Paying late is “crack cocaine” to big business.

10th May 2019.

Duncan Swift has been appointed as the  new president of R3,  the trade association for the UK’s insolvency and restructuring professionals and has said that large businesses are treating late payments like crack cocaine.

Duncan Swift says there is a need for “governments and other policy makers to actually understand that late payment is for those that are the late payers can be quite a bit of a drug. I would go so far as to describe it as the crack cocaine for larger companies.”

He has recognised that the late payment culture must be tackled.

Working in the food sector, Duncan Swift is familiar with the link between late payment and insolvency, and is determined to campaign for sanctions for late payers.

He commented: “In my experience, a substantial number of businesses have problems that stem from late payment – problems that could easily be avoided if payment practices were better. As R3 President, I will work with the Small Business Commissioner, the Chartered Institute of Credit Management that oversees the Prompt Payment Code and other organisations to encourage the Government to take action on this issue.”

He said Large corporations are relying on late payments and governments must better understand the scale of the problem.

“It’s a selfish motivation because if everybody was doing it and it became widespread, and I would say in certain industries it is an endemic problem that causes structural problems throughout the sector where you can end up with situations where otherwise healthy businesses that are good businesses keel over, because they are starved of cash,” .

He went on to explain “Because late payment is in the hands of the late payer, that money is free money. They don’t have to borrow it from a bank with a rate of interest on it and they don’t have to have it supplied by shareholders with an equity return on it. It’s working capital funding free of charge to grow their business. Which is quite a powerful motivation for any single business to wish to pay late,”

Mr Swift added “because late payment is the underpinning of that adage cash is king and most insolvency events in the Uk are caused by lack of cash not by lack of profit.”

The new president went on to point out that government initiatives like the Prompt Payment Code, in which businesses commit to paying within 60 days with the aim of halving that to 30 days, are voluntary. “At the moment the sanctions don’t fit the extent of the problem. The small business commission is not in the position to fine.”

“Recently the small business commissioners named and shamed some companies it had investigated, and the Prompt Payment Code expelled 17 contractors from its books. That’s a reputational hit, is it going to make much difference to the big corporate late payer? Probably not. The problem with the drug benefits to the large late payer is that it’s difficult to wean them off it.”

This follows research from Begbies Traynor showing the desperate financial situation that many UK businesses are in.

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.

Do you have a problem with late payments?

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 bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply to businesses on credit help us help you identify the risks. Spot those companies ignoring rules on payment and treat them appropriately.

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.

Do you realise you may have hidden capital tied up in your business?

There is no need to run to banks of other finance providers for extra capital.

Do you realise you may have a hidden source of capital within your business waiting to be activated?

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and underused legislation your business could be due huge amounts in compensation that you didn’t even know about.

For years the businesses you sold to were ignoring rules on payment. Now you can be recompensed  for their ignoring rules and paying you late.

That compensation could be the cash injection your business needed.

Are you  thinking about retiring, closing the business down or going into insolvency?  If so this compensation could be an excellent way to maximise the return you get for their years invested in the business.

If you collect the compensation you are due on late payments then you could create a nice nest egg from the business or find the funds to rescue it from insolvency.

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 hardwork. 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.

The Credit Protection Association plc (established 1914) has spent 3 years researching the accounting, technical and legal implications of Late Payment Legislation and our staff and retained solicitors probably have as much working knowledge of this legislation as could be found anywhere.

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 companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

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 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 cash-flow, 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 cashflow.

Don’t let your bankers control you,  contact CPA today.

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.

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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Duncan Swift biography

Duncan Swift is Corporate Advisory Services Partner and Head of Food Advisory Group at Moore Stephens. He began his career at PricewaterhouseCoopers (PwC) and worked for KPMG and Grant Thornton before joining Moore Stephens in January 2012.

A licensed insolvency practitioner since 1990, Swift leads Moore Stephens’ national Restructuring & Insolvency division and its national sector specialist Food Advisory Group, as well as the corporate advisory team in Southampton. Specialising in all aspects of business restructuring and rescue, he has a strong track record in working successfully with boards, banks and asset-based lenders.

Duncan Swift’s expertise spans the engineering, maritime, property, professional practice and food production & processing sectors. His nationally recognised expertise in the food production & processing sector includes published submissions to the Competition Commission during its 2006-2008 Groceries Market Review, and high profile cases, including: Food Brokers, Manor Farm Ducks, Rayner Foods, Devon Desserts/BG Foods, Dairywise and Keith Floyd’s Public House.