Category Archive: Credit Control

  1. Can you make your Cash Flow ‘Covid proof’ ?

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    It’s been a struggle but we’ve all pitched in together and between us we seem to have got through the worst of this pandemic. However in a business point of view, is the worst still to come ?

    The Government is slowly turning off those taps of support and its time again to stand on our own.

    The challenge comes with the fact that during lock-down, many companies were not generating revenue, meaning there is no money in their accounts. A lack of liquidity has a huge bearing on cash-flow, for both the Buyer and Supplier.

    So how do you mitigate your exposure and risk in these troubled times ?

    The answer is as simple as A, B, C.              …. Analyse – Bill – Contact.

     

    Stage 1 – Analyse.

    They say knowledge is power and all knowledge comes from information. Unfortunately there’s no exact way to say who’s been affected more than others. Just because they’ve been around for 50 years and been a customer of yours for 10, doesn’t mean to say they’ve had either the strength or financial clout to ride out this pandemic properly.

    Credit checks are a great start but only use a credit check as a guide. The information contained in credit checks is historic and is very rarely up to today’s date. A lot can change in business almost overnight. However that said, if a company had a good historical financial history pre-Covid, the likelihood is they may have sufficient business acumen to come through the other side.

    Credit checks are only the start of a robust analytical process. Internet searches, trade references and company reports are all excellent tools to add to a process and allow a Supplier to build an accurate picture as to the risk a customer may bring.

     

    Stage 2 – Bill.

    If, after completing your diligence you’re prepared to trade with the customer, now is the time to be prudent with your exposure and risk. Don’t get carried away with working without reward. We advocate to all businesses in these troubled times to raise littler invoices more often.

    Can you break down your service / supply into smaller invoicing segments ? For example, if you’re a commercial electrical contractor conducting a complete re-wire of a property, can you bill in phases. Alternatively can you agree with the client a series of payment applications and stage payments, for example every two weeks a payment of £2,000.00 needs to be received.

    Raising smaller invoices mitigates risk. Should a customer struggle to pay a smaller invoice, then this is an indication they’re short of funds and it’s better to learn these things sooner rather than later. Should your payments stop, you have the option of stopping work until you are paid meaning you can concentrate your time, efforts and money on another project that IS paying you.

     

    Stage 3 – Contact.

    As with all things in business, action is the key. Cash is in short supply at the moment, many businesses haven’t been open for months and haven’t being raising invoices. Many businesses raise invoices on established credit terms and so face the prospect of having no income into their business for perhaps another 30 days, or even more.

    One of the fundamental keys to great credit control is being organised. Set yourself some time aside each week to manage your accounts, allocate your payments, review whom owes you money and then speak with these customers to secure your payment.

    Don’t let the current plight of many businesses delay your thoughts in asking for your monies. Everybody is in the same boat, everybody needs what’s rightfully theirs and it may well be that your pro-active action of recovering your monies inspires those to ask for their own monies in turn and will lead to the continued flow of cash through the economy.

    Don’t forget, unless your business is credit control then asking for your monies may not be your forte. Don’t be put off, simply be prepared. Have your ledger to hand, familiarise yourself as to what’s owed to you and use your regular script to make those calls.

    But if you’re still not okay with the tricky subject of asking your customers for money, no need to worry, your expert credit control adviser is at hand… after all, that’s what we’re there for.

  2. Discounted Recoveries Help your cash flow… whilst your cash flow helps others ?…

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    When a business coach recently asked us… Why do you do what you do ?… we all agreed it was because we want to help businesses survive by guiding them through a tricky situation.

    Kind of sums up what we’re experiencing now.

    This crisis has seen many businesses diversify their offerings to help others, which forced us to ask ourselves…

    What assets and skills do we have that we can offer to others to make things better ?

     

    For the period of May and June, we’re going to try to do our bit, to not only help you but help others :

    • Every initial new debt instruction demand we shall send for free. 
    • We shall make a £1.00 contribution to the NHS for every new instruction we receive.
    • Added to this, we shall also reduce any successful collection fee by 50%.

     

    When times are tough, our aim is to make things better, make things easier and help people survive by putting money back into their pocket, not take it out.

     

    Our moral compass tells us that now is not the time to make the most of an opportunity, now is the time to do what we can for others and to be the trusted adviser we pride ourselves on being.

     

    Simply email any new instruction to accounts@corpandcomm.com or chat with us on 01535 65 45 94.

    Stay safe, stay at home, stay alive.

  3. Slow and steady may not win the cash flow race….

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    You all know that we at Corp & Comm love a cliché. There’s always an element of truth to a cliché and they’re usually good life lessons.

    In these troubled times, there is one life lesson that will stand your credit control and debt recovery in good stead…. Little and often.

    Let’s be honest, the lock-down is not going to end any time soon so as businesses, we need to make plans for at least the next two months. Key to these plans are two cash goals :

     

    1, Get what money you can in quickly.

    2, Get what invoices you can raised now.

     

    Here’s our tips to achieving both :

     

    Goal 1, Get paid what you can, as quick as you can.

    Look at what’s currently outstanding on your ledger and put some time aside to follow this up.

    Don’t feel bullish because you’re asking for money, you’re entitled to it and we’re damn sure you’re not the only one who needs it. Take solace in the fact that everybody is in the same boat, trying to stretch their finances to all to make ends meet. Where you need to, offer payment arrangements with your customers. Not only will this gesture help create some much needed cash-flow for you, it will also help strengthen your customer relationship which can only pay dividends in the future. Your customers will appreciate the gesture and to be honest, most companies will find it easier to pay three lots of £1,000 over three weeks, rather than £3,000 right now.

    As we said… Little and often.

     

    Goal 2, Raise what revenue you can, as quick as you can.

    Look at what invoices you can raise both now and in the near future.

    Review your current work-load. Are you already part way through a job or project that you could raise an immediate invoice for, such as first fix for a contractor, content for a web developer etc. Raise an interim invoice for ‘work done’ and send it sent to the customer. You create the opportunity for much needed revenue and the customer will appreciate smaller, incremental bills…. Little and often.

    Finally, when we do all get back to some normality, the pressures on businesses will be even greater because they’ll be no more Government backing. When you’re back to full speed use the same brief. Instead of completing lots of work and then raising a larger bill later, split your new work up into segments and bill lesser amounts quicker to speed up payments and most importantly cash-flow…. Little and often.

     

    The Covid crisis will have a serious effect on how we conduct future business and will force many businesses to look at how they do things and how they can change for the better. These tips above are just some ways of maintaining ‘cash flow continuity’ and are a great start in managing a steady ship, rather than the boom and bust mentality of previous years.

  4. Remember, remember businesses go bang all year, not just in November!

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    Lets Reflect

    The UK’s political and economic climate continues to be one of the toughest in recent history. With the UK’s economic growth running at the lowest in 9 years.

     

    As we know several big brands have been forced to close, with a steady stream of others following month after month. The ‘ripple effect of debt’ on smaller businesses is significant and felt across industries.

     

     

    November is a month of reflection and looking back so it felt right to give thought to 16k+ companies who went into insolvency during 2019. What can we learn to limit further losses ?

     

    Some Facts

    Recent research from Hitachi Capital Business Finance (HCBF) shows that late payments are affecting small business of all sizes across all industries:-

     

    – 75% of small businesses (10-49 employees) are dealing with late payment issues.

    – Whereas 50% of sole traders are force to deal with debtor issues.

     

    It is a fact that late payments are notoriously hindering the ability of businesses to progress – not to mention the precious time wasted chasing overdue payments.

     

    Imagine This Scenario.

    You won the order, provided a great service or product and sent your invoice as agreed but when it’s time for them to pay you, they appear to have fallen off the face of the earth. Your calls are never returned, your emails ignored. You have concerns and maybe even heard a whisper that the business is ‘struggling’ . You fear the worst for your business, but what can you do?

    • Have you already spent too much time on this one client and have other priorities to focus on. After all, investing your time in an invoice already raised is not going to increase the value of the invoice. Maybe now is the time to hand the debt over to a recovery agency like us to collect?
    • If you’re determined to press on yourself, then we’re still there to advise and guide you as to the best way forward. Why not benefit from our resource and techniques to aid in your recovery and diligence. You will soon be able to tell whether you’re going to be paid, or whether your debt may be lost.

     

    Useful Resources & Links We Advise.

    • Companies House – Search for information about the company & people.
    • Credit Reference AgenciesSee what the financial status of the company is.
    • Websites & Social Media – Check the client’s own sites, look at reviews etc.

     

    If you have any questions or would like further information on our advice above or indeed simply want to discuss what can be done, please get in touch : Contact Details

     

    Your benefits from outsourcing to Corp & Comm are :

    • Unlock Cash
      Pass aged debts and late payments to us and improve your precious cash flow.
    • Reduce Costs
      Save the time your business spends chasing payment? What does that time translate to in cost, opportunity cost, bank charges etc?
    • Flexibility
      Outsourcing debt recovery or credit control to experts means you will have improved cashflow that can pay creditors or make investments to allow your business to thrive.

     

    Simply gives us a call 01535 654 594 or fill in our Contact Form and one of our advisors will be in touch soon to discuss your requirements with you.

     

     

  5. Put the Ho Ho Ho in your Christmas Cash-Flow

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    We’re whispering it quietly but the festive  ‘C word’ is on the horizon.

    Yes indeed, Christmas is coming and love it or hate it, as a business you must be prepared for it.

    The invoices you raise now, will in most cases fall due at the end of November. This means that the monies you raise from October invoicing will be your ‘Christmas Cash-Flow’.

    December is notoriously a troublesome and expensive month.

    Bills and wages are not the same as in ‘normal months. Add seasonal factors such as Xmas bonuses, parties gifts etc and suddenly your expenditure is higher than usual.

     

    Couple this with the fact that most businesses close for a period over the holidays and you’re quickly faced with the perfect storm of having to fund an increased four-week expenditure period whilst perhaps only having a three-week working period to raise revenue.

     

    Suddenly the actions you take now become so much more important.

    As both clients and contacts of ourselves will know, there is no cast iron way of guaranteeing that an invoice won’t be paid late but there are ways that you can minimise that risk.

     

    1. Make sure that your invoice holds the correct written information.
    • List the customer’s information correctly. Make sure any description of goods/services provided is accurate. Ensure the price is as quoted and the invoice is dated correctly.

     

    2. List on the invoice the payment information the customer needs to pay you.
    • Make sure your complete bank details are on your invoices : bank name, sort code and account number. Include your payment terms and most importantly, the date for payment.

     

     

    3. In December, have a ledger to hand to see what invoices are owed…. and action it !
    • In most cases businesses will only be trading for three weeks in Dec. Be proactive with your ledger, don’t delay when an invoice is overdue. If the invoice is fair, it deserves to be paid.

     

     

    Help is to hand if needed

    If you don’t have a plan to action your debtors, or struggle to implement your processes, then don’t delay, use your peer support network and contact us for all the help, advice and guidance you’ll need to enjoy a stress free end to 2019.

     

    For more helpful hints to aid your credit control please review our other blogs.

     

    Merry Christmas Folks, have a good one. From all the team at Corp & Comm (01535) 65 45 94.

     

     

     

     

     

  6. How to be the first in line for payment – P.E.R.F.E.C.T

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    We had a meeting with our local MP a couple of weeks ago to discuss how Brexit will effect the credit management of businesses.

     

    Here at Corp & Comm we live by the words we preach and we’re prepared to stick our neck out by stating we’re confident we’ll leave the EU without a deal.

     

    If so, market forces dictate that there will be less money in the economy. Demand will remain the same or perhaps increase, whereas supply will probably decrease. Inevitably this will bring an increase in cost. Meaning an increase in expenditure levels, leading to less surplus money to meet creditors demands for payment.

     

    Why tell me this…?

    The reason is we want everybody to be prepared, to review what monies are owed to them and to have a plan to take action if and when needed. We want you to be first in line for payment, so here are our hints and tips, so  that everybody can at least have some idea how to be P.E.R.F.E.C.T when the time comes to asking for your monies, without it being detrimental to client relationships.

     

    • PREPARATION
      • Have your call script to hand so to be both concise and professional.
    • ENTHUSIASM
      • Be bright and alert. Nobody wants to talk to a grump.
    • REALISM
      • Ask yourself if the debtor can meet your request or will you need to negotiate.
    • FOCUS
      • Don’t go off track. You’ve called to ask for your money so ASK FOR IT !.
    • EMPATHY
      • Although you need to be firm, you must also understand the debtor’s position.
    • CONNECT
      • Try to form a bond with the customer, they’ll be more likely to resolve your claim.
    • THE OUTCOME
      • Always remember why you’ve rung, you need your money so make this your goal.

     

    Alternatively…

    If you would rather spend your time on other priorities and use a third party to broker payment, we are here as a trusted payment partner. We save your time, allow you to remove yourself from chasing payments and have expertise to get you paid quickly .

    You can outsource your end to end Credit Control or individual Debt Recovery, check out the rest of our website www.corpandcomm.com

    or  call us on: 01535 654 594

     

     

    Action is the key, as our clients testify :

    When Rob first mentioned his Credit Control service…it sounded too good to be true.
    I had a list of customers who needed constant prompting to pay their invoices, but I didn’t have enough time to contact them all and still get on with my main workload.
    Rob and his team now carefully and expertly look after my customers and encourage prompt payment of their invoices. Having them look after my business income, means I’m free to focus on the part of the business I really enjoy. Almost immediately, the turn-around in my finances helped rescue my cash flow and keep both the bank manager and my wife happy.”

    Neil, Thornton Directory.

     

  7. Can you spot a wolf in sheep clothing?

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    Due diligence – If something doesn’t feel right, act on it

    Recently we were instructed to investigate the matter of an unpaid, £25k account. Something didn’t feel right about the claim, right from the start.

     

    Our investigation showed a complicated trail of untruths and fraud. Including fake websites, identity fraud and hacked emails. We immediately advised the client to call in whatever guarantees they held but the prognosis wasn’t good.

     

    This isn’t the outcome we want for any of our clients. So, following this costly and inconvenient process, we have been able to educate our client on how to strengthen their processes.  Central to their improvements was incorporating simple but effective ‘due diligence’ checks. These checks provide business owners with a greater volume of business and financial information about their potential clients. Which will then aid them in deciding who they deal with next time.

     

    Don’t be worried to ask for client details. Like many things in business, its the way you ask. Having processes like this in place is professional and should provide client reassurance.

     

     

     

    1.Treat every customer as a potential debtor !

    2.Have an account opening form. Make sure you know who you’re dealing with.

    3.Compare and contrast paperwork e.g. purchase orderhttps://www.thegazette.co.uk/s -Is everything as it seems?

     

    Useful Resources

    • Companies House – Search for information about the company & people
    • Check financial/liquidity status – see if any financial concerns raised
    • Websites – Check the clients own site, look at reviews etc
    • Account details – Have a pro-forma to collect client details. If you would like a blank template, email us

    If you have any questions or would like further information on our advice above or using our services please get in touch Contact Details

     

  8. Boris or Jeremy, choose your client?

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    Regular readers know that we advocate checking and double checking all prospective client and supplier data. The more financial information you hold about a contact, the more informed your decision making will be and the more limited your exposure and risk.

     

    The Challenge

     

    Imagine this, two people come to you, promising the earth. You’ve heard of them before but you need to learn more before you can decide who best to side with.

     

    For the sake of this example, let’s call one

    Alexander Boris de Pfeffel Johnson (or Boris to his friends) and the other

    Jeremy Richard Streynsham Hunt ! !

     

     

     

    Resources used:

    • Companies House – Search for information about the company & people
    • Check financial/liquidity status – see if any financial concerns raised
    • Websites – Check the clients own site, look at reviews etc
    • Account details – Have a pro-forma to collect client details. If you would like a blank template, email us

     

     

    Simple due diligence shows us

    Boris :

    • Was born in June 1964 and has a known address in London N7.
    • Official records show that Boris has only ever been a director of one company, Finland Station Limited.
    • The company was formed in April 2006 and for the first 11 months was actually known as Blackrock Productions.
    • Boris was a director from the inception of the business but resigned his role in May 2008.
    • The business was subsequently closed down in April 2016.
    • From 2010, the business had only ever filed dormant or small business accounts and as a result, the established trade reference agencies last rated the business as high risk.

     

    From this point, Boris does not appear to have a direct responsibility in any limited company business and so one may question both where his income is derived and his financial strength, key questions to ask when offering goods or services on credit.

     

    Jeremy on the other hand :

     

    • Was born in November 1966 and has a known address in Farnham, Surrey.
    • Records show Jeremy has a history of creating and managing businesses as far back as 1990.
    • The majority of said businesses continue to exist to this day.
    • Perhaps most successful was Hotcourses (Hotcourses Foundation) that was rumoured to have been sold in 2017 for around £30M, netting Jeremy a reported £14M.

     

    Jeremy continues to appear to be listed as a director of the business and although it is believed that his focus may be on other matters, there may be a dividend income to be coupled with his recent investment return.

     

    Conclusion

    In short, had our new client conducted the same simple diligence checks that we encourage all of our contacts and readership to complete, they could have avoided the prospect of a long, drawn out battle for money and power…. Unlike Boris and Jeremy J

     

    If you have any questions or would to know more about our services please get in touch – Contact Us

  9. British Steel has brought UK economics back into stark focus

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    Brexit continues to keep the continued poor state of the economy out of the headlines. However, the spectacular collapse of British Steel has brought economics back into stark focus with a bang.

     

    Anybody who has a measure as to financial indicators knows that the liquidation of British Steel was always on the cards. Plus it was always going to be sooner rather than later.

     

    Simple diligence investigations

    • Look into the parent company, Greybull’s other purchases shows numerous high profile business failures in recent years. Most notably electrical giant Comet and then Monarch Airlines. All of which ultimately cost the taxpayer a whopping £60m.

     

    • British Steels share price fell a staggering 80% over the last 14 months. An clear indication that experienced traders were pulling their money out, rather than investing in.

     

    • A review of British Steel’s accounts show a cash injection of £154m in the last financial year. Followed by a Government loan to the tune of £120m. All this demonstrates a serious miscalculation in both future trading and the accounting process.

     

    Every business owner whether at the head of large or small company, know it’s still very tough economically. So let’s be frank, it’s never been easy and it never will be. It’s how we educate, identify and manage the financial pressures that counts.

     

    Business hunches are usually correct. If you have doubts about a customer or a supplier, then there are quick and easy ways to determine whether you may have increased exposure or risk.

     

    Take the above examples about British Steel as a guide ;

    • Simple checks through Companies House and credit reference agencies will tell you who in fact is behind a company and that they may not be all that they seem.

     

    • Larger businesses with a share issue allows you to review periodic results and ratings, which can provide an indication as to whether a company is on the up or on the slide.

     

    • Most limited companies are forced to file financial accounts that are available to the public. By reviewing these, you can determine how well, or how poorly, a company is being run.

     

    British Steel isn’t the first and it certainly won’t be the last industry giant to fold. What’s important is what we learn from the failure. What indicators we use for the future and how we ensure that we’re not one of those caught up in the ripples of debt that ultimately flow down the supply chain.

     

    How can we help?

    To learn more about the benefits and costs involved in outsourcing your credit control to Corporate and Commercial please get in touch. We’re a friendly and professional team who want to help your business succeed. Email info@corpandcomm.com or Call 01535 654 594

  10. No holiday for your Cash Flow

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    Ah Summer Time…. A time for unnecessary sun cream purchases, lonely garden furniture and barbeques in the rain.

     

    However it’s also holiday season and just as business owners need to plan their own holidays, they also need to plan for the effect holidays can have. After all, you don’t want to be giving your cash flow a holiday too do you ?

     

    Wages still need to be processed and paid. Bills and invoices still require payment. Therefore you need ‘your own’ invoices settled promptly and accurately too, in order to keep the cash flow moving and ultimately allowing you to have a stress free, well deserved holiday.

     

    If you’re already a Corporate and Commercial credit control customer, then you can just kick back and relax, knowing that you have a dedicated credit controller to be on top of it all for you.

     

    However if you are short on time, resource or desire, you may need these tips:

    3 Easy Steps to Avoid Cash Flow Stress when on holiday.

     

    1. Remove any potential payment delays. If there’s a query that you’ve promised to resolve, get it done. Invoices are not going to be paid whilst an issue remains. Don’t give a debtor an excuse for delaying payment until you return by saying… ‘you were meant to sort that for me’.

     

    1. Invoice promptly and correctly. If there’s an invoice that can be raised, raise it. Even if it’s for part of a project, get the invoice raised. It’s better to have some monies coming in whilst you’re away than none at all.

     

    1. Plan for payment. Send an email with the invoices that fall due in your absence to your customers. Something along the lines of…. ‘Dear John, just a quick note to supply you with your invoice that will fall due on the 16th August. I’m away for a few days beforehand so just felt it prudent to get this across to you just in case. My accounts team are on hand should you wish to discuss this further, otherwise we’ll keep an eye out for your payment on the day’.

     

    In short, treat your accounts as you’re treating your impending holiday. Make a plan, prepare and execute. Taking these simple steps before you go can guarantee a good night’s rest whilst you’re away. Safe in the knowledge that you’ve done what you can to maximise the return of your monies.

    How can we help?