This weeks business news that influences the world of selling on credit.

19th July 2019.

This week I have been so tied up with the day job, I haven’t had a chance to post some of the stories I have seen this week that have an impact on the world of selling on credit. So I am going to cheat and sum them a number of them up in one post here.

US giant swallows craft brewer

Small creditors lose out again in another insolvency as Investors and creditors of craft beer start-up Hop Stuff have been wiped out after it collapsed into administration. KPMG was appointed on Friday and the firm was sold in a pre-pack deal to brewing giant Molson Coors.

Late-payers face ban from government contracts

We have written about this before but the governments rules (The Prompt Payment Initiative) on awarding contracts to late payers came up in the news again.

New rules coming into effect on Sept 1st require firms to pay 95% of their invoices within 60 days or face a ban on applying for public sector contracts worth more than £5m.

The crown representative for small businesses Martin Traynor said the Government wants to “set an example” for private businesses as well as reminding schools, hospitals and government departments of their duty to pay their own suppliers within 30 days.

18 companies suspended from the prompt payment code

See our earlier post on the 18 companies suspended from the prompt payment code.

Survey shows SMEs are scared to raise the issue of late payment.

see our earlier post looking at the surveys findings

Chancellor calls out late payment culture

Chancellor Philip Hammond has called for “radical cultural change” to end the scourge of late payments – which puts 50,000 small firms out of business every year. The talks – attended by leading business groups FSB and CBI as well as a number of firms – follow recent government action including proposals to fine those failing to comply with the rules and beefing up the Small Business Commissioner’s enforcement powers.

Insolvencies worst among women, and in the north

The annual report from the Insolvency Service shows the number of people becoming financially insolvent in England and Wales has risen for a third year in a row. The overall insolvency rate in 2018 hit 25 for every 10,000 adults – an increase of 3.6% on the previous year. A marked regional split was highlighted in the report, with the highest number of insolvencies in the northeast and the lowest in London. Additionally, the insolvency rate for women was 26.6 per 10,000 adults against 23.3 for men. Mark Sands of the insolvency and restructuring trade body R3 said: “The gender split in insolvency is a sober reminder that women are more likely to be economically disadvantaged than men.”

Increased chance of no-deal sends the pound down before it bounced back after parliament took action

Demands from Jeremy Hunt and Boris Johnson that the Irish backstop be cut from any deal with the EU helped send the pound to its lowest level in more than two years. The increased likelihood of a no-deal Brexit saw Sterling hit a 27-month low of $1.2385.

But then after Parliament took steps to block the future PM from proroguing parliament, the pound bounced back to $1.25.

Pound could hit parity with dollar in no-deal Brexit

Further woe for the UK economy as Morgan Stanley has predicted that the pound could fall to parity with the dollar in the event of a no-deal Brexit. The bank said the fall to historic lows would come under the market’s worst-case scenario – the UK leaving the European Union without a deal – a risk that the bank says is growing.

Those reliant on imports would face a tremendous squeeze on margins.

OBR warns of no-deal recession

The Office for Budget Responsibility is expected to warn today that a no-deal Brexit will push the UK into a recession next year and lead to an economy 3% smaller than if it leaves with a deal.

The OBR’s analysis is based on a relatively “soft” scenario that was modelled by the International Monetary Fund in April, the Times reports.

Meanwhile, the Chancellor has hit back at Jacob Rees Mogg after he dismissed Treasury forecasts as “silly” saying it was “terrifying” to think he could soon become part of government.

But Stephen Barclay, the Brexit secretary, joined in the criticism of Philp Hammond saying his claim that a no-deal would cost £90bn was a prediction for 2035 and assumed there would be no government intervention.

IoD: Devolve powers to regions for post-Brexit boost

The Institute of Directors has said that Britain’s industrial strategy could help UK regions compete after Brexit through the radical devolution of powers over skills and training, business taxes and incentives, and infrastructure. “Our towns and cities need more autonomy to respond to economic shifts,” said Tej Parikh, the IoD’s chief economist.

UK suffering recession-level squeeze on living standards

Household incomes have been squeezed more tightly in recent years than during the 1990s recession, according to the Resolution Foundation’s annual Living Standards Audit. The think tank estimates that typical household incomes have fallen by 0.5% over the past two years, weaker than the 0.3% growth recorded between 1991 and 1993. The report argued that while households had managed to boost incomes by working more and curtailing leisure time, they might be “running out of road” when it came to improving their situation in this way.

Those selling to consumers will be worried about these findings.

Wage growth at highest rate since 2008

Wage growth in the UK rose to 3.6% in the year to May 2019, the highest growth rate since 2008, according to ONS figures.

Wages have been outpacing inflation since March 2018. A record high of 32.75m people were in employment up to the end of May, while 1.29m were out of work, the lowest since at least 1992.

However, James Reed, chairman of Britain’s biggest recruiter Reed, has revealed that the company saw the biggest fall in job vacancies since 2010 in June, an indication that “worrying storm clouds are forming around the UK’s job market.”

Finally, a survey by Johnston Carmichael has found that almost three-quarters of Scottish farm businesses are finding it difficult to recruit staff. Employers blame uncertainty over freedom of movement rules after Brexit.

Rising wages will further squeeze already tight margins.

Inflation remains steady

Data from the ONS shows consumer prices rose 2% in June compared with a year ago, the same rate of inflation as in May and in line with the Bank of England’s target.

Second-hand stores drive retail sales

According to the Office for National Statistics, retail sales volumes rose by 1% in June, up from a fall of 0.3% in May, thanks to a boost in sales of second-hand goods at charity shops and antique dealers. Non-food stores contributed 1.6% to annual growth, while second-hand stores made the largest contribution to the non-food category, with sales increased by 92.9% in the year to June. Clothes sales staged a partial recovery, rising 1.2% following May’s 3.8% drop, as consumers flocked to summer sales in June, however, department stores continued to struggle, with sales falling by 0.4%, their sixth consecutive month-on-month decline. Howard Archer, chief economic adviser to the EY Item Club, said: “Consumers have clearly been more resilient than most other sectors of the economy and have seemingly largely brushed off Brexit concerns, no doubt helped by the overall improvement in their spending power since mid-2018 as well as record high employment.”

Neville-Rolfe calls for business tax reform

Former Tory Treasury minister Baroness Neville-Rolfe has told the House of Lords that the tax system is dampening business growth, with the length of the tax code doubling in ten years along with growing regulatory burdens in every sector. She called on Government to increase the proposed rate of digital services tax and use the proceeds to ease the burden of rates on the high street. Stamp duty increases had put the brakes on the housing market and had a “deleterious effect” on the movement of labour, she added, while small businesses struggle under the burden of administering PAYE, NICs and auto enrolment pension systems. During the debate, Lord Cavendish called on the Government to change its attitude towards the SME sector, noting that the proportion of them citing tax and regulation as a burden to growth had increased over recent years.

OBR hits out at Hammond

The Office for Budget Responsibility’s latest fiscal risks report has warned that policy risks to the public finances in the medium term “are significant and look greater than they were two years ago”, suggesting that Chancellor Philip Hammond’s recent statements show he “has all but abandoned the Government’s legislated objective to balance the budget by the mid-2020s.” The report, also criticises Conservative leadership contenders for making “a series of un-costed proposals for tax cuts and spending increases”. It warns that “additional tax cuts or spending increases would push government borrowing and debt up from the levels expected in our forecasts and that there is no war-chest or pot of money set aside that would make them a free lunch.” Philip Aldrick in the Times considers the report, noting that taxes raised £740bn for the state last y ear “but they cannot be taken for granted”.

Retail sales growth accelerated in June

UK retail sales growth accelerated in June, despite a decline in department stores, a report from the Office for National Statistics showed. June’s retail sales rose 3.8% year-on-year, and increased 1.0% when compared to May.

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

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.

See the section below – About CPA.

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

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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Discover how to improve your cashflow in 3 steps.

Read our blog – Debt collection agency

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog -What is a credit management company?

Read our blog -Credit Management that works!

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

Read our blog – Communicating with your debtor

When your company isn’t paid on time

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

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