In today’s economic climate, business customers and clients are increasingly asking for - and in many cases expecting - credit from their suppliers.
There are obviously many benefits to offering credit. It shows a willingness to be flexible which fosters stronger business relationships, and it helps to secure or keep important contracts. Used properly, extending credit for goods and services can give your business a competitive advantage and boost income.
A brother and sister from Greater Manchester have been convicted of fraud after using a network of sham companies to defraud businesses out of hundreds of thousands of pounds. Mohammed Ali and Samira Saddique set up a string of fake businesses, specialising mainly in so-called debt collection, but in reality the companies were nothing more than a vehicle for advance fee fraud on an industrial scale.
If a French client owes you money, you can apply a certain amount of pressure to encourage payment, and many clients will pay up eventually. But in some cases, you’ll need to instruct a lawyer in France to collect the money you’re owed.
Debt collection in France is a slightly different procedure, compared to debt collection in the UK. This blog provides a rough guide to your options and the types of court action you could bring.
French courts will uphold court judgements made in other parts of the EU and, in some cases, outside the EU as well. For the purposes of this article, we are referring only to court action taking place in France against clients who live and work there.
The phrase 'no win, no fee' is screamed at you from a hundred adverts a day, usually in relation to personal injury claims, PPI mis-selling and so on, but it is also used in the context of no win, no fee debt collection - meaning you only pay commission to the b2b debt collection company if they are successful in recovering what you are owed.
It's worded all sorts of different ways, so you might also see 'no collection = no commission' on some ads, but it boils down to the same thing - if you don't win back your money from the debtor, then you have nothing to pay.
Small businesses are extremely vulnerable to cash flow problems, and even the slightest slip in payment dates can leave the business unable to pay its suppliers and even staff salaries. In many cases, big suppliers don’t pay their smaller suppliers quickly enough to keep the small businesses running, and as a result the small business finds it simply can’t make ends meet.
Premier Foods - owners of the Mr Kipling brand, along with several other household names - have encountered their fair share of negative press recently, since it emerged that they were demanding that suppliers should invest in the company in order to continue receiving orders.
Yep, that's right - suppliers to Premier Foods, many of them fairly small foodservice businesses, were apparently told that if they wanted to keep receiving future orders, they had to put their own money into Premier in the form of investment finance.
Where do small businesses turn for help when they suffer due to late payment? Under new government plans, there could soon be a Small Business Conciliation Service tasked with tackling that precise problem.
That's not its official name as yet - and in fact, you could be forgiven for thinking you already know of a 'conciliation service' for small business disputes, in the form of mediation.
Last week, the Small Business, Enterprise and Employment Act 2015 gained royal assent, meaning broadly speaking, the various measures that have already been outlined by BIS, the Insolvency Service and other government departments should be brought into law without any major changes.
What does this mean for creditors? Actually there are some broad sweeping measures, and some more specific ones, which should combine to tip the balance more fairly in the direction of creditors.
When it comes to avoiding bad debt the old adage "prevention is better than cure" is a very useful rule to follow. As we tell any business owner that will listen, it is absolutely imperative that before you extend a customer credit you answer the following questions:
The UK's small businesses are facing even longer overdue invoices than at the worst point of the recession, according to figures from ABFA.
In a report published earlier this month, the Asset Based Finance Association revealed that, in 2009 when the recession peaked, firms with turnover of less than £1 million per year were waiting on average 61 days for invoices to be paid.