Monthly Archives: August 2012

Tips to Avoid Overdue Payments: Small Business Advice

One of the most crippling problems amongst small businesses is the excessive number of overdue payments. The average SME receives payments from other businesses two months late, and many suffer greatly from the delay.

The Guardian lists several tips for avoiding such situations:

  • Don’t make credit management subordinate to sales

Make sure the incentives you give o your sales team take credit into account and do not allow sales to overrule the people in charge of credit management. In very small businesses the two roles may not be distinct, but even as a sole trader you should still try to think about each prospective sale: once wearing a ‘sales hat’ and one wearing a ‘credit hat.’

  • Treat credit management as an enabler of sales, not an obstacle

The role of credit management should be to help you figure out a set of conditions under which you can say yes to selling on credit to each individual customer. Knowing as much as possible about the creditworthiness and payment habits of your customers, through a strong relationship and the use of credit information, can even help you win business by rewarding prompt payers.

  • Develop a well-defined credit policy and stick to it

It doesn’t have to be hundreds of pages long, or even a written document. Your policy does, however, have to be clear about when you are willing to give credit, how much and who to, as well as when exactly you would consider a payment to be overdue. Your policy must be known to all of your customer-facing staff and communicated in writing before each sale. When circumstances change, update the policy, don’t overrule it. Most businesses treat big customers differently and that’s fine, as long as you still have policies for those.

  • See the big picture

If you sell on credit, you are someone’s banker, so think like one. Giving credit is as much a part of your business as getting orders; a profit on paper may quickly turn into a loss after you add yo your costs the costs of financing your work capital, chasing up late payments, and absorbing non-payment. Try to have a good idea at all times of what that cost is.

  • Be organized about invoicing and collections-

The invoicing and collections process turns promises into cash; don’t leave it to chance. Set up a routine for invoicing and collections (including polite reminders before the money is due) and stick to it. Some customers look out for signs of disorganization and use them to determine which suppliers they can get away with paying late; individuals may even use them in order to rationalize the fact that they’re paying you late. Make sure you don’t present yourself as the easiest or most deserving target.

  • Know your customer-

Make sure you understand your customers’ payment process and the systems they use, and if possible get to know the individuals dealing with invoices. Ensure your invoices are designed to fit into their way of working. Some customers, especially large ones, will have no incentive to streamline their processes precisely because a convoluted payment process will allow them to pay late.

  • Know your rights

The law gives you, as a supplier, the ability to charge interest on overdue payments; you can calculate this using an online tool hosted on Business Link. This is easier said than done, but it’s still useful to clarify, in writing, that you reserve the right to charge interest. Some suppliers even do this automatically when debts become overdue, and invoice their customers for the additional interest right away. The point of this is rarely to actually receive the extra money, but rather to jolt customers into paying on time.

  • Invest in professional credit management-

With credit management, having good staff really does make a difference. As soon as you are able to, make sure finance of credit staff receive training in credit management, or that you hire staff who already have.


Increased Interest in Gold Investments

Investor interest in gold has peaked recently as the possible QE 3 announcement from Fed Chairman Ben Bernanke looms ominously overhead. Seeking Alpha explains that the gold trend has attracted not only casual investors, but also major institutions and stockholders like Paulson & Co. and even Mexico.
The top three include:

“1. George Soros: Soro’s massive purchase of the SPDR Gold Trust makes headlines given the fact that he dumped the majority of his holdings when gold as in the $1,200/oz. area, leaving him on the sidelines for the metal’s historic run. He has since recanted his distaste for gold and this ETF by making a massive allocation. The last time Soros reported what was in his portfolio, he held 319,550 shares of the fund, or about $52 million worth at the time of the release. Now, it has been reported that his GLD stake has jumped to a total of 884,400 shares, worth roughly $137.3 million.

2. John Paulson: Paulson also made a massive bet on GLD, as the billionaire increased his GLD stake by 26% to hold 21.8 million shares of the world’s second largest ETF. That means that Paulson has approximately 44% of his company’s assets in this singular fund; a big bet that could be a make or break investment depending on the future of this precious metal.

3. Russia: Russian central bank purchases have been one of the biggest stories this year, as the emerging market has been loading up on theyellow commodity. In the trailing year, the country has purchased more than 80 tons as they now have more than $47 billion invested in physical bullion.”

US Economy Still Growing But Painfully Slow

The numbers are in and the results are that the economy is growing at a sluggish pace, almost too slow to notice.

Although slightly higher than the 1.5 percent that the Commerce Department originally predicted, the April to June quarter growth of 1.7 percent is an omen that the US economy during the last half of the year will not do too much better.

The slight increase rode on somewhat improved consumer spending and increased export trade. But analysts are unhappy that growth did not reach the 2 percent annual rate that the economy experienced during the January to March first quarter of 20012, and nowhere near the 4.1 percent growth seen during 2011’s last quarter.

Economists are not optimistic that the US economy can substantially pull out from its lackadaisical growth trend, expecting similar moderate growth for the rest of 2012 hovering around 2 percent.

‘The economy was sluggish in the second quarter, and the slight upward revision does nothing to change that picture,’’ said John Ryding, an economist at RDQ Economics.

Heinz Reports Quarterly Results

The H.J. Heinz Company recently held its annual shareholder meeting. William R. Johnson, the company chairman, president and CEO, announced that the business plans to report “strong first-quarter results.”

According to BusinessWeek, these include:

  • Organic sales growth (volume plus price) of almost 5%, marking the Company’s 29th consecutive quarter of organic top-line growth;
  • Net income growth of 10% from continuing operations and 15% on a constant basis, excluding productivity charges a year ago;
  • Higher earnings per share of $0.87, an increase of more than 10% from continuing operations, excluding productivity charges a year ago.

The results from January thru March reflect “dynamic growth in Emerging Markets as well as improved productivity, higher margins and a favorable tax rate,” according to Mr. Johnson. Heinz’s growth throughout the quarter was achieved “despite the headwinds of a still weak economy and adverse foreign currency trends that reduced EPS by around four cents.”

“Overall, our strong first-quarter results put Heinz on track to deliver our previously announced outlook for Fiscal 2013.”

New Jersey Governor Chris Christie Discusses Leadership in RNC Keynote Address

New Jersey Governor Chris Christie

Republican Governor of New Jersey Chris Christie gave the keynote speech at the Republican National Convention in Tampa on Tuesday night, directing much of his speech at the economic crisis and the Republican vision for the future.

Here is a collection of some of Christie’s most quotable quotes:

•    “There’s only one thing missing now. Leadership. It takes leadership that you don’t get from reading a poll. You see, Mr. President, real leaders don’t follow polls. Real leaders change polls.”

•    “Now, I know this simple truth and I’m not afraid to say it: Our ideas are right for America and their ideas have failed America.”

•    “They believe that the American people don’t want to hear the truth about the extent of our fiscal difficulties and they believe the American people need to be coddled by big government. They believe the American people are content to live the lie with them. They’re wrong.”

•    “Their plan: whistle a happy tune while driving us off the fiscal cliff, as long as they are behind the wheel of power when we fall.”

•    “We all must share in the sacrifice. Any leader that tells us differently is simply not telling the truth.”

IBM’s “Watson” Heading to a Phone Near You

After four years of development and a sensational successful run on the TV quiz show “Jeopardy!” IBM’s answer to Apple’s Siri is ready for the next step: placement inside consumer’s pockets.

Vice president of innovation at IBM, Bernie Meyerson, says that he sees Watson as a voice-activated electronic personal assistant which can answer questions in a matter of moments. For instance a farmer might consult Watson about when the best time to plant corn in his field will be. If he is standing in his cornfield when he inquires, Watson will answer in seconds after consulting its database based on location, historical trends and scientific studies.

IBM hopes that revenue from Watson will reach $16 billion by 2015 after they find more uses for the device. Watson already knows its popular culture and history, as was demonstrated on its acclaimed appearance on “Jeopardy!”  Watson went “brain to CPU” against two of Jeopardy’s greatest players, Ken Jennings and Brad Rutter, and won, in front of 15 million viewers.

Since then Watson has gone back to school and mastered financial information for Citigroup Inc, and cancer information for WellPoint Inc. Coming up next in Watson 2.0 is an energy-efficient device which can work on tablets and smartphones.

“The power it takes to make Watson work is dropping down like a stone,” Meyerson said. “One day, you will have ready access to an incredible engine with a world knowledge base.”

United Realty Partners

Together, Jacob Frydman and Mr. Eli Verschleiser created United Realty Partners, a privately held real estate investment and advisory firm. Jacob Frydman undertook his first real estate investment in high school in New Jersey. Since that time, he has received his B.S. in Finance from Boston University and a J.D. from Case Western Reserve University School of Law, and has continued investing in real estate. He has acquired more than 5 million square feet of real estate that includes both existing and developing projects through the eastern United States.

While focusing on properties in the New York area, United Realty Partners is also looking to invest in residential and commercial properties within a two hour radius of major metropolitan areas.

Some of the projects that have created the most headlines for Jacob Frydman include the development of Two Dag Hamerjkold Plaza in mid-town Manhattan. This project is used exclusively by foreign governments as their missions to the United Nations.  He also re-developed the Aetna Building in the financial district in lower Manhattan. Furthermore, he purchased the NBC New York television studios from General Electric Corp.

Good News for American Companies

Michael Shaoul of Marketfield Asset Management

For the first time in over ten years American companies took the majority of spots on the top-20 list of the world’s biggest companies. It took ten quarters of economic expansion and profit growth since Standard & Poor’s 500 Index hit rock bottom in March 2009 for the S&P to grow by 109% and send US corporations back into the limelight.

Of the world’s 20 largest companies, 14 are US-based. Since stocks hit their high point in 2007, seven US companies have joined the top 20 list, including Apple Inc; International Business Machines Corp;  and Wells Fargo. These companies replaced Gazprom OAO, (Moscow); China Petroleum & Chemical Corp, (Beijing); Petroleo Brasileiro SA, (Rio de Janeiro), and six more non-US companies.  Of the total of nine new companies that made up list of 20, a total of seven are US-based and only two- BHP Billiton Ltd and Nestle SA have their headquarters outside the US.

This shift in national representation of companies on the list of 20 largest global companies is a reflection of volatility found in emerging markets, and also highlights the way innovation builds value in the US.

“The U.S. is just the best place on the planet to have a great idea and turn it into a big business,”

says Michael Shaoul, chairman of New York-based Marketfield Asset Management, with AUM of $2.7 billion. Shaoul’s fund surpassed 99 percent of his competitor’s performance this past year.

“There’s another reason for this list to have shifted and that is the falling of prior darlings,” added Shaoul. “A lot of the ones which have fallen are energy and emerging-market related.”

Brazilian Firm Edra Equipamentos Develops Green ATMs

‘Green’ technology and eco-friendly solutions are becoming more popular among small businesses, as they are cheaper, more easily managed and environmentally conscious. Edra Equipamentos, a Brazilian firm, is currently in the process of developing green ATM booths, which will be built from recycled materials and powered by solar panels. The company claims the ATMs are “at the forefront of modern, environmentally responsible design,” according to Many banks and businesses have already shown interest in the finished product.


The World’s Most Powerful Women

Brazilian President Dilma Rousseff

According to Forbes, in a world where women are increasingly taking their places among the movers and shakers planning policy and determining destiny, these are the most powerful of the lot.
In order from 1 to 5, the following women have made it to the top of the list of Forbes Most Powerful Women in the World:

1.    Angela Merkel: As the Chancellor of Germany Merkel makes decisions that will affect the almost 82 million German citizens, in addition to the influence she has on the European and world communities.

2.    Hillary Clinton: Successful American politician Clinton is the Secretary of State of the United States, and as such she helps form foreign policy which the US follows.

3.    Dilma Rousseff: The President of Brazil Dilma Rouseff leads this South American country which is populated with over 192 million people, the only Lusophone country in the Americas, and the world’s largest.

4.    Melinda Gates: As the co-chair of the Bill and Melinda Gates Foundation Melinda controls the “largest transparently operated private foundation” in the world, bestowing on her considerable power to “make a difference.” The foundation has already given away 28 billion dollars making a meaningful and significant difference in the world.

5.    Jill Abramson: On June 2, 2011 Ms. Abramson became the executive editor of the world’s most prestigious newspaper, The New York Times, bringing the most reliable and important news stories to readers all over the globe.