Credit Management July and August 2020

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BRANCH NEWS East of England Branch takes to the web CICM East of England Branch has now held three successful webinars in the last few weeks for CICM members and non-members. Our first, Business Challenges of Credit During and after COVID 19 & How to Tackle Them, was hosted by Andrew Martin of Hays on 14 May 2020. The speakers, CICM Chairman Pete Whitmore and Chris Sanders of CICMQ, highlighted past, present and future issues. These included top current business concerns, and the best practice for coping now and planning for the ‘new normal’. They also included the opportunities of remote working, and the need to look carefully at relationships with suppliers and customers, at new accounts, and at planning for survival. Our second Branch webinar Emergency Guide to Credit Control for All Levels was hosted by Andrew Martin of Hays on 22 May 2020. This guide – presented by Jules Eames from CICM HQ – was aimed at helping those not currently working in credit, and was in PRIOR to lockdown Thames Valley and Wessex branches held a joint event at Winchester Science Centre. The talks, which were held in the planetarium, started with Paul Uglow from Meachers Global Logistics who provided an introduction to Incoterms. He explained how the terms define relationships between buyers and sellers (who pays for what at what stage of shipping/flight). Paul discussed the importance of insurance when importing/exporting and he talked through the 2020 Incoterms changes. The most significant changes were how the Incoterm textbook had risen to 193 pages and the second half of the book now detailed each article for easier reading. Paul ended by advising us of the other changes such as new security-related requirements, different levels of insurance and enhanced explanatory notes for users. response to companies that have asked staff from other departments, including sales, to help collect cash. Jules gave a brief outline of what credit actually is, offered tips on ascertaining a customer’s willingness and ability to pay, described collection tools and techniques, and gave tips on securing the deal and on effective follow up. COVID-19 Credit Managers Playbook 2 was the title of our latest Branch webinar on 10 June 2020, which included planning and recommendations for the next phase of the crisis, coming out of lockdown, and the likely impacts and upcoming issues facing the credit management functions in the UK and internationally. We hope that our online attendees found our first three webinars enjoyable and informative. Copies of the slides and videos of each webinar are available, email eastofenglandbranch@cicm.com Author: Richard Brown FCICM East of England Branch Vice Chairman Thames Valley and Wessex branches go interplanetary After a short break Markus Kuger, Chief Economist from D&B, talked us through the D&B country risk report and presented a slide showing how global country risk levels have been rising since October 2007 and how the global outlook is deteriorating. COVID-19’s effect on companies and supply in China was also demonstrated suggesting that 50,000 companies have Tier 1 suppliers in the affected area, and another five million have one or more Tier 2 suppliers in the region. Of course since this event, COVID-19 has become the world’s problem and the global supply chain is an ever-growing concern. Markus also covered the UK labour market and EU payment behaviours before closing with a few recommendations, including mapping your supply chain in light of Brexit, COVID-19, trade wars and watching political risk closely (referencing the US elections). The event concluded with a fascinating planetarium show and some mind-blowing stats on the size of the Solar system, galaxies and the universe. Thank you to our event sponsors – Interaction Recruitment and Dun & Bradstreet – and thanks also to the speakers and attendees for a memorable evening. Author: Gary Baker FCICM, Secretary of the Thames Valley Branch Alexander Mann displays high standards to achieve CICMQ accreditation THE Solutions Credit Function team at Alexander Mann has been recognised for its adaptability and achievement in meeting the highest standards of professionalism by gaining CICMQ accreditation. “Achieving CICMQ accreditation shows how valued our credit control team really is and that they adhere to all policies regarding the credit control function,” says Eileen Bell, Head of Global Credit Control at Alexander Mann Solutions. “It highlights that we provide a valuable service to our internal and external clients and also demonstrates that we strive to provide the highest standards – something that has now been validated by CICM.” While working hard towards the accreditation, Eileen says that it didn’t come without its difficulties: “While we all know how and what we are doing, and how to hit our targets, having this all documented was a big challenge,” she admits. Despite these challenges, the team at Alexander Mann aspires to move forwards with the lessons the team members learned firmly in mind: “Now that we’ve achieved accreditation, we’ll certainly ensure that we keep all our policies up-to-date and encourage the team to make the most of the membership of CICM,” Eileen adds. “We are all striving for continuous improvement.” Alexander Mann Solutions is a global talent acquisition and management specialist. The Solutions Credit function is split across London, Belfast and Yorkshire. The team collected £2.1bn in 2019 over 29 entities. Following the results of the CICM Advisory Council Elections, there are several Regional Representative vacancies which remain unfilled. For more information visit: https://www.cicm.com/ about-cicm/vacancies-at-cicm/ Advancing the credit profession / www.cicm.com / July & August 2020 / PAGE 10
INSOLVENCY PRIME STAKE Insolvency Practitioners will be prime movers in achieving the aims of the new Insolvency Bill. AUTHOR – Michelle Thorp Michelle Thorp Acontinuous list of household names are facing difficult choices in the context of economic damage that the World forecasts could last for a decade. The challenges will not end when businesses reopen, confronting the question of doing this amid what is likely to be decreased consumer confidence and footfall, as well as reconfigurations to safely meet social distancing guidelines. Adding to the list of state support measures, the government’s Corporate Insolvency and Governance Bill is expected to be ratified in early July, with the government citing that ‘it is vital that urgent action is taken to help struggling businesses to continue to trade during the current crisis and to boost the economy once we emerge from it.’ So what are its features and how do those features work in practice? The Bill contains eight key measures. Firstly, a moratorium will be introduced. As you may know, a moratorium prevents legal action being taken against companies without court approval. This will afford companies some breathing space to pursue a rescue plan. This measure creates the role of Monitor, which will have to be fulfilled by an IP. The Monitor must supervise the company’s affairs to evaluate if the company can be rescued as a going concern (meaning it remains viable or can be returned to viability). UNIQUE TESTS There will be two types of moratorium. The first is specifically in relation to COVID-19, with its own unique test, and adds ‘or would do so if it were not for any worsening of the financial position of the company for reasons relating to coronavirus’ to the end of the proposed Monitor’s statement that it is likely that a moratorium for the company would result in the rescue of the company as a going concern. The period for the availability of this variation was to end on 30 June 2020, but the period will probably be extended. The second moratorium is a standard moratorium and will be available for the longer term. The company in a moratorium has to pay its ongoing costs, so continuing to supply it may be less of a risk for creditors. We have noted that IPs being able to confidently make the pre-requisite statement that a rescue as a going concern is likely, will require some pre-appointment work, which may make the procedure less attractive to enter. Restrictions on termination clauses will be brought in to prevent suppliers from stopping (or threatening to stop supplying) businesses in an insolvency or restructuring procedure. The courts can agree to relieve suppliers of this obligation if continuing to supply will harm their business. ‘Small’ company suppliers are temporarily exempt from the termination clause restrictions in the COVID-19 response situation. Where the supplier is not in its first financial year at the relevant time, the supplier is considered to be a ‘small’ entity if at least two of the following conditions are met in relation to its most recent financial year: • its turnover was not more than £10.2m; • its balance sheet total was not more than £5.1m; • its employees were not more than 50. As 90 percent of UK businesses meet the third criterion, fewer companies may be affected by this exemption than it may first appear. A new restructuring plan will be available to viable businesses in difficulty with debt. It will be sanctioned by the courts, which will consider whether the plan is fair, equitable and in the interests of creditors. The plan is voted on by creditors, but the court can impose it. It is understood that safeguards will be put in place for creditors who were not in favour of the plan. Adding to these measures, wrongful trading legislation will be suspended, temporarily stopping the threat of directors’ personal liability arising from continued trading in insolvency; statutory demands and winding up petitions will be voided so that companies can come to pragmatic and fair agreements with creditors; and there are changes to rules around AGMs and filing, for more flexibility. Just over half of the powers in the Bill are ‘Henry VIII’ powers, meaning that they can be amended or repealed by the government making new regulations without the need for additional legislation. Clearly the Bill will introduce changes for creditors in terms of how they work with businesses and IPs – in addition to potentially supporting creditors themselves as businesses, and indeed IPs and others. It is important that all affected by the Bill are aware of its underlying objective to support business, with IPs being a prime mover in achieving that aim. We continue to consider the Bill and will monitor it in practice, offering input to help ensure the measures serve all stakeholders in insolvency processes correctly. Michelle Thorp is CEO, Insolvency Practitioners Association. Advancing the credit profession / www.cicm.com / July & August 2020 / PAGE 11
Page 1 and 2: CREDIT MANAGEMENT CM JULY & AUGUST
Page 3 and 4: 14 CARRY ON REGARDLESS Matthew Godb
Page 5 and 6: GET YOUR CREDIT CONTROL SALARY SURV
Page 7 and 8: NEWS ROUNDUP Association adopts pos
Page 9: THE CICM THINK TANK > THE NEWS IN B
Page 13 and 14: INSOLVENCY EXCLUSIVE The Moratorium
Page 15 and 16: ASK THE EXPERTS IN this series, we
Page 17 and 18: COMMERCIAL COLLECTIONS PERSONAL ACC
Page 19 and 20: COMMERCIAL COLLECTIONS AUTHOR - Sea
Page 21 and 22: SECTOR COMMENT DINING OUT Has the r
Page 23 and 24: OPINION AUTHOR - John Ricketts FCIC
Page 25 and 26: LEGAL MATTERS AUTHOR - Peter Walker
Page 27 and 28: VIEW FROM THE SEA FRONT AUTHOR - Da
Page 29 and 30: EDUCATION & MEMBERSHIP Which CICM q
Page 31 and 32: Handy Andes are not to be sniffed a
Page 33 and 34: COUNTRY FOCUS France is our nearest
Page 35 and 36: COUNTRY FOCUS AUTHOR - Adam Bernste
Page 37 and 38: Each of our Corporate Partners is c
Page 39 and 40: CAREERS ADVICE STAYING AHEAD Why op
Page 41 and 42: It needn’t be that hard. Imagine
Page 43 and 44: OPINION AUTHOR - Chris Sanders FCIC
Page 45 and 46: PAYMENT TRENDS Data supplied by the
Page 47 and 48: OPINION LADIES FIRST A talk at a La
Page 49 and 50: PERSONAL DEVELOPMENT Making Memorie
Page 51 and 52: HR MATTERS Vicarious Living Indiscr
Page 53 and 54: INSPIRE ME IN THE NEW ERA OF WORK Y
Page 55 and 56: More reasons to be a member Make co
Page 57 and 58: FOR ADVERTISING INFORMATION OPTIONS
Page 59 and 60: PAYMENT SOLUTIONS ARE YOU A LEADER

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