Dragon urges suppliers to take more responsibility

James Caan, the serial entrepreneur, is urging smaller businesses to take more responsibility for their own actions in getting paid, and to consider alternative funding mechanisms in order to keep the cash flowing.

Writing the first in a new series of guest blogs for the Institute of Credit Management, Caan suggests that small businesses need to act to remove the barriers to payment: “The basics are, of course, to invoice on time, promptly and accurately,” he says. “They are also to ensure that your quote has been accepted, the product or service delivered, and the terms and conditions of payment agreed in advance.

“If you do nothing else but stick to these simple rules, then your business will not only survive, but it will actually have every prospect of growing and contributing to the economic recovery that we so dearly seek.”

And he says that there is more small business can do: “The Government is keen on encouraging the banks to lend but alternative funding mechanisms such as factoring and invoice discounting rarely deserve the negative publicity they are inclined to attract, and Supply Chain Finance – a particular favourite of Government in 2012 – also has its place for certain companies at certain times.”

Knowing your customer, Caan acknowledges, is a particular mantra of the ICM, and again the tools at a company’s disposal – from credit reference agencies to credit insurance – all have a role to play: “They not only protect you from the damaging impact of not getting paid, but more positively in taking on new customers and even new markets, safe in the knowledge that you are better informed,” he adds.

Caan says that professional credit managers, and Members of the ICM specifically, have a critical role to play, and that they are already actively supporting the UK recovery: “As professionals, it is incumbent upon the ICM and its Members throughout 2013 and beyond to ensure that the support is there for these companies when they need it most.”

James Caan is the first in a series of bloggers that the ICM will be inviting to contribute as ‘guests’ over the coning months. For the latest, go to http://www.icm.org.uk/home/ceos-blog.

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