Business News for those selling on Credit

30th July 2019.

Threat of no-deal sends pound to 28-month low

A hardening of rhetoric from the Boris Johnson government over Brexit pushed the pound to a 28-month low against the dollar on Monday.

Sterling dipped 1.1% to $1.2242 and €1.1004, with analysts at ING Group now assuming an early election will take place and that the pound will sink as low as $1.18 and €1.05.

Johnson’s “Boosterism” a winning formula

Good news for suppliers to large contractors.

A senior City source has told the Mail that Boris Johnson has described his economic philosophy as “Boosterism” – a vision that observers say equates to a Blairite enthusiasm for infrastructure spending coupled with a Thatcherite belief in the power of tax cuts to stimulate the economy.

The paper cites plans already outlined by Johnson for infrastructure spending and adds that he is also considering a £100bn plan put forward by Sajid Javid for investment to help bridge the North/South divide.

The PM has also commissioned work on plans to raise the starting threshold for paying National Insurance to £12,500, at a cost of £11bn a year.

This comes after a pledge to raise the starting threshold for paying 40p tax from £50,000 to £80,000 and a review on stamp duty, which could see the tax being scrapped for properties worth less than £500,000. Tory MP Robert Halfon said the PM’s plans were a “winning formula”.

Global growth forecast cut by IMF

How worrying news globally.

Last week the IMF has cut its growth forecasts for the global economy for this year and next.

It predicts growth of 3.2% in 2019, down from its April forecast of 3.3%. Growth next year is set to pick up to 3.5%, although that is below its earlier forecast of 3.6%.

The IMF has raised its growth forecast for the UK this year to 1.3% from 1.2%. The revision for the UK reflects what the report calls a stronger-than-expected first three months of the year, boosted by pre-Brexit stockpiling.

However, the IMF’s World Economic Outlook analysis has named a no-deal Brexit among the chief threats to the world economy.

Manufacturing output lowest since financial crisis – CBI

Do you supply manufacturers?

The Confederation of British Industry has published figures showing that British manufacturing output shrank at the fastest pace since the financial crisis over the last quarter.

With 19% of manufacturers reporting that output increased and 30% saying it fell, this gave output a minus 11% balance for the three months to July.

CBI chief economist Rain Newton-Smith remarked that the sector is “being hit by the double-blow of Brexit uncertainty and slower global growth.”

UK mortgage approvals rise

Do you supply the home improvement market?

They normally do well when home sales pick up so the following will be positive news.

The number of mortgage approvals hit 66,400 in June, up from 65,650 in May, according to the Bank of England’s latest data, above economists’ expectations and the highest number since January.

Howard Archer, an economist at the EY Item Club, said the reprieve from a disruptive Brexit in March, together with better consumer purchasing power and strong jobs growth, had helped, although the “overall benefit has been relatively limited”.

However, annual lending growth to UK consumers slowed to 5.5% in June, from 5.7% in May, the slowest rate since April 2014.

Sales slide continues

Do you supply retailers?

Retail sales have fallen for the longest period in eight years, according to the Confederation of British Industry’s (CBI) monthly sector survey, with sales volumes down for the third consecutive month in July – the longest decline since 2011. Out of 46 retailers that responded, 26% said their sales were up compared with a year ago and 42% said sales were down, giving a balance of -16%.

Rain Newton-Smith, chief economist at the CBI, voiced concern over the figures, commenting: “The UK economy has reached a fork in the road. The new Prime Minister must now do everything in his power to achieve a good Brexit deal, thus protecting jobs and our economy.”

Howard Archer, chief economic adviser to the EY ITEM Club, suggested the survey may be too pessimistic, noting that its findings were at odds with a healthy rise in sales reported by Government statisticians. He added a warning that consumer spending may fall, with Brex it uncertainty and slowing employment and pay growth potentially having an impact.

Household incomes hit record high 27/7

Suppliers of discretionary goods and services to consumers will be happy.

Rising wages, more jobs and lower taxes combined to boost take-home pay by £400 per household last year, leaving families better off than ever before.

Average disposable household income rose to £29,400 in the financial year ending in March, according to the ONS, an increase of 1.4% above inflation.

Over the past decade real household incomes are up just over 8%. Wages growth accelerated to 3.4% on the year in May, whereas prices rose by just 2%.

Tougher sanctions in sight for late payers

A consultation on the future of the Prompt Payment Code (PPC) will be launched by the end of the year after it failed to properly tackle late payments.

The PPC is administered by the Chartered Institute of Credit Management but is likely to be transferred to the small business commissioner, sources told the Sunday Times.

The commissioner was last month given the authority to impose fines, which should accelerate compliance with payment standards. 

No summer break for SME owners

SMEs are finding things tight.

A survey by Hitachi Capital Business Finance has found that almost 40% of small business owners will not have a holiday this summer due to a lack of money, time and fear of being away from the business.

It also found that two-thirds of SME owners said that they had taken fewer than 20 days’ holiday, the legal requirement, over the past 12 months. “Business success is about more than just the balance sheet,” Hitachi managing director Gavin Wraith-Carter said.

Jobs boom continues despite slow growth

The latest data from the British Chambers of Commerce shows nearly a third of companies plan to hire more staff in the next three months, indicating that slowing growth had little impact on employers’ intentions.

The CBI’s growth indicator survey also showed that the strong jobs market is unaffected by weakness elsewhere. However, almost two-thirds of firms are struggling to recruit employees, with the construction and hospitality sectors finding it particularly difficult.

Interest rates expected to remain on hold

Are you affected by interest rates?

Commenting ahead of this week’s MPC meeting, Howard Archer, chief economic adviser to the EY Item Club, says the Bank of England is likely to keep interest rates at 0.75% throughout the rest of 2019 and well into 2020.

CBI says EU has taken ‘fewer steps’ than UK to offset no-deal Brexit 

Do you sell into Europe?

A CBI report claims the EU is less prepared for a no-deal Brexit than the UK, a situation that could leave British firms at a disadvantage because “EU goods and services exports will have easier access to the UK than UK goods and services exports will to the EU.”

Despite the UK’s efforts, however, the CBI said there were no areas of the economy that would not suffer major disruption and economic pain for “the next decade and more” in the event of a no-deal Brexit.

But in a significant shift in tone Dame Carolyn Fairbairn, the director-general, writes in the Times that businesses are ready to face up to the “daunting new reality” of Brexit, given the PM’s stance.

The Telegraph notes that the CBI’s warnings echo those of the Bank of England, which said the risks that remain from no-deal come from the EU side, raising the possibility that businesses and households on the continent w ill be cut off from their banking, insurance and other financial services based in London after Brexit.

R&D tax credits could lessen pain for SMEs preparing for Brexit

Allie Renison, head of European and trade policy at the Institute of Directors (IoD), considers the complexities facing businesses preparing for Brexit.

She says at least a third of IoD members say they can adjust only after they know what no-deal looks like and that although there is no silver bullet the Government could do two things to help.

Firstly, a voucher scheme would help SMEs access approved legal, tax and professional services and offset the cost of compliance and planning advice. Secondly, the Chancellor could make Brexit planning tax deductible by expanding the scope of R&D tax credits to cover certain preparations, or by creating a new type of tax credit.

Self-employed at risk of underpaying tax due to HMRC glitch

Watch that business cash flow.

An HMRC glitch could mean self-employed people are at risk of underpaying their tax bill on 31st July, according to Moore Stephens.

HMRC may have incorrectly reduced the amount or may not have issued taxpayers with a reminder at all, meaning self-employed taxpayers will have to pick up the bill in January 2020.

Partner Lucienne Parry said: “In some cases, we have seen individuals being wrongly sent automatic refunds from HMRC, which will need to be repaid.

Those impacted are going to think it very unfair that an HMRC error could lead to interest charges and in some cases potential surcharges.” A similar glitch occurred in January 2019 but then HMRC assured taxpayers that they would not be charged additional interest.

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 you 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.

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.

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

New warning over catastrophic effects of late payments

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

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See all our latest news here!

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