Manufacturing insolvencies hit 5 year peak and other business news

19th November 2019.

James Salmon, Operations Director.

Manufacturing insolvencies, the minimum wage, politicians attempt to woo business, restaurants serve up a loss, Brits are top Xmas spenders, Economy set for tech boost and UK leads on decarbonisation.

Manufacturing insolvencies hit 5 year peak

Manufacturing insolvencies have reached their highest level in five years in the last 12 months, rising 7 percent to 1,466 from 1,373 in the previous year.

Accountancy firm Moore have released research finding that a combination of uncertainty over Brexit and a slowdown across Europe responsible for the increase.

Moore said that there were increased levels of concern about future financial provisions that businesses might need in a post Brexit environment,  and therefore UK customers  have deferred major purchasing decisions.

There are also concerns from UK businesses that European manufacturers are looking to cut UK-based companies out of their supply chains to guard against issues under the possibility of a no-deal Brexit.

The combination of tariffs and shipping delays that no deal would incur would dramatically increase costs of UK-made components.

According to IHS Markit, UK manufacturing orders fell for the sixth month in a row in October, whilst in June the CBI reported that a third of UK manufacturers had received fewer orders than normal.

Robert Branch, managing partner at Moore South West, said:

“The latest figures show that the doom and gloom around the UK’s manufacturing sector continues. UK manufacturers should be going through a period of heavy investment in order to close their productivity gap with competitors in places like Germany. Instead many are having to save as much cash as they can to tide them through until order books recover, as banks and other finance houses are indicating that they will be reluctant to provide additional funding to support working capital.”

The fluctuations in the value of sterling have only added to the problem, with the reduction in the price of UK exports offset by increased input costs as manufacturers buy in components from outside the UK.

Rob Dobson, director at IHS Markit, said that the future for UK manufacturing looks “even darker” than October’s numbers suggest.

“The high degree of uncertainty is hitting two areas of the manufacturing economy especially hard. The first is the trend in employment, as job losses resulting from disappointing sales are exacerbated by manufacturers implementing hiring freezes until the outlook clears.

“The second is the investment goods industry, where output and new orders are falling sharply as clients postpone capital spending plans.”

Branch finished: “As we get towards a Brexit deal the outlook for manufacturers should become clearer.”

More sign that UK’s manufacturing sector struggling

A survey by the British Chambers of Commerce back this up. suggesting most manufacturing exporters are reporting a “stark worsening” in sales and orders.

Meanwhile, a separate study by BDO shows that investment by manufacturing businesses has fallen to its lowest level in four years.

Its not much better in Germany

Germany managed last week —barely—to defy expectations that it would enter a recession, by recording growth of 0.1% in the three months to the end of September. Higher household and government spending offset a downturn in the country’s export-focused manufacturing sector.

The Ministry for Economic Affairs said “The relevant economic indicators are not yet indicative of fundamental change in the economic situation but there are slight glimmers of hope”.

German exporters have faced a tough environment in recent months due to Brexit uncertainty, US-China trade tensions and a downturn in the domestic automotive industry.

Will we see an increase in the minimum wage?

Plans set out by both the Conservatives and Labour would take minimum pay to an all-time high and dramatically increase the share of private-sector employees affected, according to a report  from the Institute for Fiscal Studies.

While there’s no evidence that recent minimum-wage rises hurt employment prospects, there’s now a risk of triggering a “tipping point,” the IFS said.

Prime Minister Boris Johnson and Labour leader Jeremy Corbyn should avoid getting into “a political bidding war” over wages, the institute says.

The Federation of Small Businesses (FSB) has warned that a pledge to raise the minimum wage to £10.50 made by the Prime Minister could put a number of small firms at risk, as would the rise from £8.21 an hour for over-25s.

The body has also called for a minimum £1,000 increase in the Employment Allowance, saying it would help with the cost of employing people and offset the increased wages companies will have to pay.

The FSB’s Back to Business manifesto also urges the next Government to extend maternity and paternity pay to self-employed workers who choose to adopt.

FSB national chairman Mike Cherry said: “We are urging all candidates standing at this election to listen to, and make every effort to understand, the challenges faced by small firms in the communities they hope to represent.”

Politicians attempt to woo business

Yesterday several party leaders spoke to the CBI, a group representing business interests. The audience didn’t appear to enjoy what the two big parties were proposing.

The Prime Minister has announced that planned cuts to corporation tax are to be put on hold. The rate paid by firms on their profits was due to fall from 19% to 17% next April but Boris Johnson said the potential £6bn cost would be better served going on “national priorities” such as the NHS.

Mr Johnson told the Confederation of British Industry (CBI) conference that the UK already had the lowest rate of corporation tax of “any major economy”, highlighting that corporation tax had already fallen from 28p to 19p in the pound since 2010, adding that further cuts would be “postponed”.

He added that the move comes as the Conservatives “believe emphatically in fiscal prudence”.

Mr Johnson also said the Tories plan to lower business rates, saying a reduction – “particularly for SMEs” – will boost the high street.

He also said employers’ national insurance contributions – which he described as a “jobs tax” – will come down.

Elsewhere at the CBI event, Labour leader Jeremy Corbyn said his party would reform business rates if elected.

He also suggested Labour could raise corporation tax from 19% up to “2010 levels”, when it stood at 28%.

Lib Dem leader Jo Swinson said she would scrap business rates, replacing the system with a levy on landowners.

She added that abolishing business rates would cut taxes in 92% of local authority areas and help re-balance the economy.

Speaking at the Confederation of British Industry conference, Jeremy Corbyn said a Labour government would deliver an “investment blitz” that would create “immense” opportunities for businesses.

Describing suggestions he is anti-business as “nonsense”, Mr Corbyn said: “ It’s not anti-business to say that the largest corporations should pay their taxes just as smaller companies do.”

He also suggested Labour’s Brexit policy would provide “the certainty of a customs union and access to the single market”.

Stuart Carrington of Thomas Westcott said that while he did not believe Mr Corbyn’s Brexit stance would end the uncertainty hanging over businesses, “I don’t believe that Boris Johnson can deliver a sensible approach either.”

Mike Cherry, national chairman of the Federation of Small Businesses, praised Mr Corbyn’s “very positive” decision to put reforming business rates and dealing with late payments “at the top” of Labour’s business policy programme.

Restaurants serve up a loss

UHY Hacker Young research shows that the UK’s top 100 restaurants swung to a collective loss of £93m in the last 12 months, with rising overheads and falling sales hitting the sector.

This compares with profit of £37m reported the year before

Brits are top Xmas spenders

Britons are set to be Europe’s top spenders this Christmas, with a study from Deloitte suggesting UK shoppers will spend an average of £567 each this Christmas.

This total is 39% higher than the European average of £409 and includes £299 on presents and £143 on food and drink.

The average spend is up 1.3% on last year’s figure.

The survey found that a third of UK shoppers plan to buy most of their presents in November, while three in five said they preferred to shop for Christmas presents in stores.

Economy set for tech boost

Virtual reality (VR) and augmented reality (VR) technologies are forecast to add £62.5bn to the UK economy in the next decade.

Research from PwC suggests that more than £44bn of the 2.44% injection to UK GDP will come from AR, with VR to provide over £18bn as businesses embrace innovation.

On a wider scale, VR and AR could add £1.4trn to global GDP in the next 10 years, the report suggests.

UK leads on decarbonisation

PwC ‘s low carbon economy index shows that the UK comes out top for decarbonisation rates within G20 countries since 2000.

However, its annual rate of 3.7% is well short of the 9.7% required if it is to achieve its 2050 net zero emissions pledge.

Do you sell on credit to manufacturers?

With rising manufacturing insolvences it is essential that you stay on top of the credit limits you grant manufacturing customers and watch carefully for any late payments.

Those manufacturers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your manufacturing 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.

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.

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

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

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 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

Keep up to date with the latest news by following us on social media:-

CPA on Linkedin

CPA on facebook

CPA on twitter

See all our latest news here!

Housekeeping: Opening a New Account

Late payments are never good for business. What can you do?

Get paid earlier by understanding why late payments happen.

Protecting Your Business isn’t Half As Painful As You Think

The Good, the Bad and the Ugly – recognising the types of payers you do business with!

See our blog on how to communicate with your debtor early and clearly to set the framework for prompt payments

Everything You Always Wanted To Know About Debt Recovery (But Were Afraid To Ask)

Understand the “why” behind late payments

Read our blog on what to do when not paid on time

10 Bad Habits Every Credit Controller Should Give Up

The Credit Controller’s Best Friend

Debt Recovery: It’s Easier Than You Think!

How Managing Your Cash Flow Can Make You (and Your Business) A Success

Avoid insolvency – Don’t let your money go up in smoke

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

How to overcome 25 of the most common excuses for non-payment

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog – How to select a debt collection agency

20 ways to avoid identity theft

see our blog – 15 steps to avoid invoice fraud

Overcoming 5 common reasons for disputed invoices

As insolvencies rise, could you spot these warning signs in your customers?

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections