Lovetts Newsletter - March 2007


		Yesterday at the ICM Convention... ..I heard Simon Woodruffe founder of 'Yo! Sushi' giving the keynote speech which finished with him grabbing a microphone and singing his own specially composed song to the astonished delegates! Credit management conferences will never be the same again. Actually, he made some interesting and serious points about life and business. Here's one - 'Every business needs to have some ziz in it'. That's quite a challenge when you are extracting cash from recaltricant debtors!

		Credit Terms and Commercial Clout Woolworths recently decided to rationalise its payment terms into 3 periods – 30 days, 60 days, 90 days – after operating 46 different settlement schedules for some 700 suppliers. We might have hurried to congratulate them for their credit management savvy. Unfortunately, Woolworths took the opportunity of asking for a cash contribution from all its suppliers towards store formats and product development which they had already incurred, as a deduction from invoices they were due to pay. “Unprecedented” was the angry reaction from many of its suppliers. We note that its stock market pricing has been falling steadily over the past 6 months, whilst the FTSE 100 has been steadily rising. Which came first? The chicken – or the egg? Does this attitude towards suppliers cause lack of confidence, or is this action necessary to restore confidence? It is salutary to ask - how important is your biggest customer? What would you say if they tried to tweak your tail?

		Seaside towns and bankrupts Experian released figures last month showing that out of 286 major towns and cities, a few leading seaside towns have the highest % penetration of bankrupts per adult head of population. Torquay is no.1 with 1.05%, with Bournemouth, Eastbourne, Barnstaple, Hastings and Weymouth all in the Top 10. Are they havens of the financially impecunious? Or is there a more obvious explanation? It seems that perhaps the proportion of the population being over the age of 18 might just be a bit higher in our balmy resorts than in the cities, or, put less tactfully, there are relatively less younger people in these towns so the statistical penetration is therefore greater.

		Winding Up Petitions are...UP! The 2006 Q4 figures released by the Department for Constitutional Affairs show these to be 8% up, despite the annual figures remaining fairly steady. At 3,236 this represents the second highest final quarter since the 1990s. Debtor petitions are UP in the past 2 years (because of the reduction in time for applying to discharge bankruptcy).

		Disclosing your files The Information Commissioner’s Office (ICO) has just produced a useful little summary of ‘Good Practice’ when faced with a request for information from someone whose personal data you hold. It may help you to avoid a mistake in the giving, or witholding, of information. To view the pdf - click here

		Is your debtor's purchasing manager personally liable? He might just be! If a debtor’s company name is not shown on an Order form, or cheque, signed by an individual on behalf of a company, they will be personally liable for the cost of the order. So if someone orders goods personally, and then tries to claim subsequently that he/she was ordering in the name of a company, then tough – they are liable personally.

		Financial Services Ombudsman New FSO (Financial Services Ombudsman) complaint-handling procedures are coming into force from 6 April 2007. Does this affect you and are you ready? It affects all those with a standard credit licence, and covers a wide range of businesses for whom consumer credit is very much a secondary part of their business. You may find that you are already complying with these requirements in your normal business practice, but on the other hand….you may not! Check out the FSO website with this link - http://www.financial-ombudsman.org.uk/faq/answers/consumer_credit_a4.html

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