Businesses hold insufficient reserves – business news 19 October 2020.

James Salmon, Operations Director.

Businesses hold insufficient reserves,  finance chiefs expect slower recovery, BOE Governor warns of risk and uncertainty,Business leaders say economy not ready for no-deal, SMEs positive on Q4 conditions,  ‘Covid generation’ face jobs crisis,  covid-19, 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.

Businesses hold insufficient reserves

UK businesses are running their finances too tight and their  insufficient reserves mean they have set enough aside for a rainy day.

With University of Sheffield research showing that 28% of FTSE 100 companies spent more in dividends and on buying their own shares in the last financial year than they generated in net profits, professor Adam Leaver, who led the research, said paying out “too much to the shareholders … has left firms with too little in the way of reserves to manage this situation or indeed any potential downturn”.

Figures from the Office for National Statistics suggest 41% of UK businesses have less than six months of cash reserves, compared with 34% which have more than six months, while more than a fifth are unsure how much they have. Mr Mustoe points to Financial Reporting Council research showing that investors would like more disclosure on reserves and the affordability of dividends as these firms are clearly holding insufficient reserves

Firms with insufficient reserves are more likely to have been hit by covid and vunerable to other market shocks. Insufficient reserves can lead to poor cash flow and insolvency is something goes wrong.

A month-on-month rise in the number of corporate insolvencies in England and Wales may indicate that businesses which were healthy and profitable pre-COVID-19 are now starting to struggle.

Government’s Insolvency Service figures show that the number of companies entering insolvency increased to 926 in September 2020 compared to August’s figure of 784.

R3 Midlands chair Eddie Williams, a partner at Grant Thornton in the East Midlands, said: “The latest statistics are something of a reversal of a downward trend in corporate insolvency numbers post-lockdown and have been driven by an increase in the number of Creditors’ Voluntary Liquidations and, to a lesser extent, Company Voluntary Arrangements. The figures are only now beginning to demonstrate the toll that COVID-19 is taking on once-healthy businesses, with many companies profitable at the start of the year starting to struggle for the first time due to the pandemic.”

Despite the increase in corporate insolvencies, the monthly statistics remain lower than those recorded before the lock-down and do not fully reflect the state of businesses and the economy.  Due to the recent extension of a number of the Government’s temporary insolvency measures, and with the announcement of plans to continue supporting COVID-hit businesses and individuals, many insolvent businesses have been able to delay  insolvency for now.

However, the economy remains 9% below pre-pandemic levels, despite growth of 2.1% in August, and has failed to recover from its significant contraction when the lock-downs first hit.

Like a game of dominos, once insolvencies start to rise among UK businesses, a lot of otherwise healthy firms could be knocked down as their customers and key suppliers go insolvent.

Firms need to be cautious about overly extending credit and need to monitor their risks, more than at any other time.

Finance chiefs expect slower recovery

A survey from Deloitte shows that finance chiefs believe the return to business as usual following the coronavirus crisis will take longer than they previously forecast.

Over the last three months FTSE 100 and FTSE 250 chief financial officers have altered their expectations for a full recovery in business demand. At the end of June, 10% of CFOs said that demand had already returned to pre-pandemic levels, while 41% expected it to return to normal by the end of June 2019 and 49% said they thought a recovery would take longer.

Although the poll at the end of September saw 18% say demand had returned to normal, the proportion expecting a return to pre-pandemic demand before next June had slipped to 21%, with 61% saying they expect it to take longer.

Ian Stewart, chief economist at Deloitte, said businesses are “gearing up for a long winter … with a full recovery on the horizon only after next summer.” Suggesting that businesses expect a “longer haul back” for activity, he added that with new restrictions being rolled out, “businesses have scaled back expectations and are focused on strengthening their businesses and their balance sheets.”

The poll also shows that CFOs expect to retain, on average, 82% of staff that utilised the furlough scheme; while 79% said their business was facing high or very high levels of uncertainty; and 78% felt capital expenditure would fall over the coming year, down from 86% earlier in the year.

Pandemic drives profit warnings to record high

EY analysis shows that the record for the most profit warnings issued in a single year has been broken after just nine months, with the coronavirus crisis driving a surge. The report says companies listed on the London Stock Exchange have issued 524 warnings, exceeding the 501 record seen in 2001. The study shows that 449 of these were due to the pandemic. Alan Hudson of EY says the pandemic and Brexit are likely to make autumn and winter “exceptionally difficult” for UK PLC

Bailey warns of risk and uncertainty

Bank of England Governor Andrew Bailey has warned that there is a significant risk of economic growth being hit, noting the uncertainty that the increasing number of coronavirus cases brings. With the economy shrinking 20% in Q2, Mr Bailey has said he expects output to be down 10% in Q3 when compared to where it was at the end of 2019.

Speaking during an online seminar for central bank governors yesterday, he said 10% is “still a huge gap”. He went on to say: “We’re operating at an unprecedented level of economic uncertainty. Of course, that is heightened now by the return of COVID…. The risks remain very heavily skewed towards the downside.”

Mr Bailey also commented on below-zero interest rates, saying: “Our assessment of negative interest rates, from the experience elsewhere, is that they probably appear to work better in a more wholesale financial market context, and probably better in a nascent economic upturn”.

Business leaders: Economy not ready for no-deal

With the Prime Minister suggesting that Britain may exit the EU with no trade deal in place, business leaders have voiced concern that Britain’s economy is ill-prepared for a no-deal Brexit.

PM Boris Johnson said on Friday the Brexit talks have now concluded, saying there was no point in discussions unless the EU was prepared to discuss the “detailed legal text of a partnership”.

Johnson said the UK had to get ready to trade with the EU without the benefit of a trade deal as a “third country” in a manner similar to that of Australia. There was little response to the PM move with many suspecting the UK withdrawal was a ploy.

Carolyn Fairbairn, director-general of the CBI, said: “After four years of negotiations and so many hurdles crossed, this is no time to give up.” She argues that a deal is “the only outcome that protects Covid-hit livelihoods at a time when every job in every country counts.”

Mike Cherry, the national chairman of the Federation of Small Businesses, said firms are not ready for a no-deal Brexit, noting that the transition period ends in just ten weeks. With businesses being told to prepare for Brexit at a time when many are having to navigate fresh coronavirus restrictions, Mr Cherry said many “simply don’t have the time or money to make adjustments, even if they want and need to.”

The Organisation for Economic Co-operation and Development has warned that a no-deal scenario would leave the UK economy 6.5% lower in the next few years than if existing arrangements with the EU had remained.

Businesses call for trade deal

With trade talks seemingly stalling and the Prime Minister suggesting Britain will ready itself for a no-deal Brexit once the transition period concludes, more than 70 British business groups representing over 7m workers have called for the UK and EU to return to the negotiating table.

In a joint statement, business groups including the Confederation of British Industry, TheCityUK and the British Retail Consortium said: “Now is the time for historic political leadership … With compromise and tenacity, a deal can be done.”

Elsewhere, BusinessEurope, the body representing European industry, offered a similar stance, with director general Markus Beyrer saying: “An agreement is still possible and it is the only way to avoid uncertainty and major disruption.”

Firms urged to step-up Brexit preparations

The Government has launched a new “Time Is Running Out” advertising campaign telling businesses to prepare to trade on World Trade Organisation terms at the end of the Brexit transition period.

The public information campaign says firms should look at a number of issues, with ministers advising UK businesses to consider whether they are ready for new customs procedures; whether they will need a visa or work permit for travel to the EU; the new immigration system; the use of personal data received from European countries; and whether any qualifications held are valid for the provision of services to EU clients.

Meanwhile, HMRC is writing to 200,000 firms that trade with the EU to set out the new customs and tax rules and how to deal with them.

SMEs positive on Q4 conditions

Research by Hitachi Capital Business Finance has found that 73% of SMEs believe that conditions will either improve or stay the same during Q4, an increase of three percentage points on the previous survey. The poll saw 27% of smaller firms say they foresee growth in the period, up from 14% during the lockdown but down on the 36% in a poll before the outbreak. Joanna Morris, head of insight at Hitachi Capital, said: “Our data suggests small businesses are reacting positively to the current circumstances”.

‘Covid generation’ face jobs crisis

Research from a leading labour-market expert suggests up to 1m young people are set to be hit by a jobs crisis on the back of the coronavirus pandemic. Paul Gregg, professor of economic and social policy at Bath University, said 16-to24-year-olds who are not in full-time education or employment will face significant barriers to work when the furlough scheme ends this month. The report warns that without broader support from ministers, a “Covid generation” who will struggle to find work will be created. It warns that, on top of the furlough scheme winding down, the scarcity of new positions and the arrival of school and college leavers in the job market will hit young people’s prospects

Inflation expected to hit 0.4%

With official statistics due out this week, it has been forecast that inflation will climb to 0.4%, with the Consumer Prices Index (CPI) for September set to reflect the end of the Eat Out to Help Out scheme. Forecasts from EY Item Club, which uses the Treasury’s computer model of the economy, suggest the modest increase – from August’s 0.2% – will be followed by a more substantial increase in 2021. On average, economists predict the CPI to rise from 0.8% this year to 1.5% next year.

Nine in ten must learn new skills, says CBI

The Confederation of British Industry (CBI) says nine in ten workers will need to learn new skills or be retrained entirely over the next decade. In a report based on analysis by management consultancy McKinsey, the CBI says more than 30m people will need to reskill by 2030, with this costing an additional £13bn a year. The CBI is calling for the apprenticeship levy to be replaced with a “flexible skills and training levy” – and has also suggested the introduction of a training tax credit. Dame Carolyn Fairbairn, CBI director-general, said: “A failure to act will leave businesses facing skills shortages and workers facing long-term unemployment.”

Furlough fears over tribunal increase

The number of employment tribunals involving individuals increased by almost 20% between April and June 2020, with employment experts suggesting the increase may be linked to confusion over the furlough scheme. Tim Hayes, a legal director in the employment law team at BDB Pitmans, comments: “The rise in tribunal claims is causing increasing concern among both employers and claimants.” He adds that it is “highly likely” numbers will continue to rise as the full impact of the COVID-19 pandemic “filters through to workplaces up and down the country”.

Covid-19 general news

Global cases top 40 million as deaths exceed 1.1 million. It took six months for the worldwide tally to reach the first 10 million, but subsequent milestones have come increasingly faster, with the latest 10 million added in just 32 days.

In the UK 16,982 cases were reported on Sunday, raising totals to 722,409.

Local leaders in the north of England rejected plans by the government in London to impose stricter limits on socialising without better financial support for businesses. Prime Minister Boris Johnson warned he will have no choice but to impose the toughest level of pandemic restrictions on Manchester, unless the city’s mayor backs down and agrees to new curbs

Britain needs an immediate three-week national lockdown as opposed to more limited regional restrictions, said Jeremy Farrar, a scientific adviser to the government. “The current tiered restrictions will not bring the transmission rates down sufficiently or prevent the continued spread of the virus,” he told Sky News on Sunday.

The World Health Organisation has said that Remdesivir has “little or no effect” on C-19 survival chances. The drug was proscribed to US President Donald Trump when he was in hospital. Gilead Sciences rejected the WHO statement

On Sunday Italy registered 11,705 new cases, a daily record for the country. France reported 29,837 new coronavirus cases in the past 24 hours

Ireland is set to introduce some of the toughest curbs in Europe in a renewed effort to curtail the spread of the coronavirus. The Government look set to raise lockdown to level 5 which would see non-essential stores shuttered, all bars closed and travel restricted to within 5 kilometers or 3.1 miles of one’s home.


On Friday the FTSE 100 climbed 1.5%. and markets are in positive territory this morning. In the US the S&9 500 was flat while the NASDQ fell 0.36%.

The oil price fell on Friday, dragged down by concerns that a spike in COVID-19 cases in Europe and the United States is curtailing demand in two of the world’s biggest fuel consuming regions, while a stronger U.S. dollar also pressured prices.  The Gold price steadied in a tight range above $1,900 on Friday, tracking a subdued dollar, but fading chances of an U.S. stimulus agreement before the presidential election kept bullion on track for its first weekly decline in three.

US Economy

America’s budget deficit, the gap between government spending and tax revenue, surpassed $3.1trn in the year to September. That compares with about $1trn last year and reflects the huge increase in spending precipitated by the pandemic. Jerome Powell, chairman of the Federal Reserve, has said another round of economic relief is needed to prevent millions falling into poverty.

America’s retail sales, meanwhile, increased by 1.9% in September, more than the 0.7% that analysts had expected. Sales are now higher than they were in February, before the pandemic


China’s economy expanded 4.9% year-on-year in the third quarter, missing expectations but storming ahead of other nations still suffering the economic fallout from the pandemic. Chinese GDP continued its recovery between July and September, marking a second consecutive quarter of growth following a 3.2% hike in the second quarter.


The European Union Aviation Safety Agency (EASA) has said the Boeing 737 Max is safe and return to operations in 2020

End of free banking if rates turn negative?

David Duffy, the boss of Virgin Money, has warned that banks could start charging for basic services if interest rates turn negative. He said banks would make “slow and incremental” changes to test which services customers are willing to pay for. Isabelle Jenkins, head of banking at PwC, comments: “Anything is possible now on negative interest rates. Banks make money in the difference between what they make on lending, and what they pay for savings. And we’ve seen those revenues squeezed considerably. So a lot of banks are having to look at other ways to make money and one of the ways to do that is fee-based accounts.”

Banks pull low deposit deals

Home buyers face having to stump up more toward buying their property after TSB withdrew two-year mortgage deals requiring a deposit of less than 40%, while Barclays has ended mortgages for borrowers with less than a 25% deposit. The moves mean no high street banks are currently offering mortgages for those with equity under 15%. Bank of England analysis shows that the cost of the average five-year fixed mortgage has risen from 2.26% to 2.62% since June, with the typical two-year deal climbing from 2.02% to 2.38%. It was also found that September saw the biggest monthly increase in mortgage rates since 2009.

Reflecting on retail

The Sunday Times considered the climate for retailers, citing research by the Local Data Company and PwC showing that 11,120 shops that were part of chains closed between January and August, while only 5,119 opened.

Retail shift delivers the ‘new normal’

The Times looks at how a change in shopping habits has driven a record number of retail closures, with the coronavirus lockdown accelerating a shift away from physical stores.

This comes after a report from PwC and the Local Data Company showed that Britain lost 6,001 more chain stores than it gained in the first half of 2020, up from a loss of 3,509 in H1 2019.

Lisa Hooker, consumer markets leader at PwC, said that while it was clear that consumers were shifting to shopping online or changing their priorities in terms of the things they buy, the coronavirus crisis has created “a step change in these underlying trends to where they have now become the new normal. ”

Women and lower-paid hit hardest

Research from the Centre for Economic Policy Research (CEPR) suggests that women and lower paid workers have seen the biggest decline in productivity due to the national lockdown. These groups, who are more concentrated in the sectors where working from home is difficult, report lower productivity at home, on average. Sectors where productivity has seen the biggest increase amid the coronavirus lockdown included more male-dominated ones, such as IT and finance. The study also found that people who said they get much less done at home “report declines in wellbeing comparable to the effect of an unemployment shock”.

Tax warning for remote workers heading overseas

Tax advisers have issued a warning to Brits thinking of taking advantage of the increasing shift to remote working and opting to work from sunnier climes this winter, advising that they may face fines or investigations from foreign tax authorities if they stay too long, become resident in a foreign country for tax purposes and fail to declare their UK incomes. EY’s Stephanie King offers a warning over income tax in countries where no tax treaty with Britain is in place, while Robert Salter of Blick Rothenberg notes that even moving between nations within the UK could add to a tax bill.

16% of self-employed pay into pension pot

Just 16% of Britain’s self-employed workers are saving into a pension, according Institute for Fiscal Studies (IFS), a marked decline on the 48% recorded in 1998. This equates to more than 3.5m people of working age who are not putting money aside into a private pension. For those not paying into a pension fund, the most common reason given was affordability, with a lack of trust in pension firms and not understanding how pensions work also common reasons. In contrast, automatic enrolment, rolled out in 2012, has increased the number of employees saving into a pension, with nearly 80% of working-age employees contributing to a scheme in 2018. Mike Cherry, national chairman of the Federation of Small Businesses, said the “worrying” IFS figures highlight “yet another area where the self-employed don’t enjoy the same benefits as employees”.

Lockdown drives London exodus

Lock-down has triggered an exodus to the countryside as working from home has made proximity to towns and cities less vital. A PwC report shows that 34% of 45-to 64-year-olds living in London “expect to move to a different region, outside of London, the next time they move” – 16% up on the number seen in a pre-coronavirus poll.

End of stamp duty holiday to hit buyers

Up to 200,000 people risk missing out on stamp duty savings because of backlogs in the property market, with people agreeing a sale by next week said to only have a 50% chance of benefitting from the stamp duty holiday rolled out amid the coronavirus crisis. According to Centre for Economics and Business Research analysis, the tax break has boosted transactions by 6%. With the relief set to end on March 31, there are calls for an extension, with Vic Darvey, chief executive of Purplebricks, saying a further six to 12 months of the stamp duty holiday will “allow the pent-up demand to progress through the system,” while housebuilders Barratt and Redrow say an extension will help avoid a slump in sales.

Campaigners say rates system penalises the North

A number of Conservative MPs have called for a reform of business rates, saying they penalise the North. They have questioned why the rate is uniform across the country, arguing that it leaves northern stores facing a bigger rates burden. Analysis from political consultancy WPI Strategy supports the claim, highlighting that 77% of constituencies facing the highest rates burden are in the North and Midlands. The MPs, along with think-tanks Onward and the Northern Policy Foundation, are calling for an overhaul that would level out the imbalance. Dehenna Davison, MP for Bishop Auckland, said that if businesses are to bounce back “we must look at the financial inequality presented by business rates”, while Mansfield MP Ben Bradley added: “A reduction in business rates could be a lifeline for our high streets. ”

‘Unprecedented’ number of UK businesses seek rate cut

Property consultancy Colliers International says 170,000 businesses have started appeals against business rates since the coronavirus crisis started, more than the 159,000 queries recorded over the last three years combined.

Big Four’s income increases

The Big Four saw income from auditing rise by 6.9% to £2.3bn in 2019, the Financial Reporting Council’s (FRC) annual review of the sector reveals. This far exceeds the 1.7% increase recorded a year before. Overall fee income was up 7.1% among the Big Four, with fee income for non-audit work falling 20.8%. The FRC said the decline in non-audit fees points to the impact of restrictions designed to separate the accountancy firms’ auditing and consultancy activities. Outside the Big Four, firms saw fee income decline by 0.1%, although audit income was up 2%. The report also shows that Deloitte, PwC, EY or KPMG audited all FTSE 100 listed firms, while all but 10 companies in the FTSE 250 were audited by a Big Four firm – up from nine the year before – with Grant Thornton and BDO both having audit clien ts listed on the index. David Rule, the FRC’s executive director of supervision, said improving choice and resilience in the market remains a “major focus” for the regulator ahead of government-led reform of the sector and an operational separation of the Big Four’s audit practices.

Pension funds say FRC is ‘compromised’

The Local Authority Pension Fund Forum (LAPFF) has suggested that the Financial Reporting Council (FRC) is compromised by its links to the Big Four. Doug McMurdo, chairman of the LAPFF, has written to the FRC, accusing it of being “a creature of regulatory capture and compromised with the Big Four accounting firms”. He also claimed that the regulator supports revised international accounting standards that are less robust than those required by UK law. Mr McMurdo has also written to the Business Select Committee, saying that investor groups which support the international accounting standards “tend to be a less than qualified group … and don’t actually represent investors”. Pointing to the Corporate Reporting Users’ Forum (CRUF), to which PwC provides support and expertise, Mr McMurdo suggests “these purported investors have been corr alled” by the audit firm. The LAPFF is an association of 87 local authority pension funds worth £300bn.

Luxury retailers urge tax-free shopping rethink

Leading luxury and fashion retailers have written to Rishi Sunak warning that abolishing tax-free shopping for tourists will be a “hammer blow” to the sector. With the Chancellor planning to levy 20% VAT on purchases made by international shoppers, bosses of fifteen firms – including Ted Baker, The White Company and Paul Smith – have warned that the move “is bad for business and bad for the Treasury’s coffers”. The Centre for Economics and Business Research says the Treasury could lose out if visitors opt to shop elsewhere, noting that tourists in Britain spent over £28bn last year, with £2.5bn of VAT reclaimed. It also warns that the move could cost up to 41,000 jobs.

MPs call for halt of wider MTD roll-out

The Public Accounts Committee has warned that it is unclear whether the Making Tax Digital (MTD) rules rolled out in 2019 have achieved their stated aim of reducing tax errors. As of April 2019, VAT-registered businesses and self-employed people with a turnover exceeding the £85,000 VAT threshold have to use specialist software when they file their returns. A report by the Association of Taxation Technicians says some small businesses have had to spend more than £5,000 on software and training. While HMRC wants all firms to adhere to MTD as of April 2022, the committee says this should be delayed until it is ascertained whether MTD is “reasonable and affordable”. The Chartered Institute of Taxation has backed the call for greater scrutiny of the changes.

Chancellor urged to reveal tax plans

The Sunday Times’ James Coney called on Rishi Sunak to reveal his intentions in regard to taxes, saying it is time people were given “some clue” on how the Chancellor expects the country to cover the cost of the coronavirus outbreak. He notes Institute for Fiscal Studies analysis suggesting that the Government will need to raise £40bn a year to pay for the pandemic and says that while an Ipsos Mori poll found that most people are happy with tax rises, “you can’t really agree to something unless you know the specifics.”

Tax subsidy boost for Bond maker

An investigation by Tax Watch has revealed that Eon Productions, which makes the James Bond films, has received more than £100m in tax subsidies in the UK but regularly pays less than £500,000 in corporation tax. The probe found that Eon Productions transfers the ownership of films to Danjaq, a company based in the US, before release, selling them for a price “equal to the total cost of production less the amount received in respect of UK tax credits”. It is noted that there is no suggestion Eon or Danjaq pay less tax than legally required.

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 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


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Call us today

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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.

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.

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