidence. Increased confidence would deliver more willingness to introduce new products and services, more willingness to enter new markets either at home or overseas, and more willingness to take on additional staff.

I've also expressed my view that many SMEs don't consider exporting because they see it as a 'dark art' and are afraid of the unknown. I'm delighted ECGD announced at the event that it is changing its name from 'Export Credits Guarantee Department' to 'UK Export Finance' and is going to work much more closely with UKTI. I believe that even such a cosmetic change will make SME's less apprehensive or uncertain as regards what the former ECGD does - and the help it can provide.

A recurring theme also came from the panel of small businesses who are successfully exporting. They started exporting because they were in a desperate situation and it was their last hope of keeping the business alive...and it worked. What we need is more businesses embracing exporting as a positive route to growth rather than a last resort and act of desperation.

Weekly Blog by Philip King, CEO of the ICM - 'Wake up and smell the coffee'

When I stay in London, I often use a hotel near Swiss Cottage. It's on the Finchley Road, located in a typical suburb of the capital, its street lined with shops. Over the last few years, I've noticed something that was brought home to me on Monday.

Within about half a mile, there are a number of fast food establishments, some long established cafes and restaurants and a couple of Costa Coffee shops. There are also a couple of independent coffee shops with the usual comforts. One of these closed down a few months ago and was emptied; it has now been replaced by another one that - if you hadn't seen the empty shop in the interim - you could mistake for what was there before.

Further down towards Swiss Cottage Station, it happened again - a new shop replacing one that has closed down. Then more recently, I noticed that that too has now closed down, having been open for no more than a handful of weeks.

Now I know nothing about these businesses or their owners but, from using them, I get the impression there is an individual who has fulfilled a dream by opening the premises and is clearly intent on giving customers a good experience. They work hard and want their enterprise to succeed. But, in all but one case so far, they've failed.

The obvious question that occurs to me is why - when a coffee shop has failed on a particular site - you would think it a good idea to open another? It's not just about location, but also about the clientele, the volume of turnover that can be generated, and the business model of competing operations. And this is obviously not a problem unique to Finchley Road; how often do we see businesses opening where the owners clearly haven't given enough thought to whether they've chosen the right place for them?

I said at an event hosted by Vince Cable, Mark Prisk, and Francis Maude over a year ago that one of the issues arising from the rationalisation of the Civil Service (and, indeed the private sector) would be people receiving a large redundancy payment and using it to fulfil their lifetime dream of starting a business, only to see that dream turn into a nightmare. This is one of the reasons why I believe we have still to see the peak of insolvencies and why business education is so vital. Scenarios like this can be heart-wrenchingly sad and avoiding them would be good for all of us and for the economy.

We are pleased, therefore, to be actively engaged in the BIS Finance Fitness Event and Campaign being launched in London today with the aim of making new businesses and existing ones better equipped and able to survive. We will be continuing to provide advice through our Credit Management Helpline and Managing Cashflow Guides (www.creditmanagement.org.uk) and we're also launching an SME Collections Toolkit as part of ICM Online Services that will provide very practical advice and tools with templates, video role-plays and more.

Those of us supplying and talking to small and start-up businesses could do worse than point people to advice like this; after all, if they get paid, we're more likely to get paid too!

Weekly Blog by Philip King, CEO of the ICM - 'Men behaving badly'

The ITV 'Exposure' programme aired on Monday night used covert recording of a bailiff behaving very badly indeed. Shocking revelations that - in many respects - beggared belief. What was even more surprising was the assertion that no complaints had been received by his employers during the three years he had worked for them. Was this because the people he called upon didn't know their rights or what standards of behaviour they could expect? Or was it because they felt that any complaints they did raise would simply fall on deaf ears?

If the Tribunal, Courts and Enforcement 2007 had been fully implemented, the bailiff concerned would have been subject to an enhanced certification process that would have included aspects such as diversity awareness and conflict management; both would clearly have been useful, and complaints would have been dealt with by the Courts. As events have unfolded, the Act was only partially implemented and a parallel consultation proposing regulation instead by an independent body was never taken forward either, even though the enforcement industry would have welcomed such an additional regulation (my thanks to Chris Bell of Shergroup for his validation of the facts here).

I've been involved in meetings with various bodies and the Government for several years discussing the proposals and alternatives interminably but - as has frequently been highlighted in the credit press - no progress has been made and the issues remain. I don't believe the problems are endemic, but it only takes one bad apple to spoil the whole barrel and damage the reputation of the entire industry. The reality is that bailiffs are only acting to recover money that is the subject of a warrant issued by the court and is rightfully due, yet that fact gets lost in the noise of behaviour and attitudes that can't be condoned. They also get confused with the world of 'Lock, Stock and Two Smoking Barrel's' that is as far away from professional enforcement as it is possible to be, but make for a good photo-caption!

Self-regulation is not a viable option unless and until it is carried out in a much more rigorous way. I've been encouraged by recent initiatives like the 'video recording badges' being piloted by some Marston High Court Enforcement Officers. I don't know how feasible such measures would be on a widespread scale but technology like this would allow for closer monitoring of activity and would help rebuild confidence. The last thing we need is a belief that enforcement of warrants is unfair.

Weekly Blog by Philip King, CEO of the ICM - 'The changing 'Face' of Debt Guidance'

Since mentioning the publication of the new OFT Debt Collection Guidance in my blog last week, I've now had chance to look through it in detail. No great surprises; it's very similar to the draft on which we were consulted some time ago and says what I guess we'd all largely expect it to say. It is, after all, only an update of the version of the document issued in June 2003.

The aspect that seems to have caused the greatest debate on the ICM Credit Community LinkedIn group, and elsewhere, is the OFT warning to debt collectors not to use social networking sites such as Twitter and Facebook to pursue people who owe them money. I don't want to be pedantic here but I'm not sure that's exactly what it says. Actually what it says is that unfair or improper practice would include 'acting in a way likely to be publicly embarrassing to the debtor...' which includes, as one of the examples quoted 'posting messages on social networking sites in a way that might potentially reveal that an identifiable person is being pursued for the repayment of a debt'. That's a long way from banning the use of Facebook!

I might be showing my age here but I remember lecturing ICM evening classes at Watford College in the 1980's and recall teaching about s40 of the Administration of Justice Act 1970 which addressed the unlawful harassment of debtors and included the works: 'A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract, he harasses the other with demands for payment which, in respect of their frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation'.

So nothing has changed really; in those days, the example of harassment was parking a van outside someone's house with the words 'debt collector' written on the side. Surely all we're talking about here is the 2011 equivalent? There's nothing wrong with using social networking tools to find people or to learn more about them but harassing people by any means is - and must be - unacceptable. Those who have seen me present using a baseball bat as a visual aid will know that such a bat is an equally unacceptable collection tool!

I am intrigued by the following words in the Foreword: 'This guidance document is not intended to provide a basis for debtors to avoid the repayment of debts duly owed. We consider that debtors should take responsibility for engaging appropriately in the debt recovery process...'. On the one hand, I am encouraged by its inclusion; on the other, the fact that they have to write these words at all makes me think that the document is weighted heavily in favour of debtors. We shouldn't lose sight of the fact that taking on debt carries with it an obligation to repay it, and that should always be the starting point.

The Guidance carries considerable detail and Consumer Credit licence holders would do well to read it and ensure they, and any third party organisations working for them, are complying with it.

Weekly Blog by Philip King, CEO of the ICM - 'Finding common cause...'

I said in my blog last week that I would be meeting a couple of MPs to discuss late payment. Since then, I've met with Debbie Abrahams, Labour MP for Oldham East and Saddleworth and Anne Marie Morris, Conservative MP for Newton Abbot. In addition, I attended the BIS Small Business Economic Forum chaired by Mark Prisk and have been talking to the BIS team about some future activity around late payment. I have also been starting to prepare for a presentation I'm giving to the AFDCC (the French equivalent of the ICM) in Paris next month about the new EU Late Payment Directive. It's fair to say that late payment has certainly been at the forefront of my mind in recent weeks!

Debbie Abrahams and Anne Marie Morris are both articulate and passionate about supporting small businesses and helping to protect them from the impact of late payment. Coming from different sides of the chamber, it is no surprise that their views on what can and should be done differ slightly but they certainly have common objectives. I was encouraged by the fact that both recognised the need for a change of culture across the whole business community, acknowledged that payment terms are part of the wider contractual and commercial negotiations between businesses, agreed that more emphasis should be placed on the positive aspects of prompt payment (see www.promptpaymentcode.org.uk), and endorsed the need for businesses to be educated in the basics of credit management that can help them to assist themselves.

There is work to be done and I will continue our dialogue, exploring various ideas and initiatives. This, together with the imminent BIS activity and the continuing demand for the ICM/BIS Managing Cashflow Guides (of which there have now been over a quarter of a million downloads), gives me grounds for optimism.

I'll return to the EU late payment directive on another occasion but, before then, I suspect I'll be addressing the new - and just published - OFT Debt Collection Guidance which I'll be reading in detail over the next day or three.

Weekly Blog by Philip King, CEO of the ICM - 'Merlin loses its sparkle'

Vince Cable has apparently, and allegedly, admitted that Project Merlin has failed. The Merlin agreement with the major banks guaranteed that lending to small businesses would increase to £76bn in 2011 but his acknowledgement that 'new mechanisms' would have to be considered is a tacit recognition that Merlin hasn't worked. The Chancellor's announcement last week of his 'credit easing' plan of a new credit line for business is further evidence.

As I said at the time, the idea that commercial banks could be 'forced' (as some commentators described it) to lend seemed farfetched at best. Commercial banks have a responsibility to ensure that their lending risks are justified and their lending policies are sound. We've all seen spectator examples in the press of where they may have got it wrong but receiving much less publicity are the numerous cases where they've declined to lend and have been right to do so.

I won't pretend to fully understand the concept of 'credit easing', the detail of which has yet to be made clear, but Phil Orford, the Chief executive of the Forum of Private Business asked three very sensible questions in a recent blog about a scheme which it would appear would require Treasury officials, or officials of an agency specifically appointed for the task, to have a start making judgments on lending taxpayers' money to private sector firms:

• How will they decide which companies deserve a loan from the taxpayer?


• How will the money be channeled to the businesses that need it?


• If these businesses are safe bets, why aren't private lenders already lending to them?

All will become clear in due course and I'll be fascinated to see exactly how it will work.

The other issue that needs to be addressed is how to encourage those business with outstanding debtors to use best practice in credit management to release that money and therefore reduce their external cash requirements. It might even save them having to look for working capital funding at all, but more of that next week by which time I'll have met with two MPs - one Conservative and one Labour - and discussed such matters.

Weekly Blog by Philip King, CEO of the ICM - 'Being proud to be a professional'

I was at the fifth CCRi Conference this week and what an excellent event it was. With more than 400 credit professionals gathered at the Guoman Tower Hotel in London, it proved a great opportunity to network with colleagues, and provided plenty of learning to take away. I shared a quote I'd seen the night before in my brief comments at the beginning of the day that 'Leadership and learning are indispensable to each other'. How true those words are. Standing still is not an option because, if we don't grow and develop, the world moves on and leaves us behind!

Trevor Williams, Chief Economist at Lloyds Bank ended his keynote speech by observing that the future is impossible to predict because there are 'so many imponderables'. If that's true, and I believe it is, then all the more reason why credit professionals must build their skills and knowledge so they can continue to add value to their businesses and help them survive and prosper. What might have worked well a year or two ago won't necessarily work now and, if we assume it will, we could get seriously caught out. The new ICM CPD scheme currently being piloted, ahead of its formal launch for 2012, is well timed, and so is the continuing progress of our learning and development programme. We're demonstrating our commitment to providing the tools to equip people and make them truly effective, and feedback from our members and potential members attending CCRi on Tuesday was universally positive.

Credit management is a profession in just the same way as accounting or law are professions, and those of us working in it must not be afraid to make that point to our colleagues, peers and bosses. Credit management sits at the centre of the business and touches every aspect of the organisation; now is the time for us to stand up, be counted and show pride in our professionalism.

Weekly Blog by Philip King, CEO of the ICM -'Kill or cure the zombies'

On Monday the Financial Times ran a story with the headline "Institutions urged to kill or cure the zombies" which talked about "zombie" businesses, to describe those that can pay interest on their debts but has no viable means of repaying the principal over the long term. The article highlights the fact that many businesses are passed the point of no return but are staying afloat because of low interest rates, HMRC's discretionary Time to Pay arrangements, and/or banks keeping businesses in "intensive care" rather than allowing them to fail. It is little comfort to see a respected newspaper making the very same arguments that I have been saying for at least the last two years in my public assertions that there is a spike of corporate insolvencies waiting just round the corner. I recognise that it has taken longer to reach the corner than I anticipated but I continue to maintain that we are going to see a substantial increase at some point. Too many businesses are in a state of denial and it is only going to take a change in one factor to push them over the edge, be that the rent quarter day this week, a negative response to a request for an extension to the HMRC Time to Pay arrangement, an increase in interest rates, or another factor such as a large customer failing or failing to pay sufficiently promptly.

If you watched Dragons Den this week you might have seen the director of a twenty year old business seeking £100,000 investment to help his business grow. Upon questioning, it became apparent that the business had been loosing money in three of the last four years, had a very low balance sheet net worth and, if current forecasts were met, would be technically insolvent at the end of the current financial period. The argument that sales next year would be much better and would see a return to profit seemed to have little substance and, not surprisingly, there were no takers among the dragons. It's obviously difficult to see the whole picture from a few edited minutes on TV but the scenario of a business thinking tomorrow will be better without realising the reality of its financial situation today is not uncommon.

In the FT article, Christine Elliott, Chief Executive of the Institute of Turnaround said "she would like to see institutions that have potentially viable businesses under their care change their mindset. They should either recognise non-viable businesses and deal with them through insolvency or put in place a transformation plan to achieve their potential". We credit professionals have a very similar task: to recognise viable businesses and help create profitable sales for our own organisations, and to recognise non-viable businesses and ensure exposure is minimised. Sometimes we to have to decide whether to kill or cure the zombies.

Weekly Blog by Philip King, CEO of the ICM - 'The two 'faces' of Twitter and social media'

During the summer riots, there was much talk of the influence of Facebook, Twitter and other social media sites and their role in helping to organise and promote illegal activity. Last week I was reminded at a much more mundane and practical level of the power of Twitter in my working life.

I woke up last Wednesday morning to see a tweet from Chuka Umunna, the Shadow Business Minister, saying he was going to be speaking at a private members debate on late payment. He included a link to the parliment website and, as I was in the office on Wednesday, I was able to watch much of the debate live. I must confess that I had not realised that such debates took place in Westminster, other than in the main debating chamber itself. This one on late payment had been called by Debbie Abrahams, the Labour MP for Oldham East and Saddleworth, who was clearly passionate - and knowledgeable - about the subject.

The contributions from several MP's we know including Lorely Burt, and others we didn't previously, presented some strong arguments supported by background knowledge that was - in many cases - impressive. What was particularly encouraging was their knowledge of the work being undertaken by the ICM and it was gratifying to receive many mentions.*

Afterwards, I exchanged tweets with Debbie and we are planning to meet to discuss how she and her parlimentary colleagues, along with the ICM, can drive more engagement with the Prompt Payment Code and point SMEs towards the practical advice we can offer through, for example, the Managing Cashflow Guides.

I've also recently had some interesting conversations via twitter with Richard Tyler, Enterprise Editor at the Daily Telegraph, and I'm conscious that - without it - I would have been blissfully unaware of last week's debate and missed a real opportunity to engage with people who can be influential. I know there are downsides to social networking but, for me, the upsides can be pretty impressive too.

*For those interested, our press release following the debate can be found here, the transcript here, and the video recording here.

To follow me and the Institute of Credit Management on Twitter go to http://twitter.com/philipkingicm and http://twitter.com/ICMorg

The Prompt Payment Code

Managing Cashflow Guides

Weekly Blog by Philip King, CEO of the ICM - 'Tug of war with no winner'

There has been some interesting press comment recently about the tug of war between retailers and consumers. One article talked about supermarket promotions that 'rip chunks out of the manufacturers' profit margins' and are unsustainable. It talked about the impact of declining consumer confidence and the impact of consumers feeling poorer. Although we all like a bargain, the vicious cycle of more promotions and price-cutting chasing more difficult-to-achieve sales is not good news. And there's worse!

We've seen in the last week reports of double digit falls in year-on-year quarterly sales from the major electrical and homeware retailers and analysts saying the outlook is bleak as people grow more nervous about their financial security and put off purchasing decisions. Add this to the recent spate of insolvencies and it's clear that the retail sector is under huge pressure.

But it's not just retail; industrial output is suffering too, and there is an interesting contrast between the UK and Germany. The Office for National Statistics reported a drop of 0.2% in industrial output in July; in contrast, industrial production in Germany jumped by 4% that was, apparently, way above expectations. It seems that foreign demand is weak and, coupled with a drop in confidence in the business market, things are not looking good.

Matthew Rock, editor of realbusiness, tweeted recently about a meeting with a board director of major energy business and noted a big change in mood over just six months - "they've moved from talking of growth to 'cost review'," he says.

All this bad news made me think about how credit professionals can add value to their businesses when their skills are exploited. Good credit management is about finding ways to do business that otherwise might not be acceptable. In my career, I have often worked with sales teams and others to engineer ways of taking business that we might otherwise have declined.

Now is the time for credit professionals to step up to the plate and help their businesses through what are, without doubt, difficult and challenging times. If you've ever been called the 'Sales Prevention Officer', you can dispel that myth by working closely and creatively with the rest of the business and demonstrating real professionalism.

Weekly Blog by Philip King, CEO of the ICM - 'feeding the sausage machine'

Rachel Bridge, the Enterprise Editor of The Sunday Times, wrote a really interesting article at the weekend about credit insurance. It talked about a sausage maker in Devon which took out credit insurance a few years ago after suffering a bad debt of £22,000. The finance director was quoted as saying that "if our credit insurer will provide cover up to a certain limit, then we will trade. If not, we will think again. We either do not do business with that customer, or we trade on different terms, perhaps asking for money upfront".

The article went on to outline how the amount of cover provided by the big three insurers has increased over the past year, and how some have introduced new measures and more user-friendly policies. Fabrice Desnos, Xavier Denecker, and Marc Jones from Euler Hermes, Coface, and Atradius respectively were all quoted and - since all three are good friends of the ICM - it made me read the article more carefully.

It was a useful and practical guide to what is a difficult product for many SMEs to understand and, indeed, for government ministers to get their heads around. I remember many conversations a couple of years ago trying to explain how credit insurance works without ever feeling I was making much progress. Credit insurers were coming in for some pretty bad press at that time, some of it deserved, but the sector has moved on, and so too its products. Credit insurance in the right circumstances can be a really useful tool for business, including small ones, and I'm pleased to see it being explained by a respected journalist to whom SMEs will listen.

There's been a recent interesting debate on the ICM Credit Community LinkedIn group about whether credit managers who have no bad debt are the good ones. My view is that good credit professionals understand the balance of risk and reward and accept bad debts as a price of profitable sales activity, but that doesn't alter the fact that the impact of a bad debt - particularly to small businesses and especially if it is relatively disproportionate - can be devastating. Anything that helps SMEs to understand better how to manage credit and risk is to be welcomed.

LinkedIn ICM Credit Community

Weekly Blog by Philip King, CEO of the ICM - 'The majority are micro'

Ed Davey issued a discussion paper last week - "simpler reporting for the smallest businesses" and I make no apology for using my blog this week to readdress some of the issues raised in the press release we issued immediately after the discussion paper was received.

The paper considers whether micro businesses should be allowed to file a simplified trading statement, statement of position, and annual return in place of the current profit and loss account, balance sheet, and annual return. So far so good; making reporting easier will surely reduce the burden on smaller businesses.

But wait. What has the EU defined as a micro business? Micro businesses are those who do not exceed two of the following criteria; a net turnover of Euro 500,000 (£440,000) a balance sheet of Euro 250,000 (£220,000), and an average of ten employees during the financial year. 60% of companies registered at Companies House meet these criteria so it isn't a 'small minority' by any measure.

The paper raises a number of interesting questions and I am looking forward to receiving feedback from ICM members when we launch a survey seeking their views. The move to a trading statement prepared on a cash accounting basis which would remove the need to account for, among other things, stock, changes in working capital, and changes in the value of fixed assets raises a number of questions in my mind (although I'm always prepared to admit that I might be out of date).

My biggest gripe, however, is with the definition of users of accounts which, among the six categories, doesn't even mention creditors except under the quaint term of "other trading counter parties". It is this that suggests to me a complete lack of understanding of the role of credit. A business turning over £440,000 is typically going to make sizeable purchases and, for the majority, these will be on credit terms. Credit professionals provide by far the biggest proportion of cash flow funding to business and, to make good decisions, they need good information.

The discussion paper and survey will be with you shortly; please look out for it and give us your feedback. We need to make sure our ability to support economic recovery is not undermined.

Weekly Blog by Philip King, CEO of the ICM - 'Joined up thinking benefits customer'

I recently experienced, at close hand, the efforts of the police, local authorities, and other agencies attempting to work together to protect a vulnerable child. What it demonstrated to me is that acting independently creates frustration for all those involved or affected, prevents the best outcome being achieved and, indeed, stands in the way of getting the required result.

The same could be said of business. In far too many businesses we hear about the 'them and us' attitude that exists between sales and credit departments and how neither party is at fault when something goes wrong.

Take for example my own experience last week when I checked into a hotel ahead of the ICM Regional Roadshow in Sheffield. It was late and I was tired. I took the lift to the fourth floor only to find that the key card wouldn't open the door to room 411 (a not unusual occurrence in my experience) so I returned to reception and had the key card re-coded. The new key worked perfectly but as I stepped into 'my' room I realised from the bags on the bed and the clothes on the floor that somebody had got there first.

I returned to reception and was moved to a new room that was mercifully vacant. On my third visit to the Reception desk, I asked the very pleasant young lady why she didn't feel the need to apologise for the inconvenience I had been caused. Since the card coding machine malfunction wasn't her fault, and someone else had made the error that resulted in me being booked into an already occupied room, it was clear - in her mind at least - that there was nothing for her to apologise for!

Wherever we sit in an organisation, but especially as credit professionals, when we communicate with customers, suppliers or any other stakeholder, how we respond reflects on our business and how it is viewed. As Glen Bullivant reminded us at the Sheffield Roadshow last week, credit management - whether we like it or not - is customer service because we face the customer, we talk to the customer, and we manage the customer. Doing it well, and working effectively with all other parts of the business, is just one way in which we add real value. I'm reminded that someone once said: 'There's no pleasure in knowing the hole is in the other end of the boat'.

Oh, and if you were in room 411 at the Park Inn, Sheffield last Wednesday, you had a very lucky escape!

Weekly Blog by Philip King, CEO of the ICM - 'Pride in Professionalism!'

A couple of weeks out of the office and I'm back raring to go. I looked at only a few emails, turned off Twitter and was generally very well behaved - I think even Mrs K was surprised! While I was absent, I gave away my daughter on her wedding day which was as perfect as we could have hoped for, spent a few days in the North West of England, and watched the world going mad. Riots in London and elsewhere, the US economy being downgraded, and a possible European financial meltdown as just a few examples. So back to reality and I've decided not to join in the bigger debates that have been going on while I've been away since all the arguments have already been expressed and in better words than I can use.

I do want to share some thoughts on professionalism though. The Institute of Credit Management (ICM) delivers cash for business by empowering credit professionals working in those businesses to be more effective, and a couple of emails received from ICM members during my holiday reminded me of just how important the credit management role is. Members of the ICM are professionals working in the field of credit management who recognise the importance of what they do and are keen to develop their own knowledge and careers, whether that is through qualifications, training courses, keeping up-to-date through reading Credit Management magazine and ICM Briefings, attending regional networking events, participating in online forums, or engaging in other ways. In short, they are showing pride in being professional by belonging to an organisation that supports them, works for them, and encourages them.

And yet I meet many people working in credit management who, although they recognise the value they add, don't see it as a profession in its own right. Many of us would argue rightly that it is a challenging, rewarding and worthwhile profession, and needs to be seen as such. We have made significant strides in recent years in gaining recognition but we need to do more. The new Continuing Professional Development scheme the ICM is piloting is an example. More important though is getting those of us who do the job to make sure our peers and business colleagues (above and below) understand that we're working in a profession we're proud of and is vital to the sustaining and growth of business and the economy.

If you know someone who's working in credit management and hasn't yet got round to joining the ICM, give them a nudge or send me their details and I'll nudge them. The more members we have, the louder our voice will be and I'm on a mission to raise the volume - let's get all credit professionals to show Pride in Professionalism!

Guest Blog by Rob Beddington, Director of Commercial Relationships at the ICM - 'The Ratings Game'

In my (too many) years writing about the credit industry, the importance of accurate credit ratings or limits has always been a hot potato, whether a particular decision is made about a small start-up or a multinational going through a sticky patch. This situation could not be better illustrated than the one we are seeing in the fallout from the US debt crisis, where the last minute deal by Congress to increase its credit card bill has brought differing reactions from the three main ratings agencies. Although Moody's has given the lawmakers the benefit of the doubt, it has already assigned a negative outlook to the USA's long -standing AAA rating, which could lead to a downgrade in the medium term if the proposals go off track. Fitch is currently maintaining its AAA rating. That said, the agency is conducting a thorough review, with a further announcement due at the end of this month. A negative outlook may be applied when this review is concluded.

Which, at the time of writing this blog, leaves Standard & Poor's, who had already placed the US on negative watch last month. The proposals by Congress to impose budget savings of $2.1 trillion are about half the amount S&P were seeking if it were to support a continued AAA rating. With its rivals showing their hands early, and severe pressure to maintain the current rating, S&P's decision is eagerly awaited. A downgrade now would be surprising, but it is still possible.

Whatever S&P's decision, if we were to apply sound credit management practice to the situation, some sort of downgrade must surely be handed down, especially if the proposals are not seen through. The eleventh hour agreement may improve the USA's ability to pay its bills now, but commercial credit ratings are not based on that ability alone. Businesses with a sound credit policy extend credit based on full financials, they consider the management team, the marketplace and much more. In our day-to-day lives, any business operating well beyond its means, relying on increased borrowing to fund its operations and obligations and promising to cut expenditure in the future, does not warrant a top rating. In the case of the USA's rating, we must also add into the mix the continued political game-playing, not forgetting probably the biggest factor, the current poor performance of its economy, an upturn in which is crucial to the success of the new deal.

As for what a downgrade would mean to the USA, the rest of the world, and indeed the dollar as the world's reserve currency, this is the subject of much debate, but an accurate credit rating would certainly be a good start!

Closer to home, but staying with sound credit management practice, it is very encouraging to see the ICM's UK Credit Managers' Index (CMI) moving from strength to strength. Our latest quarterly survey sees almost three times the number of participants as the previous Index, thanks to the engagement of our members, members of the ICM Think Tank and their organisations. With this level of participation, the Index promises to offer an increasingly detailed insight into the thoughts, attitudes and levels of confidence of UK credit professionals. Full analysis will be published soon, and look out for the next ICM UK CMI in Q3.

Philip King returns on 18 August.

Weekly Blog by Philip King, CEO of the ICM - 'Recent days have held mixed emotions - first driven by our government and, secondly, by my family'

Francis Maude announced a few days ago that the Government would name and shame prime contractors who fail to pay suppliers within a 30-day limit. The Prompt Payment Code was established by BIS to encourage best payment practice and by definition expose those whose behaviours might be open to question, and here is a classic opportunity to promote its existence by insisting that suppliers sign up to it. It certainly needs more publicity and this would have built on the work we're doing with BIS; instead an initiative is launched that demonstrates a seemingly lamentable absence of joined-up thinking across government departments.

A day or two later, I attended a stakeholder meeting with the Insolvency Service looking at proposed changes to the rules surrounding pre-pack administrations. Having held a number of forums, the policy team had decided to meet with stakeholders again in smaller groups to inform a 'period of reflection' before deciding on the best way forward for the detailed implementation. I was greatly encouraged by what is a rational and sensible approach that will - I hope - lead to a better outcome than would have resulted from rushing ahead regardless.

On the personal front, I recently attended a family funeral that was both poignant and sad reminding me of the uncertainty of life and the future, and bringing things into perspective. On Saturday, my daughter is getting married and this will surely be a day of pride, happiness and, yes, some tears too I suspect!

After the weekend, I'm off for a few days post-wedding recovery in the North West so I've asked Rob Beddington, the ICM's Director of Commercial Relationships, to share some thoughts with you next week, and I'll be blogging again on 18 August which, coincidentally, is the day of the next ICM Regional Roadshow at Cutlers' Hall in Sheffield. If you're in the area, I hope I'll see you there.

www.icm.org.uk

Weekly Blog by Philip King, CEO of the ICM - 'You tell us'

The ICM UK Credit Managers' Index for the second quarter of 2011 is now well underway and responses are coming in. If you haven't responded yet, there is still time and you can do so at http://svy.mk/j6zyU6.

When we launched the Index last year, we wanted to create something that would provide regular insight into the thoughts, attitudes, and levels of confidence of UK credit professionals.

Nobody is closer to customers - their behaviours, their financial strength and their financial weakness - than a good credit professional. When we know our customers as we should, we are often able to see the signs of trouble looming well before our peers from other parts of the business. In the same way, we are aware of, and more sensitive to, changes in general activity and across the wider economy.

It is unusual for me to make much mention of the ICM in my weekly blog but our members are vital players in delivering value for their businesses. Their opinions are relevant and perceptive, and combining their insight into a serious Index provides a really good barometer of where the country's economy is heading.

The ICM is a community of credit professionals; we speak for that community and the importance and relevance of credit management is being recognised more and more by government, business organisations, and businesses themselves. The Index is an output from the credit community and, if you haven't already done so, please take 3 minutes to have your say now.

Weekly Blog by Philip King, CEO of the ICM - ' Smoke and mirrors'

The SME Finance Monitor has at last been published with the sub-title: 'To what extent do SMEs have issues accessing bank finance?'. This report, which will be undertaken quarterly, is said to be the largest and most detailed study of SME's views of bank finance ever undertaken in the UK. It stems from the Business Finance Taskforce, comprising the BBA, Barclays, HSBC, Lloyds, RBS and Santander. It is independent and the banks have no editorial control.

The report was on the agenda of the BIS Small Business Economic Forum that I attended on Monday, and which was chaired by Mark Prisk. Mike Young, the independent chair of the Survey Steering Group gave us a fascinating insight. What has been even more fascinating, however, is the variety of interpretations and responses since its publication.

The BBA said that: "most businesses are able to get the credit they need." The Labour party was quoted as saying that: "it showed that a significant minority of small businesses seeking loans are failing to get the credit they seek." Richard Tyler, from The Daily Telegraph, said: "that banks are much more selective about which firms they back and are unlikely to change their minds."

All of these are factual and - in a week when the integrity of newspapers is under scrutiny - I am not suggesting that there is anything misleading. However, few will read the full 126 page report (available here: http://www.bdrc.co.uk/business-issues/sme-finance-monitor/) so one's understanding of the report will be heavily influenced by the headlines they read.

The truth, of course, is that this is not a simple issue. Mike says in his introduction: "This report does not provide quick and easy answers to the claims and counter-claims swirling around in the debate about SMEs and banks. That is because it is an extremely complex issue, incaple of easy summary into 'guilty' or 'not guilty'. So, the report eschews glib answers and focuses on bringing out the evidence. It is for others to draw conclusions from it." The conclusions drawn by journalists and politicians will steer our thinking too, I suspect.

The one report I really liked though was in the Telegraphs piece on Tuesday quoting Manos Schizas, a senior policy advisor at the Association of Certified Accountants, who I know well and have worked with a number of times recently. It highlighted one key message of the report: "that it is vital for firms to produce accurate information." Businesses with a low external risk rating were far more likely to be offered an overdraft (93%) or loan (81%), than those with a worse than average risk rating where the 'offered what they wanted' category percentage was only 61% and 41% respectively. No surprise here and you will indulge me while I once again bang on about the 'information' debate.

In many cases, the categorisation as 'worse than average risk' will not be because the business's numbers are bad but because there aren't any numbers to go by at all!. Information facilitates the flow of credit and the current proposals to exempt micro businesses from filing accounts will simply make things worse, not better. Our petition on this subject is still open at http://bit.ly/mliWbY and I urge you to add your name to the growing list of signatories. This isn't just about credit professionals wanting more information available from Companies House or credit reference agencies so they can make better decisions more easily; it's also about helping the economy back on to its feet.



http://www.icm.org.uk/

Weekly Blog by Philip King, CEO of the ICM - 'Can we influence?'

Last week I mentioned the petition the ICM has launched urging the government to rethink its plans to exempt micro-businesses from filing accounts. Although broadly welcomed with the number of signatories growing by the day, there have been a few dissenting voices on our LinkedIn discussion group (http://linkd.in/ozIELu). One said that we have no chance of impacting the decision because it is an EU Directive; another that it should be a matter of choice for the micro-business determined by their appetite for credit. If they want credit, then they should file accounts and if they don't there is no need for them to do so.

On the first question, this is only a proposal at present and would require ratification before it could proceed and allow Member States to implement locally. More importantly, from what I hear, several countries are resisting it (notably France, Italy and Belgium) while Germany and the UK seem to be the main champions for change. Influencing the UK's stance is therefore a worthwhile exercise, hence the petition. I believe we can influence the thinking of politicians and therefore the progress of the proposal.

As regards the argument that micro-businesses have a choice, I concede there may be many small businesses that do not seek credit and may well never offer credit either; for them, this might save a bit of hassle. But they still need to produce accounts for tax purposes and if they ever want bank facilities, then accounts will be required. Similarly if they tender for a contract with a public sector body (or a large private sector organisation) financial information on the business will be sought, and they need to know how the business is doing and whether it is solvent and profitable. It is true that you can do all of this without filing accounts at Companies House but making financial information a matter of public record has always been the price of limited liability (limiting your personal liability to your £2 issued capital can be very attractive) and online filing means the filing process is getting easier and easier.

Perhaps just as importantly, the filing of accounts allows credit reference agencies to report on small limited companies and many checks are carried out on potential suppliers, customers, and partners that might lead to a lucrative business relationship of one form or another, sometimes without the subject company even knowing. Credit professionals have bemoaned the absence of information on sole traders and partnerships for all of my 33 years in the industry and we're in danger of putting micro-businesses into the same category. Is this proposal going to drive economic growth or stifle it? I know which camp I'm in and - if you agree - then I urge you to sign the petition here: http://t.co/WEZbqw6

Weekly Blog by Philip King, CEO of the ICM - 'A week of contrasts'

It's been a mixed week with some very contrasting news and eperiences.

Being invited to speak to a Policy Specialist at No 10 and walking through 'that' famous front door was exciting and, I believe, a real watershed moment for our Institute. I felt proud that we are recognised as true experts in our field whose voice and opinion is valued. The ways of government are never easy to understand but I'm hopeful that the discussions will lead to more engagement and real activity that will raise awareness of the impact on business of late payment, and raise the profile of credit management and the critical importance of cashflow. Time will tell but if future activity levels are determined by volume of emails exchanged since the meeting, then we can expect plenty to happen!

A few days earlier we'd received good coverage in the Financial Times (third Saturday in a row!) about the Prompt Payment Code (http://www.promptpaymentcode.org.uk/) that we host and administer for BIS. The debate had been started in the FT a couple of weeks earlier in a piece that extensively quoted Martin Williams from Graydon. I'm sure most reading this will have heard of the tragic and untimely death of Martin last week. He was one of the best known and most likeable people in the credit industry - a thoroughly good guy - and, since I came to my current role five years ago, has been one of my strongest supporters (though often with useful and constructive criticism attached), always a staunch supporter of the ICM and a real expert in anything and everything 'credit'.

I came out of Downing Street last Friday and reflected that, if it had happened a week earlier, I would have shared it with Martin and thanked him for his contribution to the debate that led to the meeting being set up. The petition we have just launched - urging government to rethink its plans to exempt micro-businesses from filing accounts - came about as a result of a conversation between Martin and I after the last ICM Think Tank meeting. He was passionate about credit and business and, when we created the Think Tank a couple of years ago, he was one of the first names on my invitee list.

RIP Martin Williams, we thank you for everything you've done for the credit industry and profession, and we commit to continuing the work to which you so effectively contributed. Please go to http://www.surveymonkey.com/s/8KGN5BH to sign the petition refereed to above.

Weekly Blog by Philip King, CEO of the ICM - 'To tweet or not to tweet'

Tweeting to Rachel Bridge of the Sunday Times, recently, made me realise just how far we have come in our social networking strategy.

We've now been actively tweeting for over a year (philipkingicm: 1,244 tweets; 389 followers / icmorg: 313 tweets; 145 followers), I've been writing this weekly blog for almost ten months (this is my 41st), and our LinkedIn group (ICM Credit Community) has amassed 1,745 members. These numbers both impress me by how quickly they've grown, and disappoint me in that so many people aren't engaging.

The reality of course is that we are all different; we all want to consume news and communicate in different ways. For some, our magazine Credit Management is the only communication they want to receive; others want email contact; and others want a mix.

And this of course isn't limited to contact from organisations like the ICM; it flows through all aspects of life. I can't remember the last time I watched the TV news yet I'm an avid listener to news on the radio; I've recently become a Kindle convert yet I always insisted I never would because I love books so much.

So what's my point? I've recently seen examples of just how powerful Twitter and LinkedIn can be in generating contact and communication (particularly with the press) that otherwise wouldn't happen. The Sunday Times coverage for the ICM ten days ago came as a direct consequence of a Twitter conversation between me and the Enterprise Editor. I'm making contact with some of our Members in an informal way that would not take place by phone or email, simply because Twitter and LinkedIn provide the opportunity to do so, and those conversations sometimes lead to deeper, 'real' conversations as a consequence.

We shouldn't be afraid to embrace new technology and ideas. Some will fail early, some will last a while then diminish (Friends Reunited is a good example), and others will get stronger - although there's already talk that Facebook's popularity is starting to decline precisely at the point when some of us are just beginning to understand its value. Twitter, too, will no doubt one day reach saturation point and outgrow itself. For now though, by being selective about who I follow, Twitter provides me with access to news, views, information, and contact that I might otherwise miss or at least not see so quickly. It is therefore useful. And I've talked to credit professionals who use these media as a way of knowing their customers better and that can pay real dividends!

http://twitter.com/philipkingicm
http://twitter.com/#!/icmorg
http://www.linkedin.com/groups?home=&gid=94851

Weekly Blog by Philip King, CEO of the ICM - 'Do skills make a difference?'

I shared an interesting discussion with several business organisations and accountancy bodies at BIS this week, focused on the 'skills agenda' for SMEs. Of course it set me thinking: How does a small business identify what skills it needs to help it get established and grow? How does it know which are essential as opposed to merely 'nice to have' and which will make a real tangible difference? When issues are identified, how does it differentiate between those that are caused by a skills gap and those caused by external factors over which it has no control?

And it made me think of other questions: How does it deliver the necessary skills it identifies to the owners and/or staff? Can the skills be taught or would they be better learned on the job through a hands-on approach? How can it ensure the skills learned feed through to the benefit of the business? And how does it calculate payback, establish whether the investment was worthwhile, and validate that it's really making a difference?

Small businesses don't have Training or HR departments, they certainly don't have big training budgets, and often won't have a mechanism to encourage staff development. The consequence may be that the employees fail to grow and the business misses the benefits that would result from the investment. I've started a related discussion on the ICM Credit Community LinkedIn Group http://linkd.in/jCFJGi and would be interested in views from credit professionals.

I'm writing these words in the grounds of Leeds Castle after another successful ICM Regional Breakfast Roadshow - there were over 500 years of credit management experience in the room and that's where the real value of the ICM credit community shows its worth.

Weekly Blog by Philip King, CEO of the ICM - 'Missing the point'

So the Prompt Payment Code received some negative press at the weekend - described as 'nothing more than window dressing' and 'complete nonsense'. The ICM administers the Code on behalf of BIS and so you'd expect me to react to such comments.

Firstly, I wish the FT had asked the ICM for a view. Since we administer it, we are better placed to comment than people who have never even heard of it.

Secondly, I find it frustrating when the point is so obviously missed. The Code aims to ensure that the terms and conditions agreed between two parties are adhered to. It is NOT about whether the agreed payment terms are 30, 60 or 90 days; that is a complete red herring. What is critical to small businesses, and indeed any business, is the certainty of payment. It is this certainty that allows businesses to manage their cashflow accordingly.

I agree that the Code needs to be better promoted, and lack of compulsion is a real issue, but it should be remembered that the PPC was one of a range of initiatives launched by BERR (now BIS) in partnership with the ICM including a series of Managing Cashflow Guides of which there have now been more than 225,000 downloads.

What's equally frustrating is the lack of recognition that the real requirement is for good credit management across the whole sales life cycle from beginning to end. The challenges we have received about Code signatories almost without exception display an element of basic credit management practice being missed - order number not being quoted or terms not being agreed in advance for example. Large businesses exploiting smaller suppliers is abhorrent but those smaller businesses need to recognise their own complicity in creating the very circumstances about which they complain.

Managing Cashflow Guides