Business to Business Tug of war over Payments

I heard a programme about business to business payments on ABC Radio 702 this morning. In short, they’re too slow at the moment and that poses a real threat to economic recovery.

Deborah Cameron interviewed Damien Karmelich from Dun and Bradstreet who apparently keep a file on how quickly companies pay their bills. (to see the blog go to http://bit.ly/bVeP6p, unfortunately you won’t be able to hear this excellent segment as this is one of the few shows that the ABC don’t produce a podcast for).

This is not recent news, small business has been suffering since at least May 2009 and who are the worst culprits? I’m sure you will not be surprised to hear it is big business and government departments. Closely followed by small business who can’t pay their bills due to the above.

During the call in segment, small business people and in some cases their spouse or family member rang in with horror stories of how small firms such as plumbers were owed hundreds of thousands of dollars for work done. I know they are not exaggerating, I have a number of small business clients, one is owed over $600,000, much of it from councils and the bulk of the rest is owed by property developers.

Of course the consequence is that these businesses pay their creditors late and in many cases there is nothing either party can do. Even if the creditor was inclined to sue, you can’t get blood out of a stone and bankrupting a company is not only expensive it almost guarantees you will never get paid or if you do, you get your money in such small dribs and drabs it is useless.

Damien also pointed out that many of the businesses that go broke each year do so not because they can’t get work but because they can’t get paid.

My client points out that many businesses are in a bind. If you have a council as a regular client or a large property developer you can’t afford to stop working for them because they will easily find another company that will but when times return to normal, you probably won’t get any more work from them.

In the mean time you need to chase residential jobs just to pay the bills. But this is a different kind of work and a company that manages to break into the world of big business is not necessarily still able or capable of doing this type of work at a competitive rate. They have invested heavily in big equipment and while you don’t need it to clear a blocked toilet, you still have to pay the lease. The big businesses and sadly, the councils, know this and use it to their advantage.

While to the CFO of these organisations this is just a case of  “managing their cash flow” the toll it takes on small business and frankly, on the staff, the families and the small business owner, is disastrous.

Has anyone calculated the cost to the country of supporting employees who lose their job because a big organisation wants to keep their cash in their bank? What about the cost in human suffering and loss of capital due to the break up of families often directly attributable to the stress that cash flow problems cause the small business. Or of the loss of experienced small business entrepreneurs who between them employ over 49% of all private sector employment (http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1321.0Main+Features12001?OpenDocument .

If anyone tells you that Australia has escaped the worst of the GFC (global financial crisis) just tell them to go to any suburb and speak to the small business owners. When you hear a financial analyst tell you that Australia’s fortunes are tied to China, ask them how many small businesses sell products or services to China?

When a politician wants to know how the economy is doing tell them to forego their boardroom lunch at BHP or Rio Tinto and forget the banks (they forgot you years ago) and go to their local plumber, electrician or retail shop and talk to them.

If they did I think we would hear a lot less about how well Australia has fared since the beginning of the GFC.

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Do you remember when the blockbuster and now, cult movie; 2001: A Space Odyssey, came out in 1968? Maybe not, especially if you weren’t born or were very young, but those who do will tell you 2001 seemed so far away that they never really considered that one day they would be living there.

Well here we are in 2010 and even writing it, it somehow still looks futuristic.

I came across an interesting blog post today about a book written in 1972 titled: 2010: Living in the Future written by Geoffrey Hoyle (the son of the famous astronomer, Fred Hoyle, with whom he co-authored a number of books)

The post was by Daniel Sinker who teaches journalism at Columbia College Chicago. It’s interesting because he has recreated the book so readers can see what their parents and grandparents were told to expect about life today.

It is also interesting in an unintended way because of the juxtaposition of the content and the medium. The blog is on Tumblr, one of the 21^st century’s Web 2 phenomenon social media web sites.

A quick look at the way we live (according to our grandparents)

I’ve no argument with the fact that I am still making beds, it was a nice thought.

But I wonder what he was smoking when he wrote “Your home is very carefully planned”

Kids have been creating havoc at home since the year dot and he forgot to mention what drugs they (sorry, we) are feeding to the kids to make this particular prediction come true.

There are many other predictions that you will recognize today probably by another name, e.g. Vision Phone aka Skype / Internet / Intranet, which makes the book prophetic enough to be worth some consideration again. In fact enough people thought so to start up a Facebook group to find the writer (Geoffrey Hoyle) and ask him about his visions.  Maybe they wanted to know why he didn’t think of Facebook and invite them to be shareholders?

Your Chance to be a Fly on the Wall

I think you will find it interesting to read about yourself from the prospective of being able to listen in on someone postulating what you are going to be like today (in 2010) when you were a baby or possibly before you were born.

Even weirder, if you read the book back then or in the early ‘80s did you get a déjà vu feeling as you read about “you” in the future and do you now get a reverse déjà vu when you read it again?

My problem with the whole genre of “going back to the future” literature is that it tends to concentrate on the hardware i.e. what will we be using, the flying cars, computers, wrist phones paraphernalia of life but it never looks at the software, the morals, ethics, compassion and humanity aspects. The “How do we change or evolve as human beings” perspective.

The Decline of the West – Mark 1

I recently finished reading a great little history book called Medieval Cities by Henri Pirenne written in 1925. It describes the rise and fall of cities, mainly in Europe, but in doing so it really addresses the economic structure of the world economy from the period of the Roman Empire to the 14^th century.

It was an eye opener to read about the economic decline of the West which was all over by the beginning of the 5^th century and how that led to centuries of stagnation during which time the cities were practically emptied of dwellers other than people working in or for the church.

Most interesting to read was, how money lost its value because there was practically nothing to buy and in any case, people had lost faith in the state that backed the currency.

Pirenne talked about how the great land owners took to melting their gold coins down to create beautiful relics which they donated to the church to buy favors in heaven. You only had to read the news during the depths of the financial crisis and for many things haven’t changed much yet, to see that favors in heaven is once again looking more enticing than what’s ahead on earth for many of the disadvantaged or disassociated.

It was hard not to relate the situation described in the book to the economic problems we were facing at the time (the GFC was in full swing while I was reading it) and realize how similar some of the problems were to those our ancestors faced.

If the banking crisis had got worse instead of being held at the last hurdle by some swift and possibly temporary financial strategies, our own money system could have collapsed and I don’t believe I am being alarmist in saying that.

So, to end this post but not the topic, because I intend to return to it again either here or on my philosophy blog “Shadow in the Flame”, I would like to ask you what do you foresee in the next 50 or 100 years?

Not from a technological point of view but rather how do you feel man will evolve “sociologically” over the next 50 to 100 years?  Will all the problems we face today; economic, global warming, population and environmental, change us for the better or worse or not at all? Will we still be here in a hundred years?

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It’s a simple parable about an enterprising boy who starts a great little business at infant’s school.  I like the little blighter but he does make you think. This is the American Dream  (which is now the world’s dream)  but is it what we really want.

I am really keen to get your feedback so please leave a comment or send in a longer response. The details are at the bottom of the article.

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I think I had the easier side to argue; I put the negative case i.e. that America has Peaked and I think more people agreed with that proposition than the alternative although Stephen put together a very strong case and delivered it well.

I found a lot of good material during my research and if you are interested in world affairs including who’s hot and whose not and where the world is heading politically I think you will enjoy reading it. I will regularly post links to some of the stuff you can find on the Internet or provide references and a brief summary of books that I read.

One paper I highly recommend you should read can be downloaded free from the Lowy Institute. It is an excellent paper entitled “The End of the Vasco Da Gama Era” In it the author, Dr Coral Bell AO, sketches the probable future landscape of the society of states as it emerges from the twilight of US paramountcy. Bell argues that the world is in transition to a multipolar balance of six great powers: the United States, the European Union, China, India, Russia and Japan. You can get it here:

http://www.lowyinstitute.org/Publication.asp?pid=723

By the way according to Bell, the title reflects the thinking of Indian Scholars who have long regarded the voyages of the great navigator Vasco Da Gama along with those of Ferdinand Magellan and Christopher Columbus as the beginning of 500 years of ascendancy of the West over Asia.

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As I said in my opening, my task is to look at the development of philosophy in the East and the West over the last 2,500 years in approximately 30 minutes. That’s a minute a century.

Of course the topic was far too huge to do it justice but after 8 or 9 complete revisions I got it down to the allotted time (well it went just over 40 minutes) but question time went on for over two hours and even then the MC had to close the meeting or it would have gone on longer.

I don’t think that was entirely due to my speaking prowess although as you know the right audience makes a big difference and in many ways they contribute to the quality of the “performance”. And on that night I did feel we had a simpatico as my dad used to say.

But in all honesty I think the topic is of great interest to people these days. There is a feeling, one could almost say a hope that Eastern Philosophy can provide answers to some of the pressures we experience these days in our everyday life. And I believe it can.

Bye the way for all you who are screaming out “what’s this Eastern Philosophy, there’s no such thing”. I agree you cannot take the huge body of philosophical texts from all over the orient and lump them together under the title Eastern Philosophy. They are all so individual that that is a blatant misrepresentation. Of course they are not one homogenous body of work so it is silly to label them as though they were. But it is an easy label to fall in to the habit of using and I really mean the diverse philosophies from countries in the Orient as opposed to Europe and North America.

So where does Islamic philosophy fit in? Well from what I can see if someone is using the terms Eastern and Western Philosophy, they generally lump the mediaeval Islamic texts in with the Oriental philosophies. I’m not really sure about modern Islamic philosophy. In fact, I haven’t read any modern Islamic Philosophy or any commentaries on it that didn’t seem to be mainly religious argument rather than pure philosophy. Which funnily enough is a criticism often made about Chinese and Indian texts.

But who is making the criticism? More often than not it will be a western reader, be it an amateur or professional philosopher, but whatever the case their “criticism” is often misplaced I feel. Sure a lot of the great Chinese and Indian Philosophers were religious but from about 800 AD most philosophers in the west were Christian of one type or another and that certainly doesn’t mean that their works are not great philosophy.

The thing that makes me smile is that western philosophers regularly refer to Eastern Philosophy as Mysticism or Religion rather than as philosophy but it is the great mono theistic religions that promise a better life in the next world whereas in China Confucianism and Taoism seem to be happy to teach a philosophy that helps you to live in peace and contentment in this life.

So which one is Mysticism or religious-philosophy and does it really matter?

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