Category Archive: Debt Recovery

  1. 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.

     

     

     

     

     

  2. 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.

     

  3. 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

     

  4. 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

  5. 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?

     

  6. What Costs Can I Add onto a Debt ?

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    We understand that it’s hard enough to build and maintain a business, without having to fund your clients business too!

    Corp & Comm deal with many small business owners  who are effectively providing interest free loans, in the form of late payments. So we’re often asked:-

     

     

    “What late payment interest can I add onto a debt ?”…

    “Do I need to mention costs in my terms ?”…

    “Are there other fees or penalties I can apply ?”

     

    Here is our advice

     

    You are entitled to add costs and interest on any legitimate business to business debt.

    Irrespective of whether your terms and conditions state that you can or indeed will. Government legislation allows you to add three basic additional costs :

    • Late payment compensation – Set at £40, £70 or £100 depending on the value of the debt.
    • Late payment interest – Calculated at 8% above the current Base Rate.
    • Reasonable debt recovery costs – Usually around 10% of the total debt value.

     

    Terms & Conditions

    We always advise that your terms and conditions should make reference to your entitlement to add allowable costs to any legitimate, unpaid account. However you must ensure that these costs are reasonable and not excessive.

     

    As a result, we advise you use the above guidelines as your basis to additional costs. You may well feel that you should be adding more but the challenge is that the more excessive your demands become,  the less likely you are to be paid.

     

    A simple addition to your terms along the lines of…. ‘Whenever there is a payment delay upon a legitimate invoice and our agreed payment terms are exceeded, we reserve the right to charge all allowable late payment costs, as per Government legislation, found within the Late Payment of Commercial Debts Interest Act.

     

    If you have additional questions or would like help with recovering late payments please get in touch.

     

     

  7. The ‘B’ Word…..Brexit! Can I plan in the Uncertainty?

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    Politics!! – It affects business whether we like it or not.

     

    Many have tried to turn a blind eye (and ear) away from the ‘B word’ or Brexit!

    However, there are some key considerations to remember when it comes to supply and the subsequent credit management.

     

    In various industries there is talk of contingency measures being taken, to mitigate potential supply problems from March. One of the measures being banded about is ‘stockpiling’.

     

    Typically, this will have a greater impact on the supply of goods but service industries may experience issues too. For example if paper prices increase, this would have a bearing on printers, training companies e.t.c. having a domino effect.

     

    Now there may be some whom will live with the mantra… ‘make hay whilst the suns shines’ but we must all be aware of the risks that increased stockholding could bring and have contingency plans:

     

    Consider:

    • You’ve carefully vetted and checked your customers and have determined a credit limit that both you, ‘the Supplier’ and the client, ‘the Buyer’ are comfortable with. Should the Buyer suddenly exceed this limit, without the guarantee of a pending order to fund the increased spend, are they going to be able to clear the larger supply invoice ?

     

    • So the Buyer has a warehouse full of stock ‘just in case’ but a larger stockholding is not a pre-cursor of larger revenue. In fact, it could lead to quite the opposite. Should there not be an increased demand for items, the Buyer may be forced to sell at a lesser price, which leads to lesser revenues, a squeeze on their cash-flow and decisions as to which Suppliers to pay.

     

    • Finally let’s not forget the possible issues the Supplier may face with stockholding. The costs to any Supplier in fulfilling a larger Buyer’s order obviously increase. The question any supplier should ask is… can I afford to invest in fulfilling this new order and if so, how can I mitigate the exposure and risk of the costs for same ?

     

    There are a few key principals as to how to mitigate invoice exposure and risk, we’ve covered them previously in both our past articles and on our various website blogs such as ‘The Ten Commandments’

     

    If you want to know more, then contact our team today.

  8. High street misery, Brexit…How can you manage the affect on your business?

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    Let’s make no bones about it, the next few months are a period of uncertainty for all of us.

    Brexit is finally happening!  Judging by the noises coming out of parliament, the deal is not going to be to everybody’s taste.

     

     

    The High Street is in a state of disrepair, both physically and metaphorically. A recent ……. survey claimed that inner city retail outlets were closing at a rate of 14 a day !

     

    Now more than ever is the time for you to know who you are dealing with. Also just as importantly who they are dealing with ?

     

    On face value, you may not have a direct dealing with an import or export company, or indeed that of a High Street retailer but it is imperative that you start to trace the business path.

     

    Christmas gives everybody a great opportunity to speak with your customers. Whilst you are speaking to them to wish them well for the festive season, ask them the questions that will give you the information you need to make some measured judgements.

    Examples:

     

    “I know a little bit about your business but please tell me briefly, who are your major customers,

    what type of clients are you looking to attract and are there any particular industries ?”

     

    “We were having a discussion here the other day about whether Brexit will affect us, do you think it

    will affect your business in any way ?”

     

    “What’s your thoughts on the current state of the retail industry, do you think it will

    have any bearing on businesses like your and ours ?”

     

    You’re trying to ascertain whether at some point in the future, your customers will be affected by the uncertainty to come.

    • Will Brexit impact their costs or margins ?
    • Will the reduction in High Street trade reduce their revenues and cash flow ?

     

    Remember, 8 times out of 10, a debtor is only a debtor by circumstance. Something has impacted upon their money chain. A major customer has gone bust or a supplier is delaying goods for sale. This impacts on their revenue and cash flow. Often your customer has no other choice than to pass this pain further down the money chain.  Including delaying payments to their creditors whilst they resolve things.

     

    The more informed you are about your client’s exposure and risks, the more able you are to identify changes in trading patterns and payment schedules. This will then enable you to  react faster, when taking actions to ensure your cash flow is not the one that is affected.

     

    Christmas may well be the season of good will but it must also be the season of good practice.

     

    We are here to help. So if you would like to get our advice or use our services please get in touch>>>

     

  9. How do you make sure you receive a treat and not a trick ?

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    Halloween…  a time for ghouls and ghosts, tricks or treats, but also due diligence.

    Oh no…more late payments

     

    We all dress up pretending to be other, often ‘un-worldly people’. The aim being to remain unknown, to scare or maybe trick the unsuspecting and hopefully to escape  with a bag of loot. All in the name of fun of course.

    But…

    If you consider this in a business context, it’s not so fun, especially when you consider the real aim is to trick you out of your hard earned money!

     

    It may sound harsh even far fetched but we all know that there are companies out there who don’t need Halloween season as an excuse to try to pull the wool over people’s eyes.

     

    Remember in most cases October’s invoicing is Christmas’s cash flow.

     

    Doing all that you can now to ensure that your customers are true and valid, will go some way to ensuring that the invoices you raise this month have a chance of being paid in the future.

     

    What action can I take?

    • Check up on the liquidity of both your new customers and also your bigger value customers.
    • Check that the account details you hold are correct and that you’re billing the correct company.
    • Check that there aren’t any pending insolvencies raised against the customer.
    • Check that the people running the company, are who they say they are.

     

    How do I do that?

    Use these FREE web-links to aid in your investigations :

     

    www.companieshouse.gov.uk/beta

     

    www.biz.gov.uk/insolvency

     

    www.thegazette.co.uk

     

    As you know, our mantra is… ‘an ounce of prevention is worth a pound of the cure’… so being forewarned is forearmed.

     

    In this season of pranks and high jinks, no matter how tempting it may seem to chase that quick buck, that big invoice, it is imperative your do your diligence first.

     

    Don’t get fooled into accepting a trick, concentrate your time on receiving those treats !

     

    Are you owed money?

    Why spend valuable time chasing for payment when we can do it for you? Submit details of owed invoices quickly and easily online , or simply give us a call 01535 654 594. On occasion you can even add our fee and interest to the total amount we aim to collect.

     

  10. Dowsing the Flames of ‘Pheonixing’ – Insolvency Regulation Change

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    Regular readers to our newsletters, blogs and social media will know that we’re championing insolvency regulation and law changes.

     

    The goal is to prevent reckless company directors from evading all liabilities, with such ease when their companies enter insolvency.

     

    The process of closing a business and then ‘phoenixing’ a new company from the flames, free of debt needs to stop. It is the scourge of all small businesses.

     

    We’re campaigning with the Government’s Small Business Commissioner Paul Uppal for changes in both law and legislation.  Reckless directors must remain responsible and be held accountable for their actions.

     

    We reported last month discussions we’d had with the Commissioner’s office about what changes needed to be implemented. This directly led to meetings both with the business regulatory bodies i.e. Companies House and in the annals of power in Parliament.

     

    It seems no coincidence then, that the Government has just announced new measures. These measures are aimed directly at forcing reckless directors to become more accountable for their actions.

     

    Notably the Government said it wants to stop the practice known as ‘phoenixing’. Plus it stated that for the first time, directors dissolving companies to dodge debts will face misconduct investigations.

     

    Change is starting to be noticed. Indeed Stuart Firth, President of the Insolvency and Trade Body R3 stated…  “The Government’s announcement that it will look to disqualify directors of such companies, is an important part of ensuring that directors are less likely to walk away from their responsibilities”.

     

    Now we’re not stating that we’re directly responsible for these steps but we’ll happily take some credit where necessary.

     

    We’ll continue to converse with the Commissioner’s office and the next stop is conversations with The Insolvency Service, to discuss how we can put these plans and ideals into general practice.

     

    Watch this space….