A Guest Blog by Arthur Kaufman, Independent Writer and Speaker
Let me start by saying I am eminently unqualified to write what you’re about to read. I have no qualifications in finance, banking or the credit industry, nor any experience in running a business of any kind. Even so, I am entitled to offer my thoughts or should I say my wonder on the subject of credit, especially of a commercial and a personal nature, which together in the UK alone has reached the multi-trillion mark and which obviously worries many economists despite their lack of consistency in most other aspects of lending and borrowing money.
Negative Cash Flow a Thing of the Past
My wonder about such matters is as follows: If say, by any chance however remote, every business and person who had outstanding debts, whether for money owed on products, labor, loans or other commitments too numerous to mention, suddenly were able to settle all they owed and actually tried to do so, what would be the result? Would it be good, bad, unpredictable or totally chaotic with no solution in sight?
Given that it would take a little time for all repayment transactions to go through (including penalties in cases of early settlement), the advantages of modern technology, where information can move with the speed of light thereby ensuring that on the ‘big’ day in question, everybody and every legally defined body would be free of debt, in line with the rare few who always pay their bills as soon as received.
For those worried over too much outstanding debt and often pressured (or chased) to honor what is long overdue, I suppose there would be instant relief. For those firms or institutions who provide loans and credit, presumably they would be overwhelmed with more money than what they knew what to do with, even though the lack of cash flow would (at least in theory) be a thing of the past.
If you’ve read this far, you will be aware that a state of ‘No Owe’ raises other problems. Is having credit and its level increasing at what seems an unsustainable rate preferable to getting rid of it altogether, even if only temporarily? In attempting to do so, would most businesses suffer beyond repair or, instead, then be able to have a good look at themselves, with a once in a lifetime opportunity of making a fresh start by allowing the best in their brain reserves to have a hard think about avoiding what could be another very black financial hole.
The system underlying this has collapsed under its own mass because of mismanagement, greed, or a seemingly uncontrollable momentum of its own, which occurred in the not so distant past.
Modern customers care about the environment, which means you have to. Electronic billing saves paper and energy used in printing and posting of invoices, statements and follow up letters. Customers appreciate this e-billing feature, and with the money you’re saving, you should too!