Posted on 22nd Apr 2009 by Cashflow Protector in Cashflow news & advice | Comments Off
Many retail companies are trying to tempt us to order in time for Christmas and pay next year (or the year after!), but not everyone can offer such ‘generous’ credit terms.
Take the case of award-winning businesswoman Denise Fresco, who runs a thriving courier company in North London with her husband Mark.
In 2006, their company was voted Business of the Year and the duo have just scored a double whammy by winning a High Growth Business of the Year award!
Cashflow Protector’s Managing Director Alan Smith, said: “Denise is one of our clients and all the staff at Cashflow Protector would like to offer her and Mark our warmest congratulations on winning this latest business award.”
Both awards were run by the RSA Trust and Enterprise Enfield who presented Denise with a certificate and a host of other goodies including a £1,000 cheque which has been ploughed straight back into the business.
Denise and Mark from Chigwell, Essex, founded “TCS - The Courier Service” in 2004 and built up a successful business delivering letters, parcels and pallets, but as the company grew, so did its debts.
Despite winning their first business award in 2006, behind the scenes Denise and Mark were starting to fall foul of unscrupulous companies who threatened to destroy their business by withholding payment.
Mum-of-two Denise, says: “We had started extending people’s credit because we didn’t want to lose their custom, but we were taken for a ride (literally!) by some companies which obviously had no intention of paying us.
“It wasn’t uncommon for us to stretch people’s payment terms to 120 days, but then several companies went into liquidation owing us thousands of pounds and the debt just skyrocketed.”
When Denise met Alan from Cashflow Protector at a BNI (Business Network International) networking event earlier this year, the company’s debt had become a serious worry.
Says Denise: “We turn over about £750k a year but that has to support our family, six staff and 20 self-employed drivers.
“All I can say is thank God for Cashflow Protector! It really has been the answer to our prayers! It’s early days but we have already recouped £40,000, which is absolutely wonderful. And now people don’t only pay us, but they pay on time!
“The system is completed automated so it’s really easy to use. But it also takes away the stress of chasing bad debts and makes the company look more professional.”
Denise added: “We have some pretty high profile clients on our books including The Royal Mail, Amazon and dozens of Conference and nationwide League Football Clubs, which shows no-one is immune from cash flow problems.
“My only regret is that I didn’t know about Cashflow Protector four years ago!
“This second business award is really the icing on the cake for us. We’ve had some tough times, but thanks to Cashflow Protector we’re still here to tell the tale!”
Posted on 22nd Apr 2009 by Cashflow Protector in Cashflow news & advice | Comments Off
Credit insurers have come in the firing line again after receiving criticism from business turnaround professionals for randomly pulling cover from companies. The Institute for Turnaround (IFT) said it has evidence of credit insurers withdrawing protection based on assessments of sector risks, without considering the financial health of individual firms.
In an interview with the Financial Times, IFT’s chief executive Christine Elliott said that a survey of its members involved in large numbers of company turnarounds revealed “blanket sector reductions in credit cover [or] withdrawal without regard to individual operations”. She added that this indiscriminate withdrawal was making it “doubly difficult” for businesses to be saved at a time of worsening economic conditions.
Responding to the allegations, Stuart Lawson, director of Aon Trade Credit, said that the state of a sector can be important in making credit insurance decisions but not the only factor. “The granting of credit insurance is assessed by country risk, macroeconomic conditions, sector risk and then the financial health of individual companies,” he said. “These are then weighted depending on their risks and certain sectors will undoubtedly have higher weighting than others. But this weighting is built into an overall risk model, which is by no means sector reliant.”
So be on your guard if you have credit insurance.
Posted on 22nd Apr 2009 by Cashflow Protector in Cashflow news & advice | Comments Off
Yet another article highlighting the credit crunch and the problems of customers delaying payment appeared in the Mail on Sunday - Enterprise section.
“As the issue of late payments becomes a growing problem, ensuring cash flow is harder than ever. A bad debt or delayed payment can cripple a small business
There are a number of ways that companies can protect their cash flow. Tightening up on collection procedures is essential to make sure that money is coming into the business regularly. Read the rest of this entry »
Posted on 22nd Apr 2009 by Cashflow Protector in Cashflow news & advice | Comments Off
One in five UK accountants have confirmed that their clients have been refused credit or had funding restrictions imposed in the light of the credit crunch. The findings, from a survey conducted by Venture Finance, provide the first real evidence that UK SMEs are starting to feel the effects of the well-documented economic downturn.
A quarter of the accountants surveyed believe their clients are more nervous about investing in their business. Forecasts are now showing that the number of business failures is expected to increase by 18 per cent by the end of 2009 so it comes as no surprise that many SMEs are feeling vulnerable.
In the light of the changed economic climate, businesses need to find alternative ways of stabilising cashflow and sustaining working capital. While cost cutting is one way that many businesses are responding to the credit crunch, alternative forms of finance are available to provide security and ongoing business support. Read the rest of this entry »
Posted on 22nd Apr 2009 by Cashflow Protector in Cashflow news & advice | Comments Off
Many businesses believe, once a debtor goes insolvent, there is no prospect of getting money back and they ignore any other correspondence. These businesses could be losing money.
It is probable that there will be more and more insolvencies and the instances of debtors going bust will become more prevalent. Therefore it is important that you know your rights and how to maximise your recovery from the bad situation.
There are a few things to look out for:
- If you supply goods (rather than services), it may be possible to recover these goods.
- You should ask yourself how important you are to the ongoing operation of a business. Can you improve your bargaining position?
- Not many people know that the priority of payments from insolvent situations has changed. H M Revenue and Customs has released its priority status and now ranks alongside all unsecured creditors. It is always worthwhile completing your claim form just in case there are funds available.
- Once you decide to complete your claim form, you should ensure that the claim is maximised.
- For all those businesses that are VAT registered, you should be recovering the VAT on the bad debt.
Remember, there are funds in insolvencies and you should get your share. If you (or anyone else) do not claim then any funds will be shared out between all those that do claim.
Are you getting your fair share?
If you have any doubts, you should seek advice. Talk to us at Cashflow Protector.
