After the credit crunch......
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.
< back to News
headlines
