Author: Pete Loughlin

I’m not really a linguist. I’ve tried to develop fluency in French and made an attempt at German but the only language in which I ever developed any competence, apart from English, was a form of double speak called Management Speak. I haven’t used it for a while but amongst a group of management consultants I can soon pick it up again. Native speakers claim that it is merely a specialist set of terms, jargon if you like, that distills complex business issues into straightforward language and imparts a more professional tone. Why talk about “cutting out the middle man” when you can simply disintermediate? It’s not always best to say what you really mean. It’s more professional to say “We value your suggestion but I’m afraid this is non-negotiable on this occasion” rather than simply “f*** off”? But there’s another language, a dialect of management speak, that is way more complex and it’s almost impenetrable to most of us: Banker Speak. Here’s an example from David Gustin, CFA from Global Business Intelligence, responding on linkedin to my article on the UK Government's announcement on supply chain finance. I’ve exchanged views with David a few times and he has a highly expert voice on this subject. He explains why suppliers get to pay 20%-30% for credit:

It's good news that the UK government has recognized the opportunity to utilize supply chain finance as a means of freeing up the availability of credit for small business. Allowing small businesses to borrow money to fund early payment of their outstanding invoices on credit terms that would normally only be offered to their big and relatively powerful customers isn't just common sense, it could provide a valuable boost to the UK economy. Other governments take note. But before anyone gets too excited, take a little time to consider what is really going on. It looks great on the surface but lurking beneath is a very ugly reality.

A unique supply chain finance solution from OB10 improves companies’ working capital and cash flow

OB10, the e-Invoicing network that handles £90bn of payments each year, has launched OB10 Express Payments, a unique supply chain finance service that allows organisations to receive payment on approved invoices within three days. The service supports the agreement announced this week between Prime Minister David Cameron and large UK organisations to consider or continue helping their suppliers’ cash flow through supply chain finance.

Ever since I read Hell’s Angels by Hunter S Thompson, I’ve always found the image of bikers compellingly attractive. And so I’ve not spared any cash when it comes to getting my own image right. When I’m wearing my black Rukka Merlin jacket with matching water-proof Gore-Tex, armored leather jeans and my Schuberth C3 Pro helmet with built in antennae, even though I say it myself, I look the business. All I need now is a bike. I remember from my teenage years, as I suspect will many others, the sad soul with the helmet and no bike. Pursuing the biker dream with not enough money for the full package, he missed the point. Having a helmet doesn’t make you a little bit of a biker. It makes you a little bit of an idiot. Making only a partial investment isn’t always an incremental step towards a complete solution. Often it’s a waste of money. And that’s what e-procurement is if it’s implemented in isolation – a complete waste of money.

Ask a CFO why he shouldn't pay suppliers early in return for lower prices and he or she is quite likely to say "It's fine occasionally but generally it just gives a one-off hit". I had this exact conversation with a a CFO of a large international organization recently and, not being an accountant, I chose to hold back, go away and lick my wounds and contemplate why his position was both expert and intuitively wrong.