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 - '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