Weekly Blog by Philip King, CEO of the ICM - 'No man is an island'

I've just left a board meeting of the Start-Up Loans Company and never cease to be amazed at what can be achieved by a small group of people pulling in the same direction. Indeed, I may have quoted Winston Churchill words in a previous blog: "Never doubt that small groups of people can change the world. In fact it’s the only thing that ever has."

 

The first board meeting was only six months ago and, since then, an infrastructure has been pulled together, Delivery Partners have been appointed, a significant number of loans have been advanced, and some big challenges have been overcome. They've been overcome by a committed group of people pooling their talent and resources, and coming up with solutions, and it's fascinating to see what can come out of a two-hour meeting with real focus.

 

At ICM HQ, we're doing some work here to ensure our management team is as effective as it can be because we know that an effective team can make a real difference. One of my favourite quotations, and one I frequently repeat at HQ, is: "Creative thinking makes it possible; teamwork makes it happen.” Wherever you are, whether you are at work or at home, whether part of a large group or small, we all invariably work as a team. It is teams, more than individuals, which turn ideas into reality.

 

No man is an island after all!

Weekly Blog by Philip King, CEO of the ICM - 'Standing tall and proud'

When I said in my blog last week that it was time for credit professionals to stand up, to be noticed, and to be proud, I was talking about the value they contribute to their organisations and to the wider economy. I'm glad to say that I'm seeing a trend that exemplifies the pride I'm talking about.

I've noticed an increasing number of ICM members who include their designatory letters - AICM, MICM, MICM(Grad), or FICM - on their business cards, their email signatures, their LinkedIn profiles, and elsewhere. These letters are not just given away when someone becomes an ICM member; they have to be earned by gaining qualifications and/or having their practical experience verified, validated and reviewed.

Some might say the practice is archaic but I believe those who have earned them should be proud of their achievement and are right to use them in this way. If you don't tell people what you've achieved, who else will?

I've also seen a marked increase in the number of ICM members wearing the ICM badges we launched earlier this year. This, too, is a good way of promoting your professionalism and - if you don't have a badge - simply email icmmembership@icm.org.uk and we'll be delighted to send you one.

Don't be a shrinking violet!

Weekly Blog by Philip King, CEO of the ICM - 'Setting the agenda for credit management'

Last week we saw late payment and the Prompt Payment Code, hosted by the ICM for BIS, rise rapidly up the political agenda.  Business Minister Michael Fallon wrote to the Chief Executives of all FTSE100 and 250 companies that have not signed up to the Prompt Payment Code, urging them to do so and advising that he plans to publicly name those who don't.

 

Then, last Thursday, there was a debate in the House of Commons on 'Stimulating growth through better use of the Prompt Payment Code' where the impact of late payment was discussed in detail.  The ICM's press release following the debate can be found here.

 

This recent activity coupled with the implementation of the revised EU Late Payment Directive by March 2013 means that credit management, as one of the most effective ways to avoid and deal with late payment, is also firmly on the agenda.  Credit management is key to ensuring healthy cashflow and there have now been over 370,000 downloads of our Managing Cashflow Guides aimed at helping small businesses to get the basics right.

 

Let's make sure we make the most of this opportunity to demonstrate and promote the value that credit professionals bring to their businesses and ultimately to the economy as a whole.  Now is the time to stand up and be counted, be noticed, and be proud.

Weekly Blog by Philip King, CEO of the ICM - 'Doing the right thing'

I spent Monday afternoon as part of a panel of 'experts' on a Guardian Small Business Network online Q&A session addressing Effective Cashflow Management.

 

Much of the advice offered would have been no surprise to readers of this blog. Such basic tips as: know who your customer is; agree payment terms in advance and in writing; invoice promptly and accurately; and don't be afraid to ask for money that is owed to you and is rightfully yours. The usual reminders that cashflow is vital, and that payment terms should be discussed along with all elements of a deal and not as an afterthought, also prominently featured as good advice, as well as the reminder that credit should not be offered unless you are confident that the customer can repay the amount involved.

 

All of this leads me to Comet, where administrators were appointed after it became clear that the company couldn't pay for the stock it needed for Christmas after suppliers demanded payment in advance following the withdrawal of credit insurance cover. It's always disappointing when long-established high street names collapse, and the Comet situation is no exception, but I have to take issue with some of the media coverage over last weekend.

 

It incenses me when it's suggested that suppliers have caused the collapse of the business by unfairly refusing to supply goods on credit terms. Credit is not a right, it is a privilege and is one of the tools available to businesses in creating profitable sales through the provision of extended payment terms. As above, credit should only be granted when you're confident that the customer can repay the amount involved.

 

Several writers expressed concerns about Comet's survival when OpCapita bought the retailer in February. I'm not going to get into the debate about the financial engineering involved here but suffice to say unsecured creditors are likely to lose substantially more than the investor who was going to save the business, so if questions are going to be asked and brickbats thrown, let's aim them in the right direction. And there are certainly questions to be answered.

 

Credit professionals weren't the cause; they were dealing with the symptoms and, if they were reducing credit availability, they were doing the right thing for their own organisations.

Weekly Blog by Philip King, CEO of the ICM - 'Re-arranging the deckchairs'

The report from Lord Heseltine released this week - No stone unturned in pursuit of growth - contains some interesting proposals. I'm writing these words within hours of publication so I won't pretend for a minute to have read and digested all 89 recommendations but I have scanned the chapter focusing on localism, and building on our strengths.

 

The report says we must 'reverse the long trend to centralism' and goes on to propose we should 'empower local places by letting them take the initiative to generate local growth, in partnership with central government', and 'we must ensure that the incentives and structures of local places are organised in such a way as to secure the greatest possible economic contribution, with each area able to play to its natural strengths.’

 

It's difficult to argue with this - local people should be more aware of the needs and opportunities in their area - and this should therefore be more effective than funding being handled, and activity controlled, from the centre. However, if the 29 current Local Enterprise Partnerships, and their predecessor Regional Development Agencies have demonstrated one thing, it is that some local organisations are better than others.

 

Lord Heseltine says ‘...growth is everyone's business. Government can set national policies and create an environment where business can flourish, but success depends on businesses and individuals working together. As we prepare for growth we must - each and every one of us - do all in our power to advance it. It is not someone else's problem.’

 

Good true words but if a local infrastructure is going to work as we all want, then it needs to deliver consistently well and effectively across all regions. If it doesn't, we're in danger of just rearranging the deck chairs under a new name.