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Credit issues are on the rise

Credit issues are on the rise

Our recent Business Pulse Check showed 7% of respondents have experienced more late payers and defaults, while 4% are struggling to pay creditors. In recent client coaching sessions, I am also noticing that there is an emergence of fiddly credit issues that are starting to take up a little more time for both business owners and their credit staff.  These issues range from company liquidations, more creative excuses for not paying, down to just not paying on time, or paying later than normal. In some cases, the debtor has grown their exposure with the company over recent months without any further analysis of the increasing credit risk.

In a paper I wrote earlier this year on the Changing Face of Credit Risk I emphasised the need to continue to be vigilant with your credit control processes and procedures.

With the Christmas break coming up it is critical that everyone makes sure they have robust processes in place for collecting outstanding debts – including pro-actively following up overdue amounts expediently. Anything left outstanding on Christmas Day is unlikely to be paid until late January, with the resultant impact on your company cashflow at a time when it is most needed.

In the meantime I would suggest you remain focused on the following:

  • Watch for changing signs with any clients i.e. increased exposure/delays or excuses in paying.
  • Where appropriate be pro-active in updating Terms of Trade, particularly in cases where you may not have personal guarantees and exposure is increasing.
  • Use credit checking more regularly for clients who are showing different patterns in their payments.
  • If appropriate, consider registering under the PPSR register.
  • For clients showing changes in trading/payment patterns consider putting in place credit watch processes.
Photo of Christchurch TBO Steve Wilkinson

Steve Wilkinson is the owner of The Alternative Board Christchurch and North Canterbury.  You can contact Steve on  021 334 203, [email protected], or connect with him on LinkedIn.

Unsettled Spring brings supply chain disruptions

Unsettled Spring brings supply chain disruptions

Issues concerning working capital and supply chains have emerged in the Spring Pulse Check, with members flagging problems with orders, disruptions and payments.

Difficulties with supply chains, imports and exports have been due to port and shipping disruptions but despite the challenges, members are proactively planning their future after a year which saw most business owners change the way they operate. Some have opted for digital transformation, others increased marketing spend while still more reduced their costs and, in doing so, increased profits.

The Spring Pulse Check found that overall, confidence and optimism remain high and job prospects steady in small-to-medium size businesses outside the hard-hit sectors of retail, tourism and hospitality but there is a rise in the number of businesses having difficulty finding skilled workers.

At a personal level, business owners are exhausted – the majority would like nothing more than to switch off for a few weeks or, at the very least, have a bit of a rest, but the main reflections provided in the Spring Pulse Check have been the ‘three wishes’ they would ask of Government. These included continuing financial support, consistent policies plus a plea to give small businesses more work and greater involvement in discussions about their sector.

Stephen James observed: “Our members have flagged a number of issues and, although numbers are relatively low at present, it suggests there will be no smooth sailing into summer.  Member confidence levels and optimism remain high but fatigue is setting in. Having maintained confidence and resilience through the main crisis periods, their hard work and stress is starting to take its toll. 

“The ‘three wishes’ they would ask of the Government were continuing financial support, something that has been a lifeline for businesses large and small, consistent policy, so keep doing what you’re doing but do it really well and, lastly, a plea to put small businesses to work starting with less red tape and providing greater accessibility to government contracts or tenders.”

The Spring Pulse Check surveyed 269 members and associates between 30 October – 6 November with a confidence level of 90% and a 5% margin of error. You can download a copy of the results in full here.

The Alternative Board conducted the Spring Pulse Check with 269 members and associates between 30 October – 6 November with a confidence level of 90% and a 5% margin of error.

Stephen James is the owner of The Alternative Board NZ.   You can contact Stephen on 021 606 934, [email protected] or connect with him on LinkedIn

Small businesses look beyond COVID-19 with confidence

Small businesses look beyond COVID-19 with confidence

For the third month in a row, small-to-medium size businesses outside the hard-hit sectors of retail, tourism and hospitality are proving confident, optimistic and actively planning for their future beyond COVID-19.

Our September Pulse Check shows exceptional levels of confidence and optimism with business levels booming or the same as last year, relatively unchanged levels of employment and sustained sales.

More than 80% of you are confident you’ll make it through, more than half report sustained or improved business levels, nearly two-thirds are optimistic about the next twelve months and 65% are already working on future strategies and getting business plans in place.

On the downside, 2020 has taken a toll with business owners feeling exhausted and that’s a real concern. Government support and business advisors have helped get through the difficult days of 2020 but despite weathering exhaustion, lockdowns, alert level changes and varying levels of uncertainty, you’re not giving up and have your head down, planning your way to the future.

For some, the forthcoming election, mainstream media stories and government policy are reducing confidence, while for others, their own resilience drawn from past experience, government policy, and the thought of open borders is a confidence booster.

Stephen James observed: “Our members are, for the most part, outside the sectors acutely affected, such as retail, tourism and hospitality. It may seem that member confidence levels and optimism are at odds with other commentary but our small business owners are efficient and resilient because they have to be. Small business owners regard their employees as family, do their utmost to retain them and are able to adapt and evolve business practices swiftly with the right support, even among those hardest hit.

“It’s heartening – and speaks volumes for business owners – that so many have got through with relatively unchanged levels of employment, due in part to the government support people have  turned to and a willingness to change where necessary.

“One of our priorities will be to help business owners cope with the high levels of exhaustion they’ve reported. We see this as a danger area as, no matter how resilient they may be, working through an ongoing crisis is hard and it is draining. Supporting our business owners helps them to help their business, so developing strategies and solutions to what we know will be an ongoing challenge is an area we will be working on with our boards and through our coaching sessions”.

The September Pulse Check surveyed 266 of our members and associates between September 18 – 27 with a confidence level of 90% and a 5% margin of error. You can download a copy of the results in full here.

The Alternative Board conducted the September Pulse Check survey of 266 of its members and associates between September 18 – 27 with a confidence level of 90% and a 5% margin of error.

Brave Small Businesses Buck The Trend

Brave Small Businesses Buck The Trend

Confident and determined to get through – that’s the verdict from members this August when we checked in to see how you were all doing

Contrary to ongoing ‘doom-and-gloom’ commentary, there’s a strong, steady pulse beating in our small business sector with business owners like you displaying remarkable resilience, high confidence and a pragmatic approach to the challenges of COVID19.

Our August Business Pulse revealed 95% of small-to-medium size enterprises are confident they’ll get through.  More than a third of small businesses have benefited from government support with only a small percentage anticipating job losses once the wage subsidy ends. Banks have been understanding, helping where necessary or carrying on with business as usual, and jobs are holding steady.

Sales and orders remain buoyant with supply lines and international transportation links for exporters seemingly intact.

“Given we are awash with negative commentary, the results were heartening” says managing director  Stephen James. “I think, in part, the focus has been on the hit taken by more visible sectors like tourism and hospitality but our members are involved in many other activities and their perspective hasn’t necessarily been reflected to date.

“The strong Pulse Check was even more remarkable as the change to Alert Level Three for Auckland and Alert Level Two for the rest of New Zealand occurred during the consultation period.”

On the down side, mainstream media is reducing confidence levels and the wish-list of things that would help business owners get through the remainder of 2020 includes more customers, more government support – and a rest, as business owners report they’re feeling exhausted.

“It is understandable that business owners are exhausted. Although confidence is high and business steady, they’ve worked extremely hard to achieve stability in our tumultuous times. I would anticipate this pace will continue as they adapt and adopt new approaches or innovations. While things may change and outlooks darken, business owners are pragmatic in their determination – the Kiwi ‘can do’ approach to adversity and an unwillingness to be beaten is certainly in evidence. They are ‘COVID courageous’ and I think their confidence level reflects this.”

Keeping in mind our members and associates are primarily involved in industries that make, supply, service, fix, invent or build things and the results may reflect that this group has been under-represented to date, with focus falling on hospitality, retail and tourism in other surveys.

Throughout all the upheaval we’ve seen in 2020, one constant has been the support of The Alternative Board, for and among its members. The majority of members who took part in August’s survey said they had looked to and received support from us and, rest assured, we continue to make sure we can deliver the support and resources you need.

The August Pulse Check survey of 275 of its members and associates was conducted between August 7 – 19 with a confidence level of 90% and a 5% margin of error.  You can download a copy of the results in full here and September’s Pulse Check will be opened to members on September 9 when we’ll check in to see how things are going.

The Alternative Board conducted the August Pulse Check survey of 275 of its members and associates between August 7 – 19 with a confidence level of 90% and a 5% margin of error.

Kiwi Businesses Ready To Reinvent The Future

Kiwi Businesses Ready To Reinvent The Future

Pulse check shows members are tackling the challenges of COVID19 head-on

We asked you how you were doing and you told us loud and clear — New Zealand’s small businesses are bravely facing the future, investing in growth and ready to reinvent themselves if necessary.

Our July Pulse Check revealed you are confident you’ll make it through — even though for some it has been touch and go.

Many of you are ready to reinvent yourselves if necessary, increasing spending on marketing, digital solutions and additional staff but you are borrowing more.

Your responses reflect what we’ve been hearing from our members  — that it has been a very challenging time. What was surprising was the degree of flexibility and willingness to change.

There was no doubt that the coming months will be challenging but finding innovative solutions and meeting the challenges head-on are at the forefront of your thinking.

Government support has been the saviour for many and we were pleased to see that the majority of our members looked to The Alternative Board for help and advice.

The health and viability of our business owners is at the heart of all we do, which is why we feel this regular Pulse check is critical. Listening to you in this way means we can ensure you have the right support and advice you need not just to get through the disruption of COVID19 but to thrive and grow into the future.

Running a business in ‘ordinary’ times is demanding but it is even more so in these extraordinary times. We know members round the country have been working nonstop and, after many months, you have started to feel the effects with many business owners saying they need a rest. Unfortunately, any respite is out of reach right now as you strive to meet the many challenges we face so I would urge you to continue to look for support from your board and facilitator as the months progress and look after your physical and mental well-being.

The Pulse Check was conducted during July across its nationwide network of members and boards and we will be checking in with you again in August. In the meantime, a heartfelt thanks from all of us at The Alternative Board on behalf of all the Kiwis you work with, for and alongside – small to medium enterprises are the heartbeat of our economy and your drive and tenacity is incredible. Thank you – and remember we’re always on hand to help.

The Alternative Board conducted the Pulse Check survey of 262 of its members and associates between July 7 – 19 with a confidence level of 90% and a 5% margin of error.

Stephen James is the owner of The Alternative Board NZ.   You can contact Stephen on 021 606 934, [email protected] or connect with him on LinkedIn

Pulse Check