Turnover troubes put small firms at risk – business news 4 December 2020.

James Salmon, Operations Director.

Turnover troubles put small firms at risk, the economy shrinks, with services sector hit by lock-down, PM vows to overhaul business taxes, Companies prepare to lift pay freezes, 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.

Turnover troubles put small firms at risk

Labour Party analysis suggests an estimated 390,000 small businesses are worried they will not survive the next three months.

The report says around 1 million small businesses do not have cash reserves to last beyond three months, with more than 520,000 small firms having seen turnover fall by more than half amid the pandemic, even before the recent England-wide lockdown.

Labour says a majority of businesses forced to close during the latest lockdown received smaller Government grants than during the initial shutdown, with most seeing payouts a third or half of those received in March.

Shadow Business Secretary Ed Miliband said: “Small businesses are being let down by shrinking government grants … Unless ministers change course we’ll see hardworking businesses go bust and high streets crumbling before winter is through.”

Economy shrinks, with services sector hit by lockdown

While the economy shrank in November due to the England-wide lock-down, the downturn was not as severe as analysts had feared.

The IHS Markit/CIPS composite purchasing managers’ index (PMI) fell from 52.1 to 49 last month on an index where a figure above 50 points to growth. While this marks the first shrinking of the economy since June, it outperformed the fall to 47.4 economists had forecast.

With the lockdown seeing the closure of many shops, restaurants and pubs, the service sector was the hardest hit, with the services sector PMI falling from 51.4 to 47.6 in November.

An increase in Brexit-related stockpiling offered a boost the manufacturing sector, however, with the manufacturing PMI up from 53.7 to 55.6, its highest reading since December 2017.

Economists note that the PMI captures whether business activity is rising or falling but not by how much. Samuel Tombs, an economist at Pantheon Macroeconomics, suggests the economy most likely shrank by 5% last month and will rebound by about 4% in December.

PM vows to overhaul business taxes

Boris Johnson has pledged an overhaul of business taxes in a bid to drive Britain’s post-coronavirus recovery.

The Prime Minister said the Government would be looking at taxation and regulation in a bid to encourage and support businesses. During an online Q&A, Mr Johnson said Chancellor Rishi Sunak is looking at the fiscal and regulatory environment required “to make sure that this is the best place in the world to start a business, the best place to invest.”

The Telegraph’s Harry Yorke says the PM’s comments could “set him on a collision course with fiscal hawks in the Treasury”, with the Chancellor considering ways to cover the nation’s coronavirus costs. The paper says that while Mr Sunak is studying proposals that suggest bringing capital gains in line with income tax and mulling a cut in pensions tax relief for higher earners, he is understood to be sympathetic to calls for cuts to business rates.

The FT notes that the Chancellor hinted in his spending review that tax rises may be imminent, with the outlook for public finances “clearly unsustainable”.

Sales up in November

Analysis from BDO shows that combined in-store and online retail sales rose 3.3% year-on-year in November amid heavy discounting on – and in many cases ahead of – Black Friday. The increase delivered the best November performance since 2017. While like-for-like lifestyle sales were up 17.6 %, fashion sales slid by 5.7%. Sophie Michael, BDO’s head of retail and wholesale, said: “While November results were promising, the figures have been heavily impacted by widespread discounting and lockdown’s knock-on effect on in-store sales and strong online demand.”

Companies prepare to lift pay freezes

Private sector workers are set to receive average pay rises of 2.4% next year, according to Willis Towers Watson. While this year has seen a third of private sector companies freeze pay increases, this is expected to fall to just over 3% next year. The most optimistic industries include insurance, with an average increase of 2.9% on the cards, fintech (2.8%) and business and technical consulting (2.8%). The most pessimistic are leisure and hospitality (1.4%), construction, property and engineering (1.8%) and automotive (1.9%). Keith Coull, a senior director in Willis Towers Watson’s global data services business, commented: “After a difficult year for employers and employees, battling lockdowns, employee safety issues, working from home and declining revenues, many employers are finding ways to manage their employees with a more focused work and reward strategy.”

Arcadia could see half-price sale

Experts suggest that brands under the Arcadia umbrella could be sold for less than half of the amount they were worth at the start of 2020 following its collapse into administration. Arcadia’s brands were valued at £800m by consultancy Brand Finance in January, with Topshop alone accounting for almost £400m. However, Richard Haigh of Brand Finance says the brands will now be worth less than half that figure. He said: “Ultimately, you are always going to see a reduction in price when you go into administration because people know you have to sell”. He added that with the coronavirus crisis adding further damage, “I would say the price will be below 50% of what we had valued.” The Telegraph says Arcadia’s administrator Deloitte will be seeking to preserve as much of the business as possible, meaning buyers are likely to get preferential treatment if they are wil ling to take on the entire operation, rather than just the brands and online platforms.

Retail failures will shine a spotlight on auditors

Menzies partner James Hadfield says corporate failures in the retail sector could see focus turn to auditors. This week has seen Arcadia and Bonmarche collapse into administration, while it was confirmed that Debenhams is being wound up – and Mr Hadfield said he can foresee further failures. He told a webinar: “It wouldn’t surprise me if there were more failures coming through … It’s been such a challenging time for businesses.” He argues that auditors “don’t have a crystal ball, and there’s only so much that we could be expected to predict” but suspects “the spotlight will once again fall on the auditor” in some cases. Noting that many of the firms that collapse will have had their last audit signed off during the pandemic, Mr Hadfield says: “You would hope that auditors will have taken the right level of risk aversion in their opinion and made the necessary disclosures, but there will be some examples where there are unforeseen circumstances”.

Supermarkets to pay back rates relief

Asda, Sainsbury’s and Aldi have announced they will repay business rates relief received during the coronavirus pandemic, with Tesco and Morrisons having already committed to the move. The announcements mean the supermarket chains will collectively return more than £1.7bn. Asda yesterday said it will pay back its £340m relief in full, while Sainsbury’s will hand back £440m of rates relief and Aldi has pledged to repay £100m. They follow Tesco and Morrisons, who promised to repay £850m between them. Meanwhile, John Lewis, which owns Waitrose, said it has no plans to repay rates relief, insisting the support measure “remains crucial to help us navigate the crisis.” Reflecting on the business rates relief rolled out amid the coronavirus crisis, the Times’ Alistair Osborne says it highlights issues with the rates, saying there is a need for reform as retail increas ingly moves online. He argues that the tax regime is skewed in favour of online retailers. Louisa Clarence-Smith in the same paper says repayment of the rates by the retailers has renewed scrutiny of the tax.

Covid-19 general news

The UK added 14,878 new cases yesterday. With 414 added deaths, the total passed the 60 thousand milestone to reach 60,113.

Globally 690,127 new cases took the world to 64.9 million. Deaths reached 1,507,323.

Pfizer expects to ship half the Covid-19 vaccines it originally planned for 2020 due to supply-chain problems. They still expect to rollout a billion doses in 2021  but it is taking longer to scale up the raw material supply chain.

Moderna says participants in the Phase 1 study of its vaccine, mRNA-1273 retained high levels of neutralizing antibodies through 119 days following first vaccination.

Anthony Fauci, the top infectious-disease expert in the U.S. said he wished the U.K. had spent more time reviewing the Pfizer vaccine. The head of the UK agency said it had not cut corners.

More than 2,800 people died from covid-19 in the US on Wednesday, the highest daily figure to date, as the number in hospital passed 100,000 for the first time too, according to a tally by John Hopkins University.

Facebook has said it will now take down vaccine misinformation that has been debunked by health experts.

The World Health Organization plans to develop a dashboard that will measure the uptake of Covid-19 vaccinations to assist with planning and rolling out vaccine strategies.

The UN said the pandemic had pushed 32 million into extreme poverty, living on less than $1.90 a day.

Italy also reported record deaths yesterday, surpassing the records set in March. with 993,, above the 969 on 27th March.


The FTSE 100 rose 0.4% yesterday while the 250 was up 1.3%, benefiting it seems from the vaccine news and improved outlook for the UK economy. European markets however lagged as investors run their ruler over the PMI data.

Mitch McConnell, the Republican leader of America’s Senate, said there was “movement in the right direction” on a covid-19 relief package. Overnight the S&P500 was flat but the Nasdaq rose 0.23%.

The pound has been correcting on EU trade negotiation worries and is currently at 1.103 Euros and 1.342 US dollars

Oil has strengthened to $49.7 (Brent) as OPEC+ talks appeared to make progress and agree to gently ease output cuts next year.

Gold has strengthened to $1840 as a hedge against a weak dollar.

EU trade

Negotiations continue to go to the wire without evidence of a resolution while France has threatened to use its veto powers if any last minute concessions are made.  They are trying to agree a skeleton deal without many of the needed elements that would have prevented frictions but both sides still can’t seem to make any progress. British officials claimed that last-minute demands by France’s president, Emmanuel Macron over French fishing rights, have all-but killed the prospect of a Brexit deal this week.

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 nsm@cpa.co.uk 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


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.

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.

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

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.

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

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