CreditPal is an innovative new service allowing you to assess your clients’ default risk using their monthly management accounts rather than having to rely on their statutory annual accounts.

As the world’s first service to enable credit recommendations to be based on monthly management accounts, CreditPal has been designed to improve the flow of information to ratings agencies, insurers and banks. This revolutionary new online service, provided by credit reference agency Graydon UK and software developer Future Route, enables businesses to make accurate assessments of all their clients’ default risk using monthly management accounts.

SME businesses can upload their data for free via the web portal so all you need to do is encourage your suppliers and buyers to use it. In this way you can gain access to their up-to-date credit recommendations.

CreditPal extracts a copy of the management accounts from the users’ accounting package, encrypts and uploads the data to a secure web-based portal, then standardises and analyses every transaction to identify any anomalies. It then produces monthly profit and loss and balance sheet reports which the user can approve before they are fed into Graydon’s credit scoring system.

One business that piloted the service during its testing phase, described the process as “dead simple, a five-minute job” and saw its credit recommendation increase fourfold compared to when using statutory annual accounts. Another business saw its recommendation increase by twelve times.

For more information go to:

www.creditpal-online.com/home/

This does not mean the end of cheques as businesses will continue to be able to accept them and customers will still be able to write them.

During the next two years, those banks and building societies who provide cheque guarantee services will ensure businesses who still accept guaranteed cheques, and personal customers who still write them, are made aware of the closure date, and that they are given information about the alternatives. 

To help answer likely questions that businesses or consumers may have on this issue the Scheme has today published two fact sheets available below:

Guaranteed Cheques - Acceptors Fact Sheet (PDF)

Guaranteed Cheques - Consumers Fact Sheet (PDF)

You have one month less to file your accounts. For a private company it is nine months and six months if you are a public company. This applies to accounting periods beginning on or after 6 April 2008. If you file your accounts late you will be liable for a late filing penalty of up to £1500 for a private company.

Full details can be found on:  www.companieshouse.gov.uk/companiesAct/pdf/companiesAct_zCard.pdf

The Companies Act 2006 is changing the law for companies. These changes affect every company operating in the United Kingdom.  Passed in 2006, the Act reaches the fi nal stage of implementation on 1st October 2009. 

All Companies House forms will change from 1st  October  2009

The new forms include:

·         Companies Act 2006 information requirements

·         new numbers updated to be relevant to the 2006 Act

·         additional guidance notes

·         details of any fee (if applicable)

The new forms must be used for all company events that take place on or after 1st October 2009. If you use an old form it will be rejected.

Company events which take place before 1st October must be submitted on 1985 Act forms.

Specimen forms are available on the Companies House website:  www.companieshouse.gov.uk/act

• National postal strikes planned on Thursday 22nd October and Friday 23rd October

• Payments Council advises consumers to take advantage of convenient ways to pay bills, such as banking online

In response to yesterday’s announcement by the Communication Workers’ Union confirming the national postal strikes planned for Thursday 22nd October and Friday 23rd October, the Payments Council is advising all UK consumers to consider how the postal strike may affect their regular payment commitments.

For more information go to: http://www.ukpayments.org.uk/media_centre/press_releases/-/page/759/

• On average we only write 14 cheques per year and receive five, compared with 28 and seven just five years ago.
• New consumer advice guide – Advice When Writing and Receiving Cheques – published by Cheque and Credit Clearing Company

In response to the fact that we are using cheques less often than ever before, the Cheque and Credit Clearing Company has today published a reminder guide to help people avoid common pitfalls and safeguard themselves from fraud when writing and receiving cheques.

Click here to download the guide.

Avoid payment delays or default by adopting some simple “best practice” measures:

1. Know your customer

• Check the exact name and legal status of the company
• Use their letter head to verify company details, carry out a free check on companies house and make sure you have the trading and registered address
• Understand your clients’ purchasing processes and make sure purchase orders are from the company you invoice
• Invest in a credit check report for invoices over a certain amount or ask for trade references from other suppliers

2. Agree payment terms, price and other terms before you supply in writing

• Never “assume” anything and be very clear from the outset how you conduct business
• Obtain written acceptance of your terms and check that your customer’s order does not suggest different terms
• Set out late payment charges & interest in your terms – you don’t have to invoke them but it’s useful to have the right to do so
• Ensure that the payment terms you offer your customers are not more generous than the terms you have agreed with your suppliers. i.e. offering 45 day terms but having to pay within 30 days presents an immediate cash flow issue.
• Confirm verbal orders in writing and obtain customers’ signatures on delivery

3. Invoice accurately, clearly and promptly, attention to detail makes all the difference

• Invoice promptly – it can’t be paid if it hasn’t been received
• Invoice correctly – insufficient details regarding services or goods result in disputes and payment delays
• Quote customer references - missing PO references mean “payment hold”
• Address invoice correctly – incorrect company name or address on the invoice means it will be returned or ignored

4. Don’t be afraid to ask for payment, the only good customer is a paying customer, and if you don’t ask, you might not get

• For large invoices make a pro-active call before due date to make sure all is o.k.
• Don’t delay contacting the customer if payment is delayed
• Be assertive about when you expect payment
• Make consequences of non-payment clear
• Follow up payment promises
• Do what you say you are going to do when you said you would

1. Run a credit check on potential clients to avoid problems in the first place.
2. Have your Terms and Conditions clearly stated on your invoice and in your initial contract agreement.
3. Make it easy for them to pay. Include Bank Account Number and Sort Code, address, and purchase order number.
4. If you do not have a purchase order number or any written communication, make a note of the date when the verbal agreement was given, and confirm this by email or letter.
5. Submit unpaid invoices regularly each month.
6. If your customer is responsible for paying your bill, mention it in conversation, and if it is apparent there are difficulties, agree a date which suits you both.
7. Stop their account as a last resort if payment is not forthcoming.
8. For larger SME businesses make it a priority to speak to the accountant or FD who makes the decision. Find out when you can speak to them, and don’t be put off. You want to get to the top of the pile, so be very professional but persistent.
9. With corporates there may be technical reasons why you have not been paid. Make sure you have jumped any administrative hurdles and present your invoice in the correct manner for their internal process.
10. Stay on top of your own financial situation. Modern software is easy to use and can provide real-time reporting provided the data is input regularly.

Persistence and transparency are the key to getting paid. Use your relationship with your customers, and don’t wait until you are considering taking out a loan to pay the VAT bill even though thousands of ££ are owed – as one of my clients did.

If you feel it is all going to take up too much time, get in some external help. Staying on top of your accounts helps you claim the money that is rightfully yours, and avoid being investigated by the Inland Revenue. They have internal financial targets to meet, and financial disorganisation is an indicator of an easy target.

For a free no commitment phone call please ring
01628 487 849 www.armcreditcontrol.co.uk