There are a handful of blog posts around that add little to the collective wisdom about UK plc's prospects for the year ahead. (ICAEW chief executive Michael Izza and the normally sparky Jeremy Newman of BDO are among them - Richard Murphy is more interesting). I'll hope this one doesn't fall into the same trap.

It seems to me that at the heart of the debate about how to unlock credit markets is a crucial yet neglected factor: the quality and timeliness of the financial reporting on which lending decisions are made.

Much has been written about the banks' unwillingness (and/or inability) to lend. As significantly, my fellow blogger Martin Williams drew attention late last year to credit insurance agencies and the impact of their decisions to pull cover in many circumstances and the consequences businesses - large and small - seeking to access credit.

In the run-up to Christmas, Chris Poll, the man behind Accountancy Age Award-winning software Validis, developed the point in a letter to the CBI which he passed to me. More tellingly he highlighted the financial reporting shortcomings that are exacerbating the current situation.

As he told the business body:

'The main problem with current Treasury economic forecasts is that they are made on annual financial information / statistics that are up to two years out-of-date. Financial lending and the credit system are seizing up for the same reason - because those institutions lending or providing credit facilities to SMEs cannot accurately assess the business risks of the companies they insure in the present climate.'

As Poll points out, banks, factoring companies and credit risk insurers (them again) all rely on company account information that has been annualised and summarised by the likes of Companies House or other commercial agencies. These accounts are at least nine months out of date at best (and at least a year and nine months after the first month to which it refers) and in the case of SMEs are often unaudited. (It will be interesting to see whether calls for the audit threshold to be lowered intensify over the coming months).

As a result changes in trading patterns in the last few months of the financial year will not be identified. That will be especially significant when looking at any accounts that cover the year to September 2008 as these will fail to reflect the bloodshed of the last four months of the year.

The upshot is serious and worrying.

Again Poll puts it well:

'Today no one has any current corporate financial information on which to make economic projections or to assess the risk of lending or insuring. This may be acceptable in periods of steady economic growth but is a major problem in periods of dramatic change or wild fluctuations in economic conditions. Then the company data needs to be both current and much more detailed/granular.'

As a result, with so little up to date information available it's little surprise that credit risk insurers have responded cautiously, reducing or removing trade insurance cover if they believe they are likely to be exposed to increased claims. Without this cover, larger companies doing business with SMEs are exposed to a much higher degree of risk if they continue to trade with SMEs who have lost their trade insurance. Then the larger company's credit rating is reduced, often significantly. The problem moves up, and back down, the food chain.

'As a direct result the commercial paper market freezes and, as most bank/lending institutions covenants require credit risk insurance cover, bank borrowings have to be repaid or invoices cannot be factored or financed,' says Poll. 'This is what is happening today. So any efforts by UK government to pump money into the banking system or to issue directives to banks to lend to SMEs will not address the fundamental cause of the problem. Any government loan guarantees must also be based on an assessment of current risk.'

A few years ago Poll's proposed solution would have been impossible - that all companies disclose up-to-date (ideally monthly) management accounts information. Today technology makes it doable. (And yes Poll's company can help - as I'm sure can others. But that's not the point. In the interests off disclosure I should also say we are working together on a project).

By providing up to date information, the most recent trends can be analysed by Whitehall and regulators and current risks can be accurately assessed insurers, banks and other financial institutions that provide liquidity for business.

Without addressing improving the data on which lenders and insurers make decisions, caution will prevail and the lending system will take a hell of a lot longer to unlock.

As Poll says: 'Timely collection of up-to-date corporate information is the only way to restore confidence and unfreeze the UK financial system.'

Moving as close as we can, as quickly as we can, to real-time compliation, collection and oversight of financial information has to be the goal.