Settling commercial disputes online
Proposals to allow SMEs to settle commercial disputes worth less than £25,000 online have been submitted by the Judicial Office.
The Civil Courts Structure Review interim report from Lord Justice Briggs proposes the launch of an ‘online court’ to settle disputes up to a value of £25,000 and says it will give litigants more cost effective access to justice.
LHS Solicitors head of business legal services Merlie Calvert welcomed the proposals, saying: “The current courts system has got to change. It isn't litigant friendly and most businesses would agree that resolving disagreements today is too slow and expensive. Businesses should be entitled to legal services which are accessible in the same way that almost all consumer goods are. That is: digitally, cost-effectively and quickly.
“Reinvention of legal services, particularly for small and medium sized businesses is long overdue. It’s great that others agree with us and that businesses will soon have more choices and better prospects of fair and cost-effective treatment when it comes to resolving disputes in court."
SMEs must watch out for new accounting rules
New accounting rules introduced in January 2016 could see hundreds of companies inadvertently breach their banking loan covenant.
The warning comes from independent law firm berg, which reminds SMEs that, from this month, companies will be expected to show derivative financial instruments on balance sheets, under FRS102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
berg is advising businesses that they should obtain an overview of their loan documentation as soon as possible and discuss it with financial and legal advisers, rather than waiting for the deadline for filing statutory accounts.
Alison Loveday, Chief Executive at berg, said: “In our experience most business owners are not familiar with the detailed contents of their bank loan and covenants, which are often up to 40 pages long and drafted from the perspective of the banks. This has already had an impact in the scandal surrounding RBS’ Global Restructuring Group and the business support units of other banks, where we saw banks engineer breaches to push businesses into default. In this instance, however, the banks will not need to do this as the new accounting standard may result in businesses inadvertently breaching their covenants.”
Alison Loveday recommends that, while she welcomes the new rules which aid transparency, the impact that FRS 102 will have on many companies’ balance sheets should not be underestimated.
Be disruptive or be disrupted, SMEs warned
There are 1.56m jobs in the digital tech economy, covering all jobs within the digital tech industries and digital tech jobs in traditional industries. According to Tech Nation’s latest report, this outpaces the rest of the economy, as jobs in these sectors grew by 11.2% in 2011-14, 2.8 times faster than the rest of the workforce.
Cisco UK and Ireland chief executive Phil Smith said that one main thing to take away from the report is that UK businesses must learn to digitally disrupt or risk being disrupted. With 41% of digital tech economy jobs now exist in industries that have previously been seen as non-digital industries, which demonstrates how digital technology is reshaping markets at an unrelenting pace.
He said: “Indeed, our own research with the International Institute of Management Development highlighted how 40% of incumbent companies will be digitally disrupted over the next five years unless proactive steps are taken; we’re now seeing UK companies take action.
“It really is fantastic to see the UK digital economy growing so strongly, and starting to create a sustainable and positive impact for every area of society as well as driving productivity and a stronger economy.”
SMEs must work harder to make employees feel valued
Around 61% of UK workers believe they do not receive enough perks from their employers.
The research from facilities maintenance specialist Direct365 tallies with a 2015 report from the Institute of Leadership and Management which suggested that one in three people plan to leave their jobs in 2016. More specifically, 17% of the 2,000 people surveyed said they will move on because they feel underappreciated in their current roles.
Looking at both sets of results, it’s clear that SMEs should be doing more to keep their workforce happy and engaged.
Direct365 brand development manager Emma Gilroy said: “A lot of companies suffer from ostrich syndrome when it comes to employee benefits - they think they are offering perks that their staff genuinely want, but as our survey results show, the reality is very different.
“If employers spent more time focussing on rewarding their staff and showing gratitude, they would not only see increased productivity, reduced absenteeism and improved customer service (happy staff always come across more positively to customers), but more importantly they would drastically reduce the amount of staff looking to move on.”
50% of the workforce in 5 years will be millennials - you might want to consider their values. https://t.co/oJVoZxrORK— Mark Stretton (@mastretton) February 11, 2016
High street growth masks shift towards e-commerce
The high street has rebounded strongly at the start of 2016 after an uneven festive period for many retailers.
According to the British Retail Consortium-KPMG retail sales monitor, total retail revenues across all product categories jumped 3.3% year-on-year in January. Online sales of non-food products grew 14.9% in January versus a year earlier, when they had grown by 11.7%. The non-food online penetration rate was 21.5%; up 1.4% from January 2015.
Commenting on these results, Whittingham Riddell tax partner Duncan Montgomery claimed that SMEs should realise that the overall growth of 3.3% is masking a shift towards online selling.
He said: “Refreshing online offerings and making sure that customers have the best experience is just as key as refreshing and bringing store layouts up to date. It is crucial to have a good quality site; just as you would want a retail outlet to look good and have the right flow, so must the online offering.”
Montgomery advised SMEs to offer online ordering and in-store collection. It is crucial for retail SMEs to use as many of the ideas in the market place as they can to keep market share and avoid the online offering becoming stale.