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Perception can be changed by the facts – a blog by Philip King FCICM

22 June 2017

I spent two days in London this week, when the temperature was at its hottest, and had a couple of particularly interesting meetings on Tuesday.

My first was with the Business Information Providers Association (BIPA) to share insights, news and views of latest events impacting the credit reference agencies (CRAs) and their customers. BIPA’s members comprise the seven principle agencies, and aims to further improve the dialogue and understanding between the agencies and the business community with particular reference to how data is held and used to support better business decisions and responsible lending.

We discussed a number of important issues, including GDPR, the new Duty to Report Regulations, and opening up access to small business credit data (a measure introduced through the Small Business, Enterprise & Employment Act 2015 and coming into effect towards the end of this year). We also talked about the perception small businesses have of CRAs.

I talk to many small businesses and shared a range of views they regularly express to me. Some see the value in checking the credit worthiness of a company before they supply goods or services; others do not, or are unaware of the benefits of doing so. Some recognise the value of an agency report in helping them to obtain credit, and again others don’t and bemoan the fact that an (inevitably considered unfair) adverse rating limits their ability to obtain finance from banks or credit from suppliers.

Later on the same day, I met with various representatives of BEIS in two separate meetings where we talked about the Duty to Report Regulations and the Prompt Payment Code. We discussed the impact of the Code and the divergence of opinions surrounding it.

Some perceive the PPC as a complete waste of time, with no teeth and achieving very little. Others are more positive in recognising its value, having reached almost 2,000 signatories. They understand the role it is playing in obtaining immediate payment of invoices that have failed to get through a buyer’s system, allowing for businesses to be educated in how to obtain payment (and make payment) more effectively, and informing businesses about weaknesses in their systems that have been subsequently changed to everyone’s benefit. Indeed the involvement of the CICM in assisting and supporting businesses is warmly welcomed, almost without exception.

In both the meetings we touched on what action might be taken to influence negative perceptions. Our view of most things is tempered by our personal experience, and that’s why opinions, feelings and beliefs are so diverse. What I learned this week, or perhaps have always known, is that for a perception to change, we need to be better at communicating the facts. This is certainly true of the Prompt Payment Code, and is a sentiment no doubt shared by my colleagues at BIPA.

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