Archive for the ‘Banks’ Category

Is Business-to-Business Credit finished?

February 25, 2009

Up to early 2009 the generally accepted method of conducting a business-to-business transaction was for the seller to allow the purchaser 30 days or more of credit to pay the account.

Now the question that is being asked by the seller is “Can I trust the purchaser to pay me?”

Up to now most of these credit accounts have been funded by the use of overdrafts from the banks. However, with the drying up of these funds a business needs to look very carefully at extending credit to anyone. When you look at the number of very large organisations that have folded in the last year with enormous debts, not much has been reported about the creditors to these failures. How many of these have also gone under?

By giving credit to the buyer, the seller is taking all the risk. The seller is assuming, no – hoping, that they will be getting paid. If they don’t get paid, then they fail. This is a disaster not of their making.

How can they change it? The most obvious answer is to remove credit facilities and require the buyer to pay for the service or product before delivery or at delivery. This is how business used to be transacted in the past.

As we look at our increasing overdrafts and wonder when we are going to get some money from our debtors it makes sense that we as a business stop offering credit. After all, isn’t the present world economic problems caused by excessive use of credit?

What do you think? Is business-to-business credit finished?

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World of greed

June 19, 2006

We live in a world of greed, where the rich get richer and everyone else is treated as a slave. Is this how we are meant to live and interact with each other? It is my view that this is not the case.

The human race initially consisted of family groups, moving to tribal and eventually a village society. Once the collection of people became too large for everyone to know each other, at least by sight, an opportunity arose for human predators to become active. In today’s society where neighbour does not know neighbour, these predators flourish at society’s expense.

Some of these predators are real people such as con men, tricksters and fraudsters. They operate by manipulating people’s trust and general greed and stupidity. It has been shown to be impossible to protect people against themselves. Continual moving from victim to victim is the hallmark of this type of predator.

The most common type of predator is the one that continually manipulates society to ensure that it can predate upon society without getting tarred and feathered and removed from society. We all know who these predators are, the Government, banks, big business and all the so-called quasi government organizations that virtually control society without any mandate from society even to exist.

Banks are a case in point. Originally set up as a safe repository of the nations cash, they are effectively trying to remove cash completely from our society. The increased reliance upon electronic financial transactions and the fact that you are actually charged for depositing or withdrawing the legal currency of the land must indicate that cash has a finite life within society. The question that must be asked is “Why should cash disappear?” The major reason appears to be the ability to maintain control over society as a whole. The IRD has maintained that the black untaxed economy has been growing enormously in the last ten years or so. This black economy survives by the use of untraceable cash. Therefore, the theory goes that if there is no cash, all financial transactions must take place through a bank, the black economy will disappear, and therefore the IRD will increase the overall tax take and personal tax rates will fall. This is a load of hogwash, as a report commissioned by the IRD found that reducing monetary control and tax rates increased the overall tax take.

The present tax laws are recognised as being extremely convoluted, ambiguous and draconian in their application. However, our elected government seems to have no will (or ability) to scrap all the present legislation and come up with a very simple system that applies to everyone equally. Such a system could be based on a 1% transaction tax for all amounts transferred into and out of a bank account. This would also include the banks and businesses that use the Reserve Bank and other facilities to balance their books on a daily basis. This amounts to multi-millions of dollars every day, and yet financial transactions such of these are exempt from any form of taxation. Individual accounts are already monitored to pay the taxman, so why not the corporate’s?