A new funding option is in the future for small- and medium-sized
enterprises (SMEs) in the United Kingdom. New laws put forward by Small
Business Minister Kelly Tolhurst this week will "make it easier for
small businesses to access invoice financing," according to a release
from the government. This will in turn provide a one-billion-pound boost
to the economy.
"The U.K.'s 5.7 million small businesses are the
backbone of our economy and central to our modern Industrial Strategy,
with more than 1,000 starting up every day," said Tolhurst in the
release.
Some smaller businesses accept contracts from larger
firms with language stating invoice finance is prevented, but SMEs and
suppliers agree to terms because of a weak negotiating position. The new
proposed laws will void such restrictions in contracts entered into
after the end of the year, with some exceptions.
"These new laws
will give small businesses more access to the finance they need to
succeed and will help ensure they have a level playing field from which
to set fair contracts with the businesses they supply," concluded the
small business minister.
-Michael Miller, managing editor
Job Growth Dwindles Across Businesses of All Sizes
No matter the size of the business, job growth spiraled in August across the U.S., where hiring plummeted by roughly 54,000 jobs compared to the prior month. According to a Sept. 10 report by payroll service provider ADP, only 163,000 jobs were added in August, falling well below the 206,000 monthly average and the 217,000 added in July.
Despite describing last month’s findings as “sluggish,” Ahu Yildirmaz, ADP Research Institute’s vice president and co-head, said in a statement that the business community remains strong. Hiring declined throughout businesses of all sizes; however, the ADP report states job growth in small- to medium-sized businesses (SMBs) was worse off, with less than half of its July numbers—after adding 59,000 jobs in July, SMBs added a bleak 21,000 jobs in August.
Moody’s Chief Economist Mark Zandi told CNBC the trade war is impacting larger companies because “they’re starting to become more cautious in their hiring.”
“The job market is hot. Employers are aggressively competing to hold onto their existing workers and to find new ones,” Zandi said in the article. “Small businesses are struggling the most in this competition, as they increasingly can’t fill open positions.”
Jobs in the service sector exceeded those in manufacturing, the former growing to 139,000 jobs in August, CNBC reported. Professional and business services hit a stride with 35,000 jobs, followed by education and health services, leisure and hospitality, and then trade, transportation and utilities. Meanwhile, manufacturing came in at 19,000 new jobs, with 5,000 in the construction sector.
—Andrew Michaels, editorial associate
Despite describing last month’s findings as “sluggish,” Ahu Yildirmaz, ADP Research Institute’s vice president and co-head, said in a statement that the business community remains strong. Hiring declined throughout businesses of all sizes; however, the ADP report states job growth in small- to medium-sized businesses (SMBs) was worse off, with less than half of its July numbers—after adding 59,000 jobs in July, SMBs added a bleak 21,000 jobs in August.
Moody’s Chief Economist Mark Zandi told CNBC the trade war is impacting larger companies because “they’re starting to become more cautious in their hiring.”
“The job market is hot. Employers are aggressively competing to hold onto their existing workers and to find new ones,” Zandi said in the article. “Small businesses are struggling the most in this competition, as they increasingly can’t fill open positions.”
Jobs in the service sector exceeded those in manufacturing, the former growing to 139,000 jobs in August, CNBC reported. Professional and business services hit a stride with 35,000 jobs, followed by education and health services, leisure and hospitality, and then trade, transportation and utilities. Meanwhile, manufacturing came in at 19,000 new jobs, with 5,000 in the construction sector.
—Andrew Michaels, editorial associate
E-Invoicing Ushers Businesses Toward More Tech Implementation
Knowing when and where to start implementing new technology
is tricky for any business. Costs and complications alone often steer
businesses away from the latest advancements, but some experts believe electronic
invoicing adoption is one of the best stepping stones for a gradual transition
into 21st century technology.
According to professional services firm EY and their Worldwide Electronic Invoicing Survey 2018, electronic invoicing, also known as e-invoicing, digitizes invoicing documentation between a supplier and a buyer. Unlike paper invoicing, which costs more than $8 per page, e-invoices widdle the price down to $0.35. The survey broke down the quantitative and qualitative advantages to e-invoicing, the former including improved productivity and cash flow.
“Together with electronic storage, e-invoicing can help to serve the corporate responsibility agenda, by eliminating the need for paper and reducing the carbon footprint,” the survey states. “These aspects can have a positive impact on the company’s image and relationships with its customers.”
In France, for example, for every 6,000 paper invoices processed, those using the technology will complete roughly 90,000 e-invoices. While paper invoices can take up to two weeks to complete, e-invoices are finished within three days, with a rate of 80% dematerialization.
From a qualitative perspective, e-invoicing limits risks of error and gives employees the opportunity to spend time on more demanding tasks. The costs and time to implement might be risky for businesses, but there are far more advantages in the long run.
—Andrew Michaels, editorial associate
According to professional services firm EY and their Worldwide Electronic Invoicing Survey 2018, electronic invoicing, also known as e-invoicing, digitizes invoicing documentation between a supplier and a buyer. Unlike paper invoicing, which costs more than $8 per page, e-invoices widdle the price down to $0.35. The survey broke down the quantitative and qualitative advantages to e-invoicing, the former including improved productivity and cash flow.
“Together with electronic storage, e-invoicing can help to serve the corporate responsibility agenda, by eliminating the need for paper and reducing the carbon footprint,” the survey states. “These aspects can have a positive impact on the company’s image and relationships with its customers.”
In France, for example, for every 6,000 paper invoices processed, those using the technology will complete roughly 90,000 e-invoices. While paper invoices can take up to two weeks to complete, e-invoices are finished within three days, with a rate of 80% dematerialization.
From a qualitative perspective, e-invoicing limits risks of error and gives employees the opportunity to spend time on more demanding tasks. The costs and time to implement might be risky for businesses, but there are far more advantages in the long run.
—Andrew Michaels, editorial associate
End of Summer Brings CMI Out of Decline
NACM’s Credit Managers’ Index (CMI) turned around as the summer comes to a close, showing positive readings for the first time in two months. These higher readings show signs of stability for the near future, though the stability may not last with the threat of inflation and on-going trade wars.
The combined CMI score for August went up by 0.3 points, with the most increase seen in the favorable sectors. The unfavorables, however, began to approach a score less than 50—falling dangerously close to contraction territory.
Much like last month’s reading, this month saw the most positive readings in the manufacturing sector. Credit managers reported an increase in the amount of credit extended and also sales, along with more credit applications and dollar collections.
The service sector only gained a tenth of a point this month, with dollar collections and new credit applications the only factors that saw an increase from July. Sales saw the least improvement and extending credit did not see much improvement either.
For the full report, visit nacm.org. Be sure to participate in the September CMI when the survey opens on Monday, Sept. 10. The survey will close on Friday, Sept. 14, so stay up to date by visiting the NACM website for more information.
—Christie Citranglo, editorial associate
The combined CMI score for August went up by 0.3 points, with the most increase seen in the favorable sectors. The unfavorables, however, began to approach a score less than 50—falling dangerously close to contraction territory.
Much like last month’s reading, this month saw the most positive readings in the manufacturing sector. Credit managers reported an increase in the amount of credit extended and also sales, along with more credit applications and dollar collections.
The service sector only gained a tenth of a point this month, with dollar collections and new credit applications the only factors that saw an increase from July. Sales saw the least improvement and extending credit did not see much improvement either.
For the full report, visit nacm.org. Be sure to participate in the September CMI when the survey opens on Monday, Sept. 10. The survey will close on Friday, Sept. 14, so stay up to date by visiting the NACM website for more information.
—Christie Citranglo, editorial associate
Be Extra Cautious When Lending to Micro-SMBs
When credit managers are extending lines of credit, the size
of their customers’ business is a factor to weigh in the decision-making
process. Just because a business is small doesn’t mean it will never get
credit, but both parties have to remain more alert. On Aug. 27, global fintech
company Tide explained how micro-SMBs (small- to medium-sized business), those
typically having less than 10 employees, exhibit a few specific risks in
connection to their size.
As small businesses are getting off the ground, Tide CEO Oliver Prill told PYMNTS, there’s always a chance they won’t make it. There is great probability that costs will run high in the business’ early stages, leaving potential creditors uncertain about the investment. Although Tide is not a direct lender, the company is a data provider that helps manage credit risk for such businesses.
Unfortunately, Prill continued, smaller businesses are also more susceptible to financial crimes, such as money laundering, which again deters credit managers. According to an article by Influencive, micro-SMBs are prime targets because “many startups lack the resources to recover once their business operations have been interrupted and/or their brand’s reputation has been compromised.”
“For this reason, it is of paramount importance for small businesses to consult with cybersecurity experts and utilize IT services that ensure the security of their networks,” Influencive states. “Also, by deploying an IT infrastructure, small business [should] not only streamline their business operations, but also become competent enough to fight off the competition and survive hostile markets.”
—Andrew Michaels, editorial associate
As small businesses are getting off the ground, Tide CEO Oliver Prill told PYMNTS, there’s always a chance they won’t make it. There is great probability that costs will run high in the business’ early stages, leaving potential creditors uncertain about the investment. Although Tide is not a direct lender, the company is a data provider that helps manage credit risk for such businesses.
Unfortunately, Prill continued, smaller businesses are also more susceptible to financial crimes, such as money laundering, which again deters credit managers. According to an article by Influencive, micro-SMBs are prime targets because “many startups lack the resources to recover once their business operations have been interrupted and/or their brand’s reputation has been compromised.”
“For this reason, it is of paramount importance for small businesses to consult with cybersecurity experts and utilize IT services that ensure the security of their networks,” Influencive states. “Also, by deploying an IT infrastructure, small business [should] not only streamline their business operations, but also become competent enough to fight off the competition and survive hostile markets.”
—Andrew Michaels, editorial associate
China and US Enter Second Day of Trade Talks
China and the U.S. have entered the second day of trade talks with hopes to smooth over an uncertainty left behind the potential tariffs on imported goods.
As of Aug. 23, both economies have proposed tariffs on imported goods worth about $16 billion. This will make the total value of Chinese goods affected by the Trump administration $100 billion, from steel to soybeans. It is unlikely both powers will make any “meaningful progress” during trade discussions, according to a recent article in Bloomberg.
Many analysts predict the Trump administration will not lighten up in these trade talks, given how the administration has not softened any hard lines toward China in the recent past. According to Bloomberg, the president also widened the gap in the trade wars when he continued to spread rhetoric about China using “currency manipulation,” which has historically been a point of contention between the U.S. and China. The trade team is also putting more pressure on Beijing, as stated in the same Bloomberg piece.
U.S. officials will be meeting with delegations from the E.U. and Japan in Washington, D.C., Aug. 24 to further discuss Chinese trade.
—Christie Citranglo, editorial associate
As of Aug. 23, both economies have proposed tariffs on imported goods worth about $16 billion. This will make the total value of Chinese goods affected by the Trump administration $100 billion, from steel to soybeans. It is unlikely both powers will make any “meaningful progress” during trade discussions, according to a recent article in Bloomberg.
Many analysts predict the Trump administration will not lighten up in these trade talks, given how the administration has not softened any hard lines toward China in the recent past. According to Bloomberg, the president also widened the gap in the trade wars when he continued to spread rhetoric about China using “currency manipulation,” which has historically been a point of contention between the U.S. and China. The trade team is also putting more pressure on Beijing, as stated in the same Bloomberg piece.
U.S. officials will be meeting with delegations from the E.U. and Japan in Washington, D.C., Aug. 24 to further discuss Chinese trade.
—Christie Citranglo, editorial associate
Simulation Tech Enhances Decision-Making Process for Infrastructure Projects
In some way, shape or form, artificial intelligence (AI) is making a
name for itself in the business community. The construction industry is
no exception as recently seen in the United Kingdom, where a $4.5
million investment will fund a software company’s latest technological
endeavor to create real-world simulations of infrastructure projects.
Startup software company SenSat secured the funding from three investors earlier this month, TechCrunch reported. SenSat’s equipment uses drone imagery and spatial data to simulate a location, said CEO James Dean, who also told TechCrunch that the technology gets a better image via drone compared to satellites, which are typically much further away. The images are then infused with sets of data, giving computers the ability to determine the best course of action regarding the project’s design.
This concept is known as “machine learning,” meaning AI can improve itself over time without human intervention.
“On a technical level, it allows us to build simulated realities for medium to small physical areas, which we have known variables for,” Dean said in the article. “This means we can check and quantify our results against the real world, helping us build a foundation that can scale in size and complexity.”
While the traditional approach may cost more time and money, Dean noted that the SenSat tech is able to assess thousands of infrastructure design options in minutes, not only saving millions of dollars but also significantly improving the decision-making process.
According to a Jones Lang LaSalle, Inc. report, more and more venture capitalists are investing in global construction technology, with startups receiving more than $1 billion in the first half of 2018. Investment in the U.S. alone is about 30% higher than all of 2017.
—Andrew Michaels, editorial associate
Startup software company SenSat secured the funding from three investors earlier this month, TechCrunch reported. SenSat’s equipment uses drone imagery and spatial data to simulate a location, said CEO James Dean, who also told TechCrunch that the technology gets a better image via drone compared to satellites, which are typically much further away. The images are then infused with sets of data, giving computers the ability to determine the best course of action regarding the project’s design.
This concept is known as “machine learning,” meaning AI can improve itself over time without human intervention.
“On a technical level, it allows us to build simulated realities for medium to small physical areas, which we have known variables for,” Dean said in the article. “This means we can check and quantify our results against the real world, helping us build a foundation that can scale in size and complexity.”
While the traditional approach may cost more time and money, Dean noted that the SenSat tech is able to assess thousands of infrastructure design options in minutes, not only saving millions of dollars but also significantly improving the decision-making process.
According to a Jones Lang LaSalle, Inc. report, more and more venture capitalists are investing in global construction technology, with startups receiving more than $1 billion in the first half of 2018. Investment in the U.S. alone is about 30% higher than all of 2017.
—Andrew Michaels, editorial associate
‘Good Hires’ Are Hard to Find in Canadian IT Departments
A company is only as good as its employees, and if they
don’t have the proper skills to do their job, business becomes much more
complicated. According to new research, a vast majority of Canadian corporate
hiring managers in the technology sector said they are having trouble making
“the right hire,” specifically finding employees who have the skillset required
for the position.
During an online survey by job search service Robert Half Technology, 270 senior managers in Canada shared their thoughts on hiring for their respective IT departments, 93% admitting to making a bad hire. The top three reasons for bad hires, ranked most to least common, included unsuitable corporate culture fit, inadequate skills and interpersonal issues. Hiring managers said the hardest part of the job interview was evaluating candidates’ technical skills.
“Not only do they cost organizations time and money, inadequate hires also impact overall productivity and morale, especially if the rest of the team is picking up the slack,” Robert Half Technology District Director Deborah Bottineau said in the study. “Strong candidates are easier to identify when you have a clear understanding of your organization’s values and needs.”
Hiring managers recommended recruiters be crystal clear about the open position by providing potential hires with as much information about the job as possible. In addition to conducting a technical assessment to better understand the individual’s capabilities, they also suggested getting other departments involved in the hiring process and even taking the employee on a trial run before making the hire official.
NACM Economist Chris Kuehl, Ph.D., said many industries are in a tough spot in regards to hiring because a lot of available workers aren’t equipped with the necessary job skills.
“The bulk of hiring now has been some form of poaching, where companies are recruiting from other companies,” Kuehl said. “There are also more people electing to just quit their current job in search for something new. The overall sense of the situation is stability.”
—Andrew Michaels, editorial associate
During an online survey by job search service Robert Half Technology, 270 senior managers in Canada shared their thoughts on hiring for their respective IT departments, 93% admitting to making a bad hire. The top three reasons for bad hires, ranked most to least common, included unsuitable corporate culture fit, inadequate skills and interpersonal issues. Hiring managers said the hardest part of the job interview was evaluating candidates’ technical skills.
“Not only do they cost organizations time and money, inadequate hires also impact overall productivity and morale, especially if the rest of the team is picking up the slack,” Robert Half Technology District Director Deborah Bottineau said in the study. “Strong candidates are easier to identify when you have a clear understanding of your organization’s values and needs.”
Hiring managers recommended recruiters be crystal clear about the open position by providing potential hires with as much information about the job as possible. In addition to conducting a technical assessment to better understand the individual’s capabilities, they also suggested getting other departments involved in the hiring process and even taking the employee on a trial run before making the hire official.
NACM Economist Chris Kuehl, Ph.D., said many industries are in a tough spot in regards to hiring because a lot of available workers aren’t equipped with the necessary job skills.
“The bulk of hiring now has been some form of poaching, where companies are recruiting from other companies,” Kuehl said. “There are also more people electing to just quit their current job in search for something new. The overall sense of the situation is stability.”
—Andrew Michaels, editorial associate
Late Payments Bring Summertime Blues to UK
Just as accountants experience a busy time of year during tax
season, small- to medium-sized enterprise (SME) credit managers in the United
Kingdom are finding their summers cut short to spend more time hunting down
late payments. In fact, 60% of U.K. SMBs are exchanging summer holidays for
more workdays dedicated to the task, according to Online Payments Company
GoCardless.
“They will only typically pay at the end of the month or on the 15th of the month, and they will not typically pay invoices early to account for their internal processes,” a 2018 respondent said. “As [with] anywhere, you always end up with some customers that have cashflow issues."
—Andrew Michaels, editorial associate
On Aug. 14, Global
Banking & Finance Review published an article about a recent GoCardless
survey, which found that late payments increase substantially during the summer
months for two-thirds of SME owners. While 20% of respondents spend three
working days dedicated to late payments, 10% said they spend nine days.
“SMEs are the lifeblood of the U.K. economy and it’s not
right for them to be denying themselves valuable time to recharge their
batteries just to chase late payments,” Josh Sasto, head of partnerships at
GoCardless, said in the article. “On-time payment is a right, not a privilege.”
Furthermore, 57% of respondents who do take vacation said
they will spend some of that time off addressing their customers’ late
payments.
FCIB’s International Credit and Collections survey of the
United Kingdom told a different story. According to July 2017 results, more
than half of respondents said there was no change in payment delays, with
nearly a quarter of respondents reporting no payment delays. Only 16% said
payment delays were increasing, but that number dropped to 9% in the April 2018
survey.
“They will only typically pay at the end of the month or on the 15th of the month, and they will not typically pay invoices early to account for their internal processes,” a 2018 respondent said. “As [with] anywhere, you always end up with some customers that have cashflow issues."
—Andrew Michaels, editorial associate
Small Business Optimism Reaches New High During July
Small businesses can breathe a sigh of relief moving forward as this past month saw a rise in expansion and higher nominal sales, according to the National Federation of Independent Business’ (NFIB) July Small Business Optimism Index. The index reached a near-record high of 107.9, just one-tenth of a point shy of the highest record ever recorded, which was in July 1983.
This month’s survey also set a record for owners reporting job creation plans and for owners reporting job openings. About 23% of owners anticipate having job openings in the near future, which is three points higher than last month’s survey. Conversely, 37% of owners also reported having job openings they could not fill, seeing a one-point increase from last month.
The survey also predicts expansion will continue, remaining a priority for small businesses. Expansion seems to be more possible with 8% of survey respondents reporting higher nominal sales in the past three months compared to the three months previous. Similarly, 35% of business owners are expecting better business conditions in the upcoming months, moving up two points in total since June.
“Small business owners are leading this economy and expressing optimism rivaling the highest levels in history,” said NFIB President and CEO Juanita Duggan in a press release. “Expansion continues to be a priority for small businesses who show no signs of slowing as they anticipate more sales and better business conditions.”
—Christie Citranglo, editorial associate
This month’s survey also set a record for owners reporting job creation plans and for owners reporting job openings. About 23% of owners anticipate having job openings in the near future, which is three points higher than last month’s survey. Conversely, 37% of owners also reported having job openings they could not fill, seeing a one-point increase from last month.
The survey also predicts expansion will continue, remaining a priority for small businesses. Expansion seems to be more possible with 8% of survey respondents reporting higher nominal sales in the past three months compared to the three months previous. Similarly, 35% of business owners are expecting better business conditions in the upcoming months, moving up two points in total since June.
“Small business owners are leading this economy and expressing optimism rivaling the highest levels in history,” said NFIB President and CEO Juanita Duggan in a press release. “Expansion continues to be a priority for small businesses who show no signs of slowing as they anticipate more sales and better business conditions.”
—Christie Citranglo, editorial associate
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