March 2008
Despite the brave noises that come
out daily from Whitehall, it doesn't take a genius to
work out that 2008 is going to be a difficult year for
everybody. The slowdown in the economy, deteriorating
inflation, and the tightening of the purse strings by
the credit card companies, banks and mortgage lenders
will make it difficult for everybody.
Because we are overspent as a nation,
the problems are rapidly affecting the SME market – that
all important market that employs the bulk of the UK
workforce – to you and me that’s the local
manufacturing and service businesses and the local high
street shops.
Now these businesses are finding it
doubly difficult - rising prices for their raw materials
with pressure to pay early by their suppliers at one
end, and at the other, their customers taking longer
to pay on a reduced level of sales. As a politician might
say, 'a challenging year' ahead!
Whilst refinancing or assigning the
debt book might well be the answer, and still a good
possibility, especially if the business is viable, there
is another option – getting your clients to settle
quicker by using the skills of a reputable debt collection
company.
The average 'debtor days outstanding'
- that’s the average time it takes business customers
to settle their invoices - ran out last year at something
like 68 days - the forecasts for this year are quite
scary and we have seen it quoted as being as high as
100 for some businesses!
The cash in the sales is the life blood
of the business and if that dries up there are serious
consequences. Here is an example-
If a business with a turnover of £1m
finds that his suppliers shorten his credit by 10 days
and his customers extend the time they take to pay
their bills by 10 days then the business will very
quickly find that it has a cash problem well in excess
of £50,000!
P&A Receivables Services, based
in Scotland Street Sheffield, have a distinctive competence
in collecting debts across the UK and the world for all
sizes of companies. Highly trained staff act in the best
interests of your company and the onsite law team can
quickly take action if appropriate. We can also help
by identifying problems in your credit department and
reviewing your systems, training your staff and recovering
assets. There is much more information at www.pandareceivables.com
If your business is finding it difficult
and events are moving fast, please telephone me on 0114
275 5033 for assistance.
Jeremy Priestley
Managing Director, P&A Receivables
Services plc
and Managing Partner at The P&A Partnership.
