Posted on 7th Oct 2009 by Alan in Late payments | Comments Off
As part on the government’s push to support businesses they have amended the trade credit insurance top-up scheme – this initiative does not remove the need for businesses to control their late payment – but should increase the number of businesses that can take advantage of it.
The scheme was introduced to help those firms struggling with late payment which often led to customers defaulting on these late payment often finding it difficult to get sufficient insurance cover to safeguard themselves.
Under the scheme, which is due to run until 31 December 2009, suppliers who have seen their insurance reduced can buy six months of government-backed insurance either to restore cover to the original level or to double the amount they are able to obtain from the private sector up to a set maximum.
Research carried out by the government has suggested that businesses are adapting to reductions in their insurance by managing their credit control more actively. Late payment continues to be a major issue with UK companies. But by adopting more rigorous credit control over late payments has reduced their dependence on the scheme.
However, a number of businesses have not been eligible but they have also needed the time to adjust to reductions in their cover. Forcing their need to control late payment rather than rely on their cover.
To provide them with some extra breathing space, the government has introduced three changes to the scheme.
Where a business has seen a reduction in its credit insurance since 1 October 2008, the scheme now provides six months top-up cover at a price of 1 per cent rather than the original 2 per cent.
The old lower limit of 20,000 has been removed and the upper limit of 1 million has been increased to 2 million.
However, vigilance on late payment and effective credit control remains the watchword for businesses.
To use the scheme, businesses should contact their trade credit insurer.
Posted on 7th Oct 2009 by Alan in Late payments | Comments Off
Late payment is no myth - more and more companies are suffering the late payment syndrome.
As late payment bites the ABI figures show that trade credit insurance remains a vital lifeline to businesses that are hit by the effects of the recession.
In Quarter 1, 2009: The total number of claims was 9,213, an increase of 48% from 6,225 in Q1 2008 and the total value of claims was 316m, an increase of 166% from 119m in Q1 2008.
Late payment and poor credit control is raising concerns among credit insurers and invoice discounters.
Trade credit insurance claims are a good indicator of what is happening in the UK economy and how late payments is affecting UK businesses. Clearly, the economic situation remains very tough and highlights the need for greater vigilance with late payment and the need to ensure effective credit control.
Posted on 7th Oct 2009 by Alan in Credit Control | Comments Off
Good credit control is at the heart of any business. We have all heard the old cry of cash flow is king – but it is true. In the current climate efficient and effective credit control will generate cash flow and keep your business afloat.
The question is – is yours or your staffs time better spent generating business than organising credit control? Many business owners do not want to let go of this essential task but is this, the best use of your time. Credit control is consuming and often needs skilled staff with the time and patience to make sure you get paid on time.
So if you want to concentrate on your core business, why not consider outsourcing your credit control. I feel sure the time saved can be more productively put to use growing your business.
Outsourced credit control will retain your identity with your client and should provide you with a much improved cash flow and lower debtor days.
With many businesses the lack of HR issues solved by outsourcing their credit control is a very attractive proposition. No need to consider holidays, maternity/paternity leave and sheer headache of management time supervising staff.
Outsourcing your credit control can range from partial outsourcing to total outsourcing. Why not speak to Alan Smith at Cashew Group they do a lot more than just Cashflow Protector.
