Weekly Blog by Philip King, CEO of the ICM - 'EU directives, Eire misery, and meaningless forecasting'

Having recently returned from a meeting of FECMA (the Federation of European Credit Management Associations) in Paris, it's interesting, as always, to catch up with my colleagues and share their experiences. There was much animated conversation about the new EU Late Payment Legislation, particularly with French and Spanish delegates who now have real experience of domestic legislation that sets a statutory limit on payment terms of 30 days. I accept this is anecdotal rather than hard scientific evidence, but their views are crystal clear: the legislation hasn't made the slightest difference.

They found that businesses experiencing late payment are still reluctant to take action against their customers for fear of upsetting them and losing future contracts. There's a lack of real knowledge about how the legislation should be applied, and businesses that want to exploit their suppliers will find a way of doing so, legislation or not!

The legislation will still be some time coming; there are nearly two years before the Directive has to be implemented by member states. We need to use that period to explore long and hard how we might further improve payment and business culture across the UK. I have a meeting with Mark Prisk, Minister for Business & Enterprise, next month and this is one of the subjects that I plan to raise. I've already highlighted the failings of the Directive, but let's see if some good can come of it.

Meanwhile I note that the latest Bank of England Inflation Report, published under the guidance of the Monetary Policy Committee, has some almost amusing words in its overview which ends: "...the chances of inflation being either above or below the target by the end of the forecast period are judged to be roughly equal."

I understand the complexities involved in putting such reports together, and the challenges in making accurate forecasts. But am I alone in thinking that experts should at least have a view? This just feels like a classic case of 'hedging your bets' or 'sitting on the fence' to me!

And finally, over to Ireland - metaphorically, not physically! What a sorry story, and a worrying one too for the people who live there, the businesses that trade there, and the businesses that trade with it.

I've been saying consistently to anyone who will listen that businesses in the UK are underestimating the negative impact of our public spending cuts. But I fear the pain we're going to feel is incomparable to the misery that our neighbours now face.

Weekly Blog by Philip King, CEO of the ICM - 'Ignorance is damaging'

I was in illustrious company earlier in the week when I was invited as one of the leading business organisations to the Small Business Summit at the Department of Business, Innovation and Skills (BIS) - http://bit.ly/9mG8bs.

Vince Cable, Mark Prisk, Lord Young, Francis Maude and Grant Shapps were all in attendance and lending their support to an initiative that has three key commitments to small business: to improve access to finance; to make it easier to do business with the public sector; and to allow social tenants to start up their business at home.

It is encouraging that the Government is working hard to support small businesses; they are clearly going to be key to the recovery. But such efforts are only going to work if businesses are aware of the initiatives in the first place, and know where they can go for help.

One of the long-standing criticisms of the EFG (Enterprise Finance Guarantee) Scheme, for example, is that small businesses, banks and business organisations have seldom known enough about the scheme, and its details, with the result that demand has been depressed. Similarly, banks have many products to help small business - not just the ubiquitous overdraft - but these businesses either don't understand them or have never been told what other products may be suitable.

That ignorance extends to understanding the basic principles of cashflow management. Business owners, and especially micro business owners, are too busy making sure their businesses survive to worry about getting - or even looking for - advice, even when that advice is the very stuff they need to stay in business!

There have now been more than 185,000 downloads of the ICM's Managing Cashflow Guides. These numbers are very encouraging, and we are rightfully proud of what we have achieved to date. But we have to balance this success with the fact that there are 4.8 million small and medium businesses in the UK that employ less than 250 people, and when we compare our downloads to the potential target audience, there is still much work to be done.

Government needs to make a concerted and focused effort - including working further with organisations like the ICM - to educate businesses and make them aware of the basics that will sustain them into the future.

http://www.creditmanagement.org.uk/bisguides.htm

http://www.icm.org.uk

http://twitter.com/philipkingicm

Weekly Blog by Philip King, CEO of the ICM - Spot the stars

It has been a busy week that started with the inaugural meeting of the Small Business Economic Forum formed by the new Small Business Minister Mark Prisk. The forum brought together banks and business representatives, among them the Institute of Credit Management, with a remit to 'share their views with Ministers on enterprise issues, in particular economic issues facing small firms'.

What we learned from the first forum is that there is a continuing divide between banks' and business organisations' perceptions as regards to what extent the banks are lending. That, in itself, was not a surprise, but perhaps more of a surprise was the lack of any sign of a solution. In short, it is an issue that is unlikely to go away.

Whether the forum will be successful or not, I do not know. We can only do our best to ensure that it is. Certainly Mr Prisk is of the view that the forum should produce actions, not just words, and that is encouraging. It was good to be invited and welcomed by the new Coalition, and a good opportunity to share views across a wide spectrum of organisations. It was encouraging too to see the engagement of the Business Secretary Vince Cable who joined the meeting in the latter stages to lend his support. http://bit.ly/c3umbH

As I write, I have just finished listening to the statement by George Osborne regarding the Comprehensive Spending Review (CSR). It was a good, if rare, opportunity to listen to a whole speech. It went on for more than an hour and it was hard to get too much detail and that is a pity, for it is in the detail that the devil will be.

Little he said was totally unexpected: 490,000 predicted public sector job losses were in line with predictions, and the impact of people losing jobs, or jobs left vacant, and people entering the market as self-employed will be huge. My worry - and one that I expressed at the Equifax/RBS Exchange Day in London, is that too many start-ups fail to get the basics right. Too many of them are trying to sell the wrong product, or are in the wrong place, or both, and the cuts will produce a large number of people who think they can use their redundancy cheque as a means to fulfill a long-held dream. Sadly, for many, the dream will turn into a nightmare and credit professionals are going to have the challenge of spotting the stars and avoiding the dangers.

For more information about the Institute of Credit Management visit http://www.icm.org.uk/ or follow ICM on Twitter http://www.twitter.com/icmorg.