Tag Archive: insolvency

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

   November 13, 2019 2:22 pm Leave a Comment

    

   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 Agencies – See 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.

    

    

2. 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

3. Can a Leopard really Change it’s Spots?

   September 19, 2018 3:42 pm Leave a Comment

    

   Large company failures…. They make the news on an almost weekly basis.

    

   Big high street brands such as Toys R Us and House of Fraser have suffered high profile insolvencies this year and others like Debenhams and Marks & Spencer have been forced into an aggressive program of store closures.

    

   In fact The Centre for Retail Research confirms that 41 high street names have entered insolvency so far in 2018… and it won’t end there.

    

   Now we realise that not everybody deals directly with these big high street brands but the likelihood is the chain of supply will work it’s way to your clients and suppliers in some way and will they be forced to pass on their pain to some degree ?

    

   The question is, what can you do to avoid being a victim in these trying times.

    

   The answer is simple, keep doing your diligence.

    

   Regular readers will know that we often speak about employing good checking processes and systems into your credit control procedures. In these trying times, let’s quickly revisit them.

    

   1. Conduct REGULAR credit checks on your client and suppliers.

   • Check for any adverse profit warnings, reduced credit scores and credit limits. All of these are indicators that the reference agencies and regulators are concerned.

    

   2. Reference Companies House and other business databases.

   • Check your existing and new information with the databases. Have new businesses been set up by the same directors ? Does this point to an imminent change in the business ?

    

   3. Do your diligence on the internet.

   • The internet is a great source of news and notices. If there are rumblings of troubles and insolvencies on the horizon, it’s better to be forewarned so you can act first, not last.

    

   Now we’re not saying that by you conducting the correct diligence, the rate of company insolvencies will fall, far from it.

    

   What we are saying is that in these days of companies closing, entering insolvency and then ‘pheonix-ing’ from the flames overnight into another business, you are better forewarned.

    

   For 2018 has definitely shown us that your leopard can indeed change it’s spots.

    

   If you would like to learn more about the diligence, credit control processes and methods to improve overall cash flow in your business check out our other News Blogs or attend our Seminar, that is taking place as part of Leeds Biz Week.