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Octempo:RM News RSS http://www.Octempo.com/news.aspx Octempo:RM News for RSS Subscribers en-us 2009-11-18T04:00:00.0Z 2010-05-01T04:00:00.0Z ... NotePad.exe webmaster@Octempo.com webmaster@Octempo.com 28 true Late payments cost firms £1.9bn http://www.Octempo.com/News.aspx 2010-04-12T09:00:00.0Z UK businesses are wasting £1.9bn chasing late payments, according to research by business finance specialist Bibby Financial Services. Despite the economy officially returning to growth, 35 per cent of businesses have reported customers are taking longer to pay invoices than 12 months ago. And some sectors with greater exposure to the downturn are suffering more than others. Bibby said 47 per cent of manufacturing and construction firms saying that customers are taking longer to pay than a year ago, compared to 36 per cent of firms in business services. Edward Rimmer, Bibby Financial Services’ UK chief executive, said: "Across this nation, businesses are fighting for survival with sustaining a healthy cash flow one of the biggest challenges." Twenty per cent of companies say they are chasing invoices three times or more, and a staggering 48,000 businesses have had to follow up invoices more than 11 times – a waste of time and money for firms. Chancellor Alistair Darling pledged in his Budget last week to ensure the Government will pay 80 per cent of its invoices from small business within five days, down from ten days. Small and medium-sized businesses are currently owed £30.4bn in outstanding payments, according to Bacs. Rimmer added: "The Chancellor’s pledge to pay 80 per cent of public sector invoices within five days is a worthy goal but it must become a reality. If Alistair Darling really wants a lasting legacy, he should urge the private sector to participate in an invoice amnesty, pay all outstanding invoices and then adopt a new prompt payment culture." pastdue2.jpg Late payments cost firms £1.9bn 27 true Bad debts blight business http://www.Octempo.com/News.aspx 2009-11-13T09:00:00.0Z Bad debts have risen for nine of out ten companies according to research by credit information provider Creditsafe. It said 91 per cent of UK companies polled in October had seen an increase in defaulted payments from creditors in the last year and one in ten (10.4 per cent) saw this increase by over 20 per cent in the last 12 months. In fact, despite whispers of recovery, over half of UK businesses (56 per cent) told Creditsafe they are more concerned about late and defaulted payments than they were at the height of the financial crisis. A staggering four per cent of UK enterprises are awaiting payment of at least £100,000 from creditors. One in ten companies (9.7 per cent) has bad debts on the balance sheet that equate to at least 20 per cent of their annual profits. David Knowles, business development director at Creditsafe, said: "The ability of the UK economy to rise out of recession may be strangled by bad debt. Many companies are carrying huge levels of debt on their balance sheets, which if not recovered could see a dramatic increase in businesses entering administration. As credit has become increasingly expensive and restricted, businesses are now struggling to contend with such high levels of debt and a greater number of defaulted payments." Six in ten (63 per cent) of UK businesses have taken steps in the last 12 months to help mitigate their exposure to bad debt and reclaim monies owed. The most popular method has been increased debt collection activity, with firms increasingly litigating to force creditors to pay out. smashedpig.jpg Bad debts blight business 26 true Late payment still hitting SMEs http://www.Octempo.com/News.aspx 2009-09-21T09:00:00.0Z Cash flow worries due to increasing late payments are causing small businesses the most headaches, according to a survey by the Forum of Private Business (FPB). The trade body’s latest Economic Downturn Panel survey shows that almost a quarter of respondents, 23 per cent, selected late payment and, subsequently, poor cash flow as their key issue. This was more than those who voted for a lack of sales – 20 per cent – and 11 per cent who said compliance with health and safety regulations. Even declining bank lending was deemed to be less of a concern than poor payments. The FPB said the banks’ "tardy" decision making was chosen as the major issue by six per cent of respondents and the steep cost of bank lending, which was voted for by four per cent. In all, 42 per cent of FPB members who took part in the survey reported a deterioration in prompt payments from customers – typically bigger businesses – compared to just three per cent who said there had been an improvement. A total of 56 per cent said there had been no change from previous months. Just five per cent of business owners surveyed in September said access to finance has Improved, while more than four times as many, 22 per cent, said it has deteriorated. The remainder reported no change. No one saw an improvement in the terms and conditions of loans, while 17 per cent said they have declined and 83 per cent that there has been no change. Phil Orford, chief executive of the FPB, said: "Small firms’ cash flow is being decimated by credit restrictions and declining trade. Our research suggests that poor payment, which has always been a problem, is now threatening the very survival of many businesses. "We want the UK’s biggest companies to take the lead and pledge to pay their suppliers on time by signing up to the code in order to set in motion a consensus of prompt payment through the supply chain." Already, under the Late Payment of Commercial Debts (Interest) Act 1998 (LPCD), small businesses have a statutory right to interest (SRI), meaning they can in theory charge for late payments. But the FPB said few take advantage of this or are prepared to speak out publicly out of fears that large companies will simply take their business elsewhere. In addition, many larger companies impose unilateral changes on their smaller suppliers' terms and conditions, often mid-contract and with little warning, effectively sidestepping the redress provided by the late payment legislation. Stuart Blake, adviser on late payment for the FPB, said: "Suppliers receiving underpayment on deliveries made under contracts agreed before the date of any letter notifying them of a change in terms and conditions should know they are automatically be entitled to interest under the terms of their original contracts or under the LPCD(I) Act. "What is more, if their entitlement stems from the LPCD(I) Act, they will be entitled to a late payment penalty charge as well, assuming their contract postdates August 2002." Blake added: "Suppliers should be careful about fulfilling orders received after this letter was sent, since to do so may indicate acquiescence, and therefore acceptance, of the new terms the letter seeks to impose." CB010325_LoRes.jpg Late payment still hitting SMEs 25 true New director to spearhead growth for Octempo:RM http://www.Octempo.com/News.aspx 2009-09-04T09:00:00.0Z Octempo:RM has recruited a new sales director to build on their recent growth. David Imperato has joined the board at Warrington-based Octempo:RM from his previous role as senior executive at Intrum Justitia. Fellow directors Julian Llewellyn and Ed van den Berg believe his experience in the financial services sector – David has also worked at director level with Lloyds TSB and Barclays – will help them build on 12 consecutive months of growth since summer 2008. Julian Llewellyn said: “We’ve just reported a record year of growth and the arrival of David gives us the experience, resources and bench strength to drive that growth even harder. “Our solutions are uniquely positioned in the market – a factor recognised by David and influential in his decision to join us.” David is keen to grasp the challenge of continuing to grow the company, and helping achieve their target of £5m turnover within three years. He said: “I had come across Octempo:RM a number of times whilst at Intrum Justitia and I just couldn’t understand how they could deliver such a high service level at very competitive rates. “By chance I had the opportunity to meet with Julian and Ed and it became clear that together we could take the business on to another level.” Octempo:RM offers a range of services across the whole order to cash cycle, including sales ledger management, credit risk management, credit control and debt recovery. Their modular service allows companies to pick and choose from their services and only pay for what they use. DPNews.jpg New director to spearhead growth for Octempo:RM 24 true SMEs in credit management struggle http://www.Octempo.com/News.aspx 2009-07-15T09:00:00.0Z Getting paid within terms is one of the most demanding aspects of running a business in the current climate, according to a survey of small and medium-sized enterprises (SMEs). Over half (54 per cent) of the 2,000 SMEs polled by Hilton-Baird Financial Solutions on behalf of the Asset Based Finance Association (ABFA) cited payment as their toughest business challenge, with more than a quarter (27 per cent) waiting more than two months for payment. This was an increase of two per cent on a corresponding survey conducted nine months ago. The number of businesses having to wait more than 70 days for payment had also risen by five per cent. Other challenging business tasks cited by the SME respondents included settling supplier payments on time (14 per cent), paying VAT/PAYE (13 per cent) and planning capital expenditure (12 per cent). Evette Orams, managing director of Hilton-Baird Financial Solutions, said: "It would appear that owner-managers are spending more of their time and resources chasing late payers, which can have a damaging impact on the business, as well as delaying the payment of suppliers." In addition almost a third (32 per cent) said their funding had been reduced or refused over the last six months. In line with this, 57 per cent of participants described the financial health of their business as ‘poor’ or ‘surviving’ compared with just 24 per cent nine months ago. Only 12 per cent gave a confident prognosis. However, exactly a third of respondents expected the economy to show improvement within the next 12 months and the vast majority (86 per cent) said that economic recovery would come within two years. The survey also found that small businesses are seeking outside finding to help with their struggles. More than a third (35 per cent) preferred to turn to traditional lenders for overdrafts, a rise of six per cent. Almost a quarter (21 per cent) were seeking out business loans, an increase of seven per cent. Meanwhile, a quarter were considering alternative forms of finance, such as invoice finance. pastdue.jpg SMEs in credit management struggle 23 true Almost 200,000 firms face financial stress http://www.Octempo.com/News.aspx 2009-07-15T09:00:00.0Z Nearly 200,000 UK firms are facing financial difficulty in the recession with the manufacturing and wholesale sectors being hit hardest, an insolvency specialist claims. Begbies Traynor reveals in its latest Reg Flag Alert report, a quarterly monitor of early warning signs of company distress, shows that the recession is also biting hard on the transport and communication sector, which had one of the highest number of firms with critical problems in the second quarter. Begbies’ statistics show that 396 firms in the manufacturing industry had critical problems in the second quarter, while 331 wholesale businesses and 255 transport or communication firms also faced similar levels of financial stress. For manufacturers and wholesalers these latest numbers represented a rise of 140 per cent and 185 per cent respectively on the previous quarter this year. Some 8,296 manufacturers faced ‘significant’ problems, while for wholesale and transport and communications this figure was 7,675 and 6,978 respectively. Begbies said there was a diverse picture amongst sectors on a quarter on quarter basis. While recruitment, engineering and manufacturing amongst others have shown substantial increases in problem companies, the construction and professional services have in contrast shown reductions in problem companies quarter on quarter. Ric Traynor, executive chairman of Begbies Traynor Group, said: "The second quarter Red Flag Alert shows the recession is likely to be prolonged, possibly more prolonged than the last recession and there is no evidence yet of a real recovery emerging. However, the overall increase in the number of problem companies has undoubtedly slowed for the last two quarters which is better news. "We believe that the volumes of corporate and personal insolvencies, as with levels of unemployment, tend to be indicators that lag any change in economic activity and are therefore likely to continue to rise for up to two years after the commencement of economic recovery. "Previous experience, together with an analysis of the current recession, strongly suggests that the period from this year to 2012 will see a large number of corporate insolvencies, probably above the peak levels experienced during the height of the last major recession in 1992." On a regional basis, Scotland saw a 107 per cent rise in companies with critical problems compared to the previous quarter, while the South West and Wales was next with a 58 per cent rise. sparks.jpg Almost 200,000 firms face financial stress 22 true Credit insurance claims up nearly 50% http://www.Octempo.com/News.aspx 2009-07-03T09:00:00.0Z The total number of trade credit insurance claims increased 48 per cent on a year on year basis to 9,213 in the first quarter of 2009. Latest figures from the Association of British Insurers (ABI) on trade credit insurance show that claims soared in the first quarter compared to 6,225 in the equivalent period in 2008. The total value of claims in the first quarter of 2009 was £316m, an increase of 166 per cent from £119m in the same period last year. The ABI said the figures show that trade credit insurance remains a vital lifeline to businesses that are hit by the effects of the recession. Nick Starling, director of general insurance and health for the ABI, said: "The substantial increase in both the number of claims received by trade credit insurers and the cost of those claims shows that trade credit insurers are continuing to support businesses, especially small enterprises, through the recession. "Trade credit insurance claims are a good indicator of what is happening in the UK economy and how that is affecting UK businesses. Clearly, the economic situation remains very tough, trade credit insurers will continue to support their customers through detailed risk assessments and paying claims when things do go wrong." lifebelt.jpg Credit insurance claims up nearly 50% 20 true Corporate insolvencies hit 5,483 http://www.Octempo.com/News.aspx 2009-05-27T09:00:00.0Z More than 5,483 companies became insolvent during the first quarter of 2009 in a 57 per cent year-on-year rise, according to the latest PricewaterhouseCoopers analysis. The analysis, which shows corporate insolvencies increased 14 per cent on the last quarter of 2008, reveals that the worst affected sectors continue to be: construction with 829 companies, manufacturing with 734 and retail with 705. The next worst affected industries were hospitality and leisure with 312 and real estate with 235, all of which are showing a five-year high. London had the highest number of insolvencies with 1,323 which, although a 20.3 per cent increase on the same period last year, is still lower than the increase seen in the last quarter of 2008. The West, South West and Scotland all showed slight decreases for this quarter compared to the previous quarter with 176, 69 and 144 insolvencies respectively. Compared to the same quarter last year, all regions showed a material increase, but Wales is showing the lowest increase with 26.8 per cent. The region showing the highest increase on the same quarter last year is the East with 328 insolvecies – representing a massive 75.4 per cent increase on the first quarter of 2008. Mike Jervis, partner in business recovery services at PwC, said: "We can see that UK businesses are still suffering from the effects of the global recession as more and more of them enter into insolvency with no apparent signs of a slowdown in the near future." He added: "At PwC we are currently working with businesses across the UK, in many sectors and of varying sizes, unfortunately we still find that many companies are leaving it too late to ask for help. Where rescue capital is a scarce commodity, it is obvious that the sooner problems are recognised, a solution is more likely to be achievable – and that solution doesn’t have to be insolvency. "There are, for example, cash management and other techniques which can mean the difference between survival and failure." Jervis said the statistics show only part of the picture, because many restructurings either do not involve insolvency or use light touch insolvency techniques to salvage viable businesses. Barry Gilbertson, partner in the property team at PwC, said that although the actual number of real estate insolvencies are down on the last quarter, from 275 to 235, the figures for January, February and March show an upward trend for each month, giving a monthly average about three times higher than in 2007. He added: "Banks and other lenders are at a critical point in the recessionary cycle. The more property companies that they allow to fail, then the more properties are likely to come onto a market already flooded with property for sale, thereby increasing supply and decreasing the likely sale price due to the lack of available credit to fund purchases. Cash buyers will chase bargains, especially where it is believed that banks are desperate to sell. "Belief in the quality of existing management, or in the ability of administrators and receivers to manage the assets effectively, will be critical to any bank's decision to sell now or hold for enhanced value over time. Experience of a recessionary market and the relevant property expertise are rare but valuable commodities in the fight to minimise loss." closingdown.jpg Corporate insolvencies hit 5,483 19 true 117 UK firms post profit warnings http://www.Octempo.com/News.aspx 2009-04-08T09:00:00.0Z Companies across the UK issued 117 profit warnings in the first quarter of this year as the credit crunch tightened its grip on firms’ cash flows. Research published by Ernst & Young showed this to be the highest first quarter figure since 2001 and the third quarter in a row that UK firms issued more than 100 profit warnings, demonstrating heightened economic distress. The highest warning sectors were support services with 22, media with 13, industrial engineering and software and computer services with 10 each and general financial with nine. Keith McGregor, restructuring partner at Ernst & Young, said: "It is not just the number of warnings that concerns us: the tone of company statements has also darkened. "The prospects for 2009 appear as uncertain and as gloomy as at any point in the crisis. Green shoots will find it hard to flourish in such stony ground; we still believe that the worst of the downturn for many companies is yet to come." McGregor added that the broad range of affected industries showed the spread of the credit crisis into a full-blown recession, now passing down the credit and supply chains from financial services to consumer services and manufacturing. Ernst & Young’s research also revealed that more than 60 per cent of the household goods and home construction sector made profit warnings during the last 12 months. All but one of the profit warnings from house builders came in the first six months of the period while the vast majority of the household goods profit warnings were issued in the last six months. Andrew Wollaston, restructuring partner at Ernst & Young, said: "The high level of profit warnings and their distinctive pattern is due to the perfect sector storm; first house builders, and then companies who would furnish and supply those homes, have suffered from falling sales amid a dearth of credit and consumer confidence. "The sector can expect little respite in 2009. Many house builders have adjusted their output, stock levels and balance sheet to the new market realities and should benefit from falling costs this year." He said further adjustments and writedowns could not be ruled out because it remains unknown how far house prices will fall, when lending will pick up and when, if ever, these variables recover to pre-crunch levels. Wollaston added: "On the expectation that the outlook for consumers will not improve in 2009, the prospects for household goods companies are also bleak, especially those supplying furnishings and consumer durables." The number of companies from the FTSE industrial engineering sector issuing profit warnings has risen dramatically in the last six months. The sector reported 19 profit warnings in the last two quarters, compared with just one in the preceding six months. A staggering 16 per cent of the sector warned in the first quarter of 2009 alone, with just under a third of industrial engineering companies warning in the year-to-date. bills.jpg 117 UK firms post profit warnings 18 true Business failures up 35 per cent http://www.Octempo.com/News.aspx 2009-04-06T09:00:00.0Z The number of companies going bust in the first quarter of 2009 increased 35 per cent on the same period last year, according to Equifax’s latest Business Failures Report. The rise on the fourth quarter of 2008, however, was a mere 3.3 per cent, but the report goes on to show how regional areas have been hit hard, with business failures in the North East rising a massive 82.9 per cent. Equifax said this figure should be viewed in the context that there were a relatively small number of failing businesses in that region overall. Regions where there were overall higher numbers of businesses failing also saw significant increases year on year, including the South East at 47.5 per cent, the North West at 41.1 per cent, the West Midlands at 34.2 per cent and London at 21.9 per cent. But several of these regions appeared to be defying the trends when looking at failures for the first quarter of 2009 compared to the fourth quarter of 2008. In particular, London saw an 8.7 per cent drop and the South East saw just a 6.5 per cent rise. Neil Munroe, external affairs director at Equifax, said: "It is hardly surprising that year on year the level of failures has increased so significantly. At the beginning of last year we were only just starting to see the impact of the credit crunch and certainly the word recession had not yet been uttered. "But obviously things have been very different at the start of this year with consumer confidence really struggling to lift. However, what we do seem to be seeing is a slow down in what was a run-away train of failures at the end of last year." Munroe said it would be "immensely dangerous" to take too much from just one quarter’s performance, but he added that it is a useful benchmark to watch in the coming months. He added: "The bottom line is that our latest figures reinforce the fact that the variety of government and private sector initiatives still have a long way to go in helping stimulate confidence in the business community. Indeed, there is a risk that as we head into the new tax year we might even see the numbers creep up again as some businesses find it impossible to stay ahead of their creditors including the tax man. The construction sector continued to report the greatest year on year rise in failures, with 65.2 per cent more businesses folding in the first three months of 2009 compared to the same period last year. But when compared to the fourth quarter of 2008 it appeared that the downturn for the building industries may be reaching the bottom with just a 15.3 per cent increase. The manufacturing and retail sectors also saw significant year on year increases in failures at 44.4 per cent and 44.8 per cent respectively. chessboard.jpg Business failures up 35 per cent 17 true Pledge to help small firms falls short http://www.Octempo.com/News.aspx 2009-03-23T09:00:00.0Z A pledge by the government to speed up its departments’ payments to small firms is failing to help the majority of targeted business, a new study shows. Research from commercial credit reference agency Graydon UK reveals that the government’s pledge made last autumn, to pay small firms’ trade invoices in 10 rather than the usual 30 days, is taking far longer than expected to take effect. The survey, conducted during the first two weeks of March, reveals that just one per cent of small businesses questioned, which are currently supplying government agencies, are now receiving payments due to them within the pledged 10 day period. Go to www.Octempo.com for the full article. images/parliament.jpg Government pledge to help small firms falls short 16 true Cash flow concerns grow as late payments bite - Lloyds TSB http://www.Octempo.com/News.aspx 2009-03-02T09:00:00.0Z The latest research released by Lloyds TSB Commercial Finance has found that 29 per cent of small and medium sized companies (SMEs) reported cash flow problems in the second half of 2008. 70 per cent of these companies cited late payment of invoices by their customers as the number one issue, as a growing number of firms stretch their credit terms and hold onto cash. Simon Featherstone, managing director of Commercial Finance, said: “The research shows that late payments were already negatively impacting cash flows in the second half of 2008. “With economic conditions remaining tough, it’s vital that advisors and funders work with their clients to examine where the threats lie and look at ways and means of strengthening their cash flow going forward. “It’s no surprise that we’re seeing a rise in the number of businesses enquiring about products such as factoring and invoice discounting. These forms of finance enable businesses to release the value held in assets, such as invoices, machinery or stock, to quickly strengthen cash flow. Go to www.Octempo.com for the full article. images/crunch.jpg Cash flow concerns grow as late payments bite - Lloyds TSB 15 true Ed Van den Berg receives accreditation http://www.Octempo.com/News.aspx 2008-12-03T09:00:00.0Z Operations Director Ed Van den Berg receives Greater Manchester Chamber of Commerce consulting accreditation. As a further addition to Ed’s already impressive list of credentials, Greater Manchester Chamber of Commerce have completed their evaluation and awarded accreditation to Ed as an approved provider of consultancy work. “This accreditation further enhances Ed’s reputation as one of the North West’s leading credit management practitioners”, observes Julian Llewellyn, MD of Octempo, “and underpins the specialist expertise and quality that we offer throughout all our services. images/EdVandenBerg.jpg Ed van den Berg 14 true Office space http://www.Octempo.com/News.aspx 2008-11-25T09:00:00.0Z We are hiring and expanding. Octempo:RM have taken additional office space at our Warrington base to accommodate new staff and business growth. Commenting on the expansion, Operations Director Ed Van Den Berg stated: “The market for our services is growing strongly and each week sees new customers choose Octempo:RM to help them manage credit risk and get paid on time. This is a clear indication that our services and approach are meeting our clients’ needs in a challenging economic environment. images/cinnamon-house.jpg Octempo:RM Corporate HQ 13 true Credit insurers see claims surge http://www.Octempo.com/News.aspx 2008-11-23T09:00:00.0Z Companies are starting to go bankrupt at a disturbing rate in Britain, the United States and Europe as the debt crisis spreads to routine forms of trade credit, choking off the finance for suppliers at the end of the commercial chain. Atradius, the world's leading credit insurer, said there had been a sharp increase in the number of firms refusing to pay their suppliers for months, in many cases pushing terms from 60 days to 150 days. "It's hit hard. There's been a lag since the credit crunch in August but we're now abruptly seeing a number of medium-sized companies going under," said Mark Henstridge, senior risk underwriter. "This is a big warning sign for Britain, but we're seeing similar problems in the US and Germany. There's evidence that banks and private finance house are simply telling firms that there's no more money available," he said. "Pushing out the trade terms is a way of getting free credit. Some companies are doing this to limit their debt, but others have to because they can't borrow, and that is more dangerous," he said. Atradius insures roughly €400bn (£290bn) of world trade annually, giving it early warning data on credit stress. images/CB010325_LoRes.jpg Credit insurers see claims surge 12 true Julian Llewellyn Octempo:RM MD speaks at the first SME Connect business growth seminar http://www.Octempo.com/News.aspx 2008-10-23T09:00:00.0Z Julian Llewellyn, Managing Director of Octempo, was one of the keynote speakers at the first business growth seminar organised by SME Connect. The first series of six seminars is underwritten by the RBS Group, aimed at owners and business leaders of small and medium sized companies and are specifically designed to help them grow their businesses. The delegates get practical hints and tips that they can take away and implement in their business that will make a tangible impact on at least one of the four main themes: - Improving performance - Increasing profitability - Growing sales, and - Reducing costs During the seminars, business experts from different industries give the delegates advice on effective marketing, successful credit and cash flow management, HR and people efficiency, and on how to make the most of your banking relationship. The seminar was extremely well received by all delegates with the vast majority indicating they would be implementing some of the hints and tips received immediately. The next two seminars are planned for 7th November and 17th December 2008 and will be held at the RBS Group Spinningfields offices at Deansgate in Manchester. To register please go to www.SME-Connect.co.uk images/JLSMEConnect.png Credit insurers see claims surge 11 true Credit insurers see claims surge http://www.Octempo.com/News.aspx 2008-10-13T09:00:00.0Z The number of claims received by credit insurers has risen as businesses continue to take a knock from payment defaults. Figures released by the Association of British Insurers (ABI) today show that 5,702 claims were made to credit insurance firms in the second quarter of 2008, an increase of 14 per cent compared with the same period last year. Business debt of those companies with trade credit insurance rose by 36 per cent from last year to around £115m while the total value of claims increased by 31 per cent to just under £69m compared with the second quarter in 2007. "Trade credit insurance claims are a good indicator of what is happening in the UK economy and how that is affecting UK businesses," said ABI’s director of general insurance Nick Starling. "ABI figures on trade credit insurance show that UK businesses are really starting to feel the pinch. The last time we saw such a spike in the amount of bad debt and claims was in the period leading up to and during the dot com boom and bust in 2000." The statistics were compiled from data supplied by credit insurers Atradius, Coface UK, De Montfort, Euler Hermes, QBE (Europe) and Zurich. images/Bills.jpg Credit insurers see claims surge 10 true Small businesses feeling the credit crunch http://www.Octempo.com/News.aspx 2008-10-07T09:00:00.0Z The results of a recent poll of small firms have been sent to the Bank of England in the hope it prompts an immediate cut in interest rates. The snap survey, carried out by the Federation of Small Businesses (FSB), found that the credit crunch and the economic slowdown are having a profound effect on the small business sector. Of the respondents, more than four in five reported that their costs had increased in the last year. Some 46 per cent said that they had suffered a decrease in trade. On the question of business finance, such as loans and overdrafts, 40 per cent had experienced increases in the cost of borrowing from the clearing banks. Over half (51 per cent) have had to deal with customers extending the length of time it takes to pay invoices, reflecting concerns, the FSB said, that large companies are improving their cash flow on the back of their smaller suppliers. images/CB010325_LoRes.jpg Small businesses feeling the credit crunch 09 true Soaring insolvencies strike UK businesses http://www.Octempo.com/News.aspx 2008-08-01T09:00:00.0Z The number of receiverships, administrations and company voluntary arrangements (CVAs) rocketed in the second quarter, according to official Insolvency Service statistics published today. In total there were 177 receiverships, 938 administrations and 131 CVAs – a massive 63.1 per cent higher than the same period last year. The number of company liquidations rose by 15 per cent with 3,560 compulsory liquidations and voluntary liquidations in England and Wales in the second quarter. The number of businesses voluntarily liquidating rose by 27 per cent on 2007. In Scotland, however, company liquidations fell 20 per cent. Nick Wood, recovery and reorganisation partner with Grant Thornton, said the fact that the restructuring and insolvency departments of banks and major accountancy firms were gearing up for a significant flow of work in the autumn was a clear indication of the scale of business difficulties. "The negative sentiment expressed in a huge range of economic indicators is now feeding through to the real economy, with businesses that a year ago had been able to paper over the cracks now being fully exposed. Unfortunately, this feels like just the beginning." He added: "House building is almost dead in the water at present, with jobs within the industry disappearing by the day. We have seen examples of property companies preferring to lose their deposit rather than complete on land purchases. As a gauge for the wider economy, this is not good news." Those sectors directly affected by discretionary consumer spending, including retail and leisure businesses such as pubs and restaurants are also set for a very turbulent time in the next 18 months, said Wood, though he added that no sectors were immune. Meanwhile, individual insolvencies in England and Wales decreased slightly, down 8.3 per cent on last year. The exception was Scotland, where bankruptcies (sequestrations) rose 78.3 per cent as a result of the inclusion of 1,709 LILA (low income low asset) bankruptcies, which were introduced in April. Experts said lower personal insolvency figures are misleading as they do not reflect growing levels of consumer distress. Bev Budsworth, managing director of The Debt Advisor and Credit Today’s 2008 ‘Debt Counsellor of the Year’ said: "It was to be expected that the levels of IVAs would reduce. Some insolvency practitioners are still not using the new IVA protocol and are therefore finding that more and more IVAs are being rejected by creditors’ strict criteria. Secondly, although we have experienced the so-called ‘credit crunch’ for a year now, I believe that we are still in the ‘calm before the storm’ in terms of its effects." She added: "One prevalent area not covered in these statistics is the level of more informal debt management plans which can be offered by providers who are not qualified IPs. I suspect that the levels of debt management plans would have shown a significant increase this quarter." Source: Credit Today Online images/crunch.jpg Soaring insolvencies strike UK businesses 08 true UK companies under greater pressure to improve cash generation http://www.Octempo.com/News.aspx 2008-07-23T09:00:00.0Z The impact of the credit crunch is hitting UK-headquartered companies much harder than their US peers, according a new survey by professional services firm KPMG. Far more UK companies are experiencing delayed payments from customers, reduced access to credit, increased financing costs and suppliers demanding earlier payment, compared to their US counterparts. “Given that the credit crunch began in the US, it is interesting - and perhaps surprising - to see that UK companies are feeling the pinch more than their transatlantic counterparts,” said Andrew Ashby, Director in KPMG Advisory. “This may be because stakeholders such as banks, shareholders and non-executive directors are being more proactive forcing UK companies to take action before they get into difficulty.” In conjunction with CFO Research Services, KPMG asked 342 companies with revenues ranging from £250 million to more than £20 billion about how the credit crisis was affecting their management of working capital. When asked how companies plan to address these cash flow challenges, 49 per cent said they plan to negotiate longer supplier payment terms, while 46 per cent said they would tighten credit lines to customers. But such traditional, knee-jerk responses will only make matters worse for all but a handful of firms. “Adopting the same old blinkered approach of squeezing your suppliers and delaying payments is a zero sum game where only few winners will emerge,” warned Andrew Ashby. “Companies need to be more focussed on gaining improved visibility and control of cash and to work smarter across the supply chain to create win-win opportunities that reduce the cash cycle for all participants.” The survey found that increased pressure from stakeholders such as lenders, investors and analysts was seen as the greatest impact of the current credit environment with 76 percent of UK respondents saying its impact was high, compared to just 23 percent among US companies. Similarly, far more UK companies (75 percent) are experiencing delayed payment from customers than their US peers (23 percent); reduced access to credit – 75 percent in the UK, only 14 percent in the US; and increased cost of credit – 71 percent in the UK, versus 19 percent in the US. Suppliers are also demanding early payment, according to 73 per cent of UK respondents, compared to just 12 per cent of respondents in the US. And although 96 percent of companies use some form of cash flow forecasting, only 10 percent say they are accurate. The news is worse for UK companies, with only a quarter of companies achieving plus/minus ten percent forecast accuracy compared to 64 percent of US companies. “In the current environment of high debt multiples and restricted access to new credit, accurate visibility of when and how much cash the business will generate is critical,” Andrew Ashby added. Other key findings include: 88 percent of UK companies expect having to delay or revisit refinancing plans in the next 24 months. 46 percent of respondents are worried the economic environment will result in increased exposure to bad debt. Working capital performance at UK companies has faired much better over the last three years and is forecast to maintain the same trend of flat or improving. This compares with 51 percent of US companies that forecast a deteriorating over the next three years in their working capital performance. 84 percent describe cash management as a top tier priority but 25 percent still don’t link executive compensation to cash flow targets. One bright spot from the survey is that just four per cent of UK firms plan to reduce capital expenditure over the next two years as a result of tightening credit market – in the US the figure is 50 percent. Andrew Ashby concluded: “By gaining visibility and control of cash flows, companies will be able to identify the areas where they can generate more cash. While working capital tends to be a large area of opportunity companies should also look at cash generation from tax, treasury and other assets on the balance sheet. To drive sustainable improvement, leading companies embed cash management into the strategic decision-making process. “One way to do this is for companies to incentivise executives to manage cash flow better. Those that do have fared better over the past three years and expect to suffer less in the future.” Source: Business Credit Management UK images/news.jpg UK companies under greater pressure to improve cash generation 07 true More firms to fold than forecasted - Credit Today Online http://www.Octempo.com/News.aspx 2008-06-17T09:00:00.0Z The number of businesses going bust over the next two years is set to rise by almost 20 per cent, according to accountancy firm BDO Stoy Hayward. This is worse than expected as the BDO Industry Watch report shows a significant increase in the predicted number of companies going insolvent. In December it was forecasted that business failures would rise by 11.4 per cent between 2007 and 2009. Only six months later the number of company insolvencies during that same period is expected to increase by 18 per cent in light of rising energy and food prices, decreasing consumer confidence, falling house prices and restricted availability of capital. As business conditions worsen, failures are expected to rise to 17,874 in 2008, from 16,168 in 2007. This figure will continue to increase in 2009 with figures expected to hit 19,124, the highest level since the dot.com bubble burst in 2002, which saw 19,928 company insolvencies. For the first time since the reports began in 2003, there is not one sector that is expected to see a fall in business failures over the next eighteen months, a sign that the effects of the credit crunch are taking hold on the real economy. In 2009, figures for all sectors except technology, media and telecoms, are set to ‘escalate’ – a term indicating that business failures in each sector will rise by more than ten per cent a year. "This is a sure sign that the impact of the credit crunch is going to have a bigger lag than expected on UK business. Six months ago there was hope that business would feel some respite if the Bank of England slashed interest rates," said Shay Bannon, business restructuring partner at BDO Stoy Hayward. "But spiralling inflation figures now mean that this is unlikely in the short term. With the number of business failures expected to decrease in 2010, there is light at the end of the tunnel. But until then companies need to batten down the hatches and put in place some tactics to weather the storm over the next eighteen months." images/chessboard.jpg More firms to fold than forecasted 06 true Late payment across EU worsens - Credit Today Online http://www.Octempo.com/News.aspx 2008-05-21T09:00:00.0Z European businesses lost out on a record €250bn (£198bn) last year as a result of outstanding invoices, according to credit management company Intrum Justitia. Intrum’s European Payment Index, which assesses the payment behaviour in the European Union’s member states, said the figure is almost equal to the domestic product of Belgium. Not only did the total sum of outstanding invoices rise to record heights but the percentage of unpaid invoices was also at its highest level ever at 2 per cent compared to 1.9 per cent in 2007. Intrum said it is a worrying development and that the European sum of outstanding invoices will continue to rise in light of the credit crunch and rising food and oil prices. "You can see the emergence of a vicious circle, in which the large businesses are the first to start to pay more slowly. Smaller businesses are forced to follow suit," said Intrum’s president and chief executive Michael Wolf. "This has dramatic effects on economic development; forward propulsion is lost because investments are postponed. Company cash is ‘frozen’ in unpaid invoices and borrowing from banks continues to be difficult and costly." He added that businesses are allowing themselves to be blinded by the good economic situation of the past years and that speedier debt collection is crucial to the survival of businesses. "They are doing well and making good profits. In addition they find it awkward to address their customers on the subject of their payment behaviour," he said. "They have lost sight of the fact that the banks are responding to the credit crunch by becoming more difficult when it comes to providing loans. This really has to change." Southern European countries, such as Greece, Cyprus and Portugal, headed the league of payment defaulters while the Scandinavian states were found to be the best payers overall. Payment times rose slightly in Switzerland, Spain, Italy, Ireland and France, while the UK remained the same. The European government bodies proved to be the worst payers, taking an average of 65 days to pay an invoice, compared with 55 days for the business community and 40 days for the consumer. On average the number of days before an invoice was paid in Europe rose to 55.5, which is almost four weeks late. images/euflag.jpg Late payment across EU worsens 04 true Leap in companies going into administration http://www.Octempo.com/News.aspx 2008-04-09T09:00:00.0Z The rate of corporate failures has increased for the first time in over 12 months, according to Experian, one of the UK’s leading credit reference agencies. Figures released today show that 4,798 businesses became insolvent in the first three months of 2008, an 8.5 per cent increase on the same period last year... images/CB010325_LoRes.jpg Leap in companies going into administration 03 true Octempo:RM publishes the country guide for China http://www.Octempo.com/News.aspx 2008-04-11T09:00:00.0Z Octempo:RM has recently launched the next edition in a series of specific country guides. An insightful guide to China is now available. To receive your free copy of the complete guide contact us throught he request a call back page. images/china.jpg Octempo:RM Publishes New Country Specific Guides 02 true Debt crunch sparks bankruptcies http://www.Octempo.com/News.aspx 2008-02-13T09:48:32.0Z Companies are starting to go bankrupt at a disturbing rate in Britain, the United States and Europe as the debt crisis spreads to routine forms of trade credit, choking off the finance for suppliers at the end of the commercial chain... images/news.jpg Debt crunch sparks bankruptcies 01 true Understanding the importance of the language and culture http://www.Octempo.com/News.aspx 2008-03-03T09:48:32.0Z Understanding the importance of the language and culture of your customer cannot be underestimated. We take a slightly irreverent look at some companies who neglected this at their cost... images/news-2.jpg Understanding the importance of the language and culture