SMEs under strain - CPA | The Credit Protection Association

SMEs under strain.

2nd July 2019.

A new survey highlights how SMEs under strain from late payment problems.

Research by Xero, the accountancy software firm, and Paypal, the online payments service shows more than one in three owners of small businesses have considered closing their company because of cashflow issues caused by late payments.

The latest analysis from cloud accounting firm Xero found that 53 percent of all trade credit invoices are paid an average of 23 days past due.

In a statement, Xero Managing Director Trent Innes described the figure as “staggering,” and one that “gives fresh urgency to solving the problem” of late payments.

Elsewhere twenty-eight percent of Scottish engineering and construction firms are paid by public organizations within 30 days, a figure reduced to 24 percent when corporate customers are in the private sector, according to a new Specialist Engineering Contractors’ (SEC) Group Scotland report.

In response, trade body SELECT called the findings “genuinely shocking” and “an embarrassment for all concerned,” according to the body’s Managing Director Alan Wilson.

The SEC Group Scotland has reportedly welcomed regulatory efforts to address late payments in the construction industry, Modern Building Services reports said last week.

The group is also calling on policymakers to do more to embrace the Prompt Payment Code, and enforce 30-day payment terms.

Political uncertainty hamstrings small businesses

Small firms are struggling to expand, hire and raise productivity as political uncertainty leaves them increasingly hamstrung, according to the latest report from the Federation of Small Businesses (FSB).

Nearly three-quarters (72%) are not planning to increase capital investment in their businesses over the coming quarter – the highest level in two years – while just over a third (35%) are finding it difficult to find appropriately skilled staff.

FSB national chairman Mike Cherry said: “It’s impossible for small business owners to invest for the future when we don’t know what the future holds. We urgently need to see both prime ministerial candidates spell out their plans for supporting small firms and securing a pro-business Brexit – one that includes a substantial transition period. Fast and loose talk about accepting a chaotic no-deal Brexit in four months’ time is not helpful.”

Consumer credit growth grinds to five-year slump

Year-on-year unsecured consumer credit growth slowed to a five-year low in May, according to data from the Bank of England, which shows growth rose by 5.6% in the month, down from 5.9% in April to its lowest rate since April 2014.

Howard Archer, chief economic advisor to the EY ITEM Club, said: “While consumers have clearly been less affected by Brexit uncertainties than businesses, the overall impression remains that they have become relatively careful in their borrowing amid concerns over the economic outlook while the very low household savings ratio discourages further dissaving.”

Factory output down to six-year low

Manufacturing output fell to a six-year low last month with the IHS Markit/Cips UK manufacturing purchasing managers’ index (PMI) falling from 49.4 in May to 48 in June.

The contraction was blamed on the eurozone’s industrial slump, the US-China trade war and the after effects of the pre-Brexit stockpiling that took place earlier this year. Manufacturers in the eurozone fared even worse, clocking up a score of 47.6.

Thomas Pugh, an economist at Capital Economics, said: “The sector is still suffering from a Brexit hangover. But it also seems unlikely that June’s fall can be entirely blamed on Brexit and a weaker global economy should take some of the blame.”

Employee ownership model on the rise

Figures released by the Employee Ownership Association (EOA) show the number of businesses adopting the employee ownership model in Britain grew by 18.5% last year.

If you are also struggling, 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 are struggling like the above retailers and sold B2B on credit then there may be a hidden source of capital you can call on.

If you need extra capital, rather than shutting down or 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 be the cash rescue 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 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 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 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

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 big retailers or small ones, 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.

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!

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