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 - '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 - '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 - 'Save us from madness'

Last Friday, Vince Cable announced that small firms will no longer have to produce independently audited accounts in a measure that he believes will save 42,000 businesses £40 million per year. I've always respected Vince Cable and have no doubt of his commitment to helping small business, but such a move demonstrates a naivety that verges on madness.

I agree with him when he says that 'one of the barriers to growth is the burden of regulation...it takes up time and stops busines growing and that means our economy does not grow'. That is why the ICM has indicated its support for the Daily Telegraph's 'red tape campaign'.

But please can we understand that producing accounts is not 'administration' and neither is it unnecessary red tape. Without numbers, a business cannot know how it's doing, it cannot manage its cashflow and it is far more likely to fail; without audited numbers that can be trusted, banks, creditors and financiers will not support the business and again it is far more likely to fail; and without audited numbers and the ability to access finance, the economy will not grow. Quite the opposite; it will shrink.

The Government is explaining its position by telling us that the rules for small business in respect to auditing and accounts are stricter in the UK than is required by EU law. They tell us also that for micro businesses, those with less than 10 employees, they will push for exemptions to remove the requirement to produce two sets of accounts.

And that's not all. They intend 'helping' medium sized businesses by pushing for EU restrictions to be lifted so that they no longer need their accounts independently audited and will look at relaxing the audit and accounts rules for subsidiaries.

The ICM is going to lobby vigorously against these steps and against the Government's insistence on delivering mixed messages to business. Credit fuels business. Access to credit comes from greater access to information, not less. Why is such a simple statement of fact so apparently difficult for the Government to understand?

2nd weekly blog of Philip King, CEO of the ICM - skills and risk

A few days ago, Rebecca Smithers, consumer affairs correspondent of The Guardian wrote that British manufacturing is at risk of 'collapse'. The reasons she cited included a worsening skills shortage that will leave thousands of hi-tech jobs unfilled over the next five years. More recently, a leading academic also stated that it is not just in the high-tech industries that skills are missing. He warned that all areas of business need the right, relevant skills to be successful, and this includes skills in credit management.

It is comforting to know, I hope, that there are organisations out there - the ICM foremost among them - who take such warnings seriously. The successful and ongoing development of our qualifications, and our work with employers, practitioners, and industry is aimed at ensuring the industry becomes more professional, and that the right skills are available to help Britain through the recovery.

The property and environmental services giant Connaught has collapsed into administration, putting thousands of jobs at risk. In June, the company warned that public spending cuts, designed to reduce the government's budget deficit, would impact 31 projects, reducing its revenues by £80m this year. This hit, it said, "would push the company into the red." Public sector cuts are going to hit businesses across all sectors, and many of those will be our customers.

In another annoucement that links closely with this theme, I note that the "time to pay" scheme has now reached its peak as HMRC appears to be rejecting an increasingly large number of applications to take part in the initiative. "Time to pay" allows businesses to defer tax payments during the recession. Syscap, an independent finance provider, says that in the last few weeks, a good many businesses have been in contact to secure loans to meet tax obligations either becuase HMRC has rejected their application to the scheme or because they have taken a business off the scheme. Perhaps this should not come as a surprise, but credit professionals are going to see their customers under greater cashflow pressure as a result, and the number of insolvencies is likely to rise as I've been predicting for several months now. Knowing our customers - and their customers in turn - is going to be more important than ever in the months ahead. Close monitoring of risk will enable creditors to take action to avoid or at least minimise potential bad debts.

1st Weekly Blog from Philip King, CEO of the ICM

There were two announcements in the last few days that especially caught my attention. The first was by the Forum for Private Business (FPB) who had submitted a freedom of information (FOI) request asking police forces how quickly they processed payments in the 2009/10 financial year.

It revealed companies in some parts of the country had to wait more than two months for payment from their local force. Companies doing business with the police in other areas, however, were paid in a matter of days.

Now there is nothing new or surprising in this. Across all industries and sectors, there are differences in practice and experience and I bet even those paying promptly end up paying some suppliers quicker than others.

The reason those suppliers get paid more quickly than others is similarly no secret. It comes down to having good credit management practices. Getting the basics right, such as ensuring the invoice details are correct and building personal relationships between departments is key to getting paid on time. Some practice is ingrained and part of the business culture, but other skills can be taught, and this is our role.

The second piece of news I read was in the Independent. It announced that one in 10 northerners 'will be jobless in the next 5 years'. A leading economics think-tank predicted that unemployment is set to breach the psychologically important 10 percent level over the next five years - but only in the north of the country.

Unemployment is bound to grow and - while it may be worse in the North - it's going to affect all areas, particularly as the public sector cuts bite. One impact will be the emergence of more sole traders who see redundancy as an opportunity to leave the world of PAYE and strike out on their own with their redundancy cheque firmly in hand. As suppliers, we should be prepared to give them good advice that will help their business survive the first critical 12 months. We could do worse than point them to the Managing Cashflow Guides at www.creditmanagement.org.uk

Meanwhile closer to home, the ICM exam results came out last weekend. As with the 'A' level students, some learners will be delighted with their performance and others devastated and disappointed. Studying while maintaining a career is never easy and they deserve our congratulations for their commitment (whatever the result) and our support. They are the credit professionals of tomorrow and will help raise the standards of what we do.