Tag Archive: debt

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

   October 15, 2019 1:36 pm Leave a Comment

   

   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. Can you spot a wolf in sheep clothing?

   July 10, 2019 11:02 pm Leave a Comment

   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

    

3. Can You Have Your Cake & Eat It?

   February 13, 2019 1:12 pm Leave a Comment

    

   

   The Body Shop is another case of corporate insolvencies continuing at a pace but do we all really know what a company insolvency means to us and our businesses.

    

   When dealing with insolvencies of companies there are two main types of insolvency – Administration and Liquidation.

    

    

   The simplest way to explain the difference is that:

   • Liquidation is not good,
   • Administration is better but still not great.

   Lets look at an example

   The Body Shop – They entered Administration in February of this year.

   This means that a third party will take over the running of the company, usually an Insolvency Practitioner (IP) or an Accountant with a view to finding a buyer for the company as a whole, or continuing to run it as a going concern.

   Deals are often made with the creditors of the business. They’ll offer people who are owed money say 40p in every £ owed, to reduce the liabilities of the business and to make it a more attractive proposition to buyers.

   For the established high street names Administration is the preferred option, so that the company can continue to run. The brand name continues and there is a possibility that some, if not most of the staff can keep their jobs.

    

   Is there such a thing as a successful Administration ?

   One such example of a ‘successful’ administration is HMV.

   • A high street name needing support to find a buyer and retain goodwill rather than close.
   • Administration was the preferred option.
   • Thankfully a buyer was found for HMV and the majority of the stores stayed open, safeguarding numerous jobs.

    

   What if there wasn’t a buyer ?

   If a buyer could not be found, or the company is found not to be a viable option for continued trade, as in the case of Carillion and most recently Wilko, then the company may enter Liquidation.

    

   But what is Liquidation ?

   This is where a Liquidator or IP will affect a ‘fire sale’ of the company’s best assets such as:

   • stock,
   • order book,
   • machinery
   • plant

   Monies raised are to pay its creditors. However, because the company has closed and the brand no longer trades, there is no future revenue and the staff will unfortunately lose their jobs.

    

   In Summary

   Should you suffer the pain of having a company enter insolvency, then your best hope for a positive outcome is if it goes into administration. In which case you should always lodge your claim with the IP, as there is a chance that you could get paid a creditor’s dividend, or some pence in the pound against what you’re owed.

    

   If the outcome is liquidation, again lodge your claim with the IP but be aware that any dividend will only come about from the sale of assets and this is solely in the hands of the IP. So no guarantees, no timescales and less chance of a positive outcome.

    

   Remember,  there are ways and means of limiting your exposure to the risk and pain of bad debts and insolvencies. If you would like to discuss these options, please feel free to as well as reading more of

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

   November 21, 2018 1:39 pm Leave a Comment

    

   

    

   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>>>