Weekly Blog by Philip King, CEO of the ICM - 'Always read the label'

So David Cameron met with some of the country's largest companies this week and urged them to support their smaller company suppliers by engaging in Supply Chain Finance.  The scheme uses the creditworthiness of the big company customer to allow the smaller supplier to obtain funding at lower cost secured against invoices that have been approved for payment.  It's often called reverse factoring, and one of the biggest advantages is that - since the buyer has confirmed approval of the invoice - there is no recourse.

 

The downside is that there are significant IT and administrative costs and it will only work in circumstances where the customer/supplier relationship is ongoing with regular transactions.  Perhaps the bigger risk is that large customers will be able to dictate longer payment terms justified on the basis that they have an arrangement whereby the SME can be paid faster.  But that, of course, will cost the SME interest which flies in the face of the culture we want to see, where payment terms are set fairly, and adhered to, in a climate where paying on time is the norm rather than the exception.

 

I'm not as scathing as some commentators about the scheme - there are circumstances where it is a great solution and can work really well – but it certainly isn't a panacea, and nor a one-size-fits-all solution.  I'd like to think that, while our Prime Minister had these business leaders in the room, he also asked those who hadn't signed up to the Prompt Payment Code why they hadn't done so.  In a week when Sainsbury's is being lambasted for extending payment terms for non-food suppliers to 75 days, we need to be encouraging good practice that enables SMEs to have certainty about payment expectations.  Supply Chain Finance has its place but there's no substitute for agreeing fair payment terms and sticking to them.  We need more businesses to lead by example, and we need our leaders to put pressure on them to do so.

Weekly Blog by Philip King, CEO of the ICM - 'Stand and be recognised'

I wrote last week about the importance of aspiration and referred particularly to the contribution of ICM members in helping to formulate our aspirations as an Institute. One of those aspirations is to achieve recognition of credit management as a profession in its own right. We want to be able to hold our heads up as equals alongside accountants, lawyers, architects and other professions. In some organisations we do but there is some way to go in others.

 

Two events this week have reminded me of this and of its importance. The ICM was strongly represented at a ‘Dods’ conference on Monday: Tackling Debt Owed to Government. We presented to two breakout sessions, had a stand in the exhibition area, and I was pleased to be able to present to an audience of over 200, mostly public sector employees and management, in the afternoon. My message was simple and clear: if Government wants debt to be taken seriously within the public sector and wants collection to be effective, then Debt Management must be seen as a profession and not simply 'doing a job in the Civil Service'. To achieve that culture shift, the value of the contribution of the role must be recognised, the impact of it being done well must be recognised, and professionalism in the Debt Management teams must be promoted and recognised.

 

Yesterday, I hosted an ICM Regional Roadshow in Exeter that was combined with a Quality in Credit Management Best Practice event. What did I see and hear about there? Professionalism in practice; examples of organisations that are best in breed and demonstrating the very professionalism I'd been talking about on Monday, and an audience of credit professionals who were eager to develop their knowledge and skills so that their contribution could increase and become even greater.

 

If you look up 'professionalism' in a thesaurus, you'll see words like competence, knowledge, and expertise but you don't need to find alternative words. Professionalism means exactly what it says and it's what we're all about.

Weekly Blog by Philip King, CEO of the ICM - 'Meeting the aspiration of members'

Having attended two of the main party conferences in the last few weeks, they all bring home the importance of grass roots support, and understanding your audience. Much of what I saw and heard resonated with our own position: the need to understand our membership, from those just starting out in a career in credit management, to those who might already be at the top of their profession.

 

As I write, I have just heard David Cameron talk about the need for us to become an ‘aspiration nation’, and yet I witness this aspiration every day in talking to our members. Our members aspire to great things, both personally and in their professional lives, and recognise the role that the ICM plays in helping them achieve their ambitions.

 

There is a clear recognition of the Institute of Credit Management as a serious and professional organisation befitting the role of a professional membership body, and this position has been helped significantly by our ongoing engagement with Government and other like-minded professional bodies, and through our consistent profile in the national press.

 

There is recognition too of the importance of our Qualifications, and having a clear career development pathway for credit professionals to support them throughout their years in practice.

 

We recently asked our members what we are doing well and what else we might be doing to even further enhance the value of membership. We listened, and we are acting but the process is constantly evolving. I would like to thank all of those hundreds of members who have taken part so far, and strongly urge those who are currently sitting by the sidelines and watching to take part in the discussion. There are many challenges ahead, but by facing those challenges together, we can be sure that our Institute – and our members – can equally attain the goals to which we all aspire.

Weekly Blog by Philip King, CEO of the ICM - 'Out on the fringe'

I've spent the last few days at the Labour Party Conference in Manchester and, next week, I'll be in Birmingham with the Conservatives. The conferences represent a great opportunity to meet and network with business and lobby organisations, MPs, and others but - to be truthful - I find them a bit depressing. Some of the fringe events are interesting, and I've heard some fascinating debates and arguments, but I'm far less impressed by the main conference sessions.

Now before I am accused of being partisan, I'm not suggesting any one party is better or worse than the other, and I understand that politicians are playing to an audience which is largely comprised of very passionate and committed party faithfuls who hang on their every word, but I honestly don't want to listen to a litany of all the things that the 'other parties' have done wrong, how misguided they are, and how they should be ashamed of themselves.

What I want to know from the party in opposition is what they would do to address the issues they see as being important, in specific and detailed terms, so that I can form an opinion as to how realistic their plans are, and how I believe they would perform if they were in power. What I want to hear from the governing party is how they're going to address things that aren't working quite as they'd wanted, how they're going to modify their plans to get things back on track, and where those plans will get us.

The optimist in me says that I'll be more impressed next week; the realist says I doubt it and my depression at British politics will deepen!