1 in 7 businesses fear collapse – business news 20 November 2020.
James Salmon, Operations Director.
1 in 7 businesses fear collapse, covid-19, capital confidence hit , debt to hit 105% GDP, UK contracts more than any other member of the G7, covid, market and other business news.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
One in seven businesses fear collapse
Around one in seven UK companies say they were at risk of collapse, according to a new report from the Office for National Statistics.
The study saw 14% of UK companies say they have “low or no confidence” that they will survive the next three months.
While 40% had moderate confidence that their business would survive the next three months, another 40% had high confidence of making it through the period.
Pessimism was most apparent among hotels and restaurants where 34% of businesses said they would struggle to make it through the next 12 weeks.
It was also found that across all industries, 7% of businesses expect to temporarily or permanently close a site in the next fortnight.
With a situation where so many businesses fear collapse, if you sell on credit, how confident are you, that those who owe you money will be able to pay? Strong credit management policies and tools are more essential than ever. CPA has been assisting businesses in credit management for over 100 years.
Capital confidence hit
An index compiled by the ICAEW shows that uncertainty around Brexit and the coronavirus crisis have hit business confidence in London, with the poll of more than 3,500 senior managers showing optimism in the capital is the weakest of any region in the UK, France, Germany and Netherlands.
The report said: “The EU is a particularly important market for London’s globally prominent financial and business services sectors. So, uncertainty over whether any trade deal will encompass services or whether there even is a trade deal is likely to be weighing heavily on the capital’s businesses.”
Cash and capital planning essential
Derek Gemmell of Anderson Anderson & Brown lauds the benefits of planning, saying discussions with businesses operating successfully show that cash management and preservation is critical. Writing in the Press and Journal, he says firms need to have a clear short and medium-term view of cash and working capital, identifying potential gaps early so that solutions can be found.
Unpacking the pre-pack review
Writing in the Press and Journal, Michael Reid of Meston Reid & Co looks at a Government review of pre-pack administration and changes draft regulations propose. He highlights a mooted change that would stop an administrator from selling any of the company’s property to a person connected with that company within the first eight weeks of its appointment without obtaining either prior approval from creditors or an independent written report.
Treasury’s Scholar: Debt could reach 105% of GDP
The Treasury’s senior civil servant, Sir Tom Scholar, says Government spending rolled out amid the coronavirus crisis could see national debt climb to 105% of GDP.
Permanent Secretary Sir Tom told the Commons Public Accounts Committee that while official forecasts from the Office for Budget Responsibility have yet to be released, the economy is likely to see the worst annual contraction in three centuries. Noting that the Bank of England last week said it expects the economy to have contracted by 11% year-on-year in 2020, he said: “It is extremely serious.”
UK economy sees biggest contraction among G7
Data from the Organisation for Economic Co-operation and Development (OECD) shows that the UK economy contracted more than that of any other G7 nation in the first nine months of the year, with GDP down 9.7% in Q3 compared to end of 2019. With many economies hit by the coronavirus pandemic, the next largest decline across G7 nations was in Canada, which saw a 4.7% contraction, with the US seeing the smallest contraction at 3.5%. Across the 36 OECD nations, GDP fell by 4.3%.
Public sector pay freeze planned
The Times’ Steven Swinford reports that the Chancellor is set to freeze the pay of almost 4m public-sector workers as part of plans to rebalance the books, with public finances hit heavily by the coronavirus pandemic. The Institute for Fiscal Studies think-tank said plans that would see 3.7m workers’ wages frozen would save £3.4bn. Rishi Sunak is said to be preparing to announce the pay freeze, which would exclude NHS workers, in next week’s spending review. Meanwhile, the Centre for Policy Studies think-tank has said freezing public sector pay could save the Treasury £23bn over the next three years, adding that excluding staff within the health service would mean the Treasury would instead save £15bn. It notes that adding a penny to the basic rate of income tax would raise around £16bn over the same period.
UK salaries up 1.7%
Private sector employees received a better-than-forecast average salary increase in 2020, with ECA International’s Salary Trends report showing an average increase of 1.7% – beating the 1.1% that had been forecast. The report uses a measure based on the difference between the nominal salary increase (2.5%) and inflation (0.8%). The report says UK workers picking up a pay rise in 2021 are set to see a 1.3% real salary increase. Across Europe, real terms salaries climbed 1.5%, with Ukraine seeing the biggest increase at 3.6%.
Covid-19 general news
The UK added 22,915 new cases yesterday with 501 deaths. bringing the totals to 1.45 million and 53,775 respectively.
With 650,433 new cases yesterday, Global cases reach 56.8 million. Deaths hit 1,361,411.
Vaccine developments remained in the headlines, with the latest update coming from a collaboration between the University of Oxford and AstraZeneca. The latest trial results have shown that the University of Oxford’s vaccine has been shown to trigger a robust immune response in healthy adults aged 56-69 and people over 70. This did little move Astra’s share price as investors await findings from the final phase of trials in the “coming weeks”.
The WHO advised against using remdesivir to treat covid-19. The antiviral was the first drug to be approved to fight the disease by America’s Food and Drug Administration; the WHO found no evidence it works.
The US hit a record 187,833 new cases yesterday. California’s governor imposed a 10pm curfew over most of the state
Tokyo had 500 new cases for the second day running.
Markets.
The vaccine inspired stock rally paused yesterday as shares across global equity markets traded lower, with New York announcing plans to shut schools and Japan registering record daily covid infections. London’s FTSE 100 gave up around 0.8% on the day (the 250 dropped 1%) , while shares in mainland Europe fared a little better. Wall Street was up, with tech stocks back in favour and supporting major indices. Overnight the DOW rose 0.15%, the wider S&P 500 rose 0.39% and tech stock NASDAQ rose 0.87%.
Oil prices gave up some of the recent gains amid rising Covid-19 cases, while the gold price was also lower, due to a stronger US Dollar which firmed up on hopes that a vaccine may speed up the economic recovery.
Brexit
Brexit Negotiations have been put on hold today after a member of the EU negotiating team tested positive for Covid. EU chief negotiator Michel Barnier said he and his UK counterpart Lord David Frost had decided to put talks on ice “for a short period of time”.
Government borrowing
UK Government Borrowing dropped sharply in October as companies and individuals required less economic support, with spending on the furlough scheme almost quartering. Public sector net borrowing came in at £22.3bn last month, down sharply from £28.6bn a month earlier. It was also well below what economists had been expecting
Retail
UK Retail Sales rose for the sixth consecutive month, smashing analysts’ expectations as Britons stocked up on goods ahead of new restrictions. In October UK retail sales volumes grew 1.2%, well ahead of the 0.0% expected. Volumes are 6.7% higher than in February.
Peacocks and Jaeger collapse
Retailers Peacocks and Jaeger have fallen into administration, with owner Edinburgh Woollen Mill Group (EWM) failing to find a buyer for the fashion chains. While no redundancies have been announced and no stores have closed, the collapse puts more than 4,700 jobs and almost 500 shops at risk. EWM said the “continuing deterioration” of the retail sector driven by the coronavirus pandemic has made the process of finding a buyer “longer and more complex” than it would have hoped. Tony Wright of FRP Advisory said Jaeger and Peacocks are “attractive brands”, adding that administrators are in advanced discussions with potential buyers and “working hard to secure a future for both businesses.”
Nightclub owner asks for rent holiday
Deltic Group, the UK’s largest nightclub operator, has asked for a break from rent payments, warning that it is likely to collapse unless a sale can be agreed. Deltic put itself up for sale after extended closures during the coronavirus pandemic threatened to force it into liquidation. BDO , which is advising Deltic on the sale process, is reportedly set to select a preferred bidder in the coming days.
Cineworld mulling CVA
Cineworld is considering putting its business in Britain through a CVA as part of a wider restructuring, a move that would see the world’s second-largest cinema operator seek lower rents and possibly close some of its 127 UK screens. In addition to exploring a CVA, Cineworld is in individual discussions with landlords over possible rent cuts.
Royal Mail
Royal Mail remained bullish on its future as a parcel delivery firm, despite reporting on Thursday that interim profit was reduced to just one-tenth of the year-earlier level on a range of costs. Revenue for the half-year to September 27 amounted to £5.67 billion, up 9.8% on a year ago. However, pretax profit dived 90% to £17 million from £173 million, and the firm posted an operating loss of £20 million versus a profit of £61 million a year prior.
Minimum alcohol pricing would hit tax take
The Institute for Fiscal Studies has analysed the impact of Scotland’s minimum alcohol pricing scheme and calculates that if the 50p minimum unit price were extended to the whole of the UK under the existing system of alcohol taxes, tax revenue would fall by around £390m per year.
Chancellor urged to resist CGT ‘tax raid’
The Daily Mail’s Alex Brummer says that while the Chancellor will recognise the need for measures to address the state’s coronavirus bill, he must also recognise that the “worst possible way” of doing so would be to impose “swingeing” taxes. Pointing to an Office for Tax Simplification recommendation that would see capital gains taxed at the same rates as income, Mr Brummer says this would “stifle recovery and prosperity” by driving up taxation on enterprise and entrepreneurship, while trimming back tax-fee allowances would hit middle-income workers. He argues that increasing the CGT burden of capital gains on enterprise, savers and second property owners would “destroy the economy’s dynamism.”
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs, with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
You put up with the PAIN – now claim the GAIN!
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an extra bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.