Credit managers let out the reins and relaxed their commercial debt management strategies in Q1 2010, in a sign that business confidence is returning, according to Lovetts Plc, the leading debt recovery law firm.

In Q1 2010, the average commercial debt being chased for payment rose by almost 40%* compared to Q4 2009 suggesting that businesses are prioritising bigger and more significant debts. In addition, the length of time it is taking for companies to chase payments has increased. Late payers are getting an extra 5 days to pay, compared to the previous Quarter, before an LBA is issued and an extra 7 days after the LBA has been issued, before a claim is made.

However, Lovetts is warning that this renewed confidence could be short-lived if businesses fail to apply stringent debt management controls across the whole of their business.

Charles Wilson, Chairman and Managing Director of Lovetts says, “As the old adage goes, ‘look after the pennies and the pounds will take care of themselves.’ When it comes to debt recovery, the message is not far off this. It is of course vital for companies to chase up the large outstanding payments, but by ignoring the smaller ones, there is a danger that these sums will soon accumulate, putting cash-flow at risk.

“The cost of issuing a Letter Before Action (LBA) to chase up payments is extremely low in comparison to the amount of outstanding debt many businesses are facing. It therefore makes enormous financial sense to chase up all overdue debts to improve cash-flow.”

“Added to this, year on year, businesses are now waiting over 25 days longer before issuing an LBA. This delay could be costly, and puts companies at greater risk in what is still an incredibly uncertain economic environment. It’s simple: the quicker businesses chase up payment after the 30, 60 or 90 days of the payment terms has elapsed, the quicker they will see the money.

“Businesses need to remember that the tough times are far from over, despite the UK officially being out of recession. The next 12-18 months are pivotal for UK businesses and simply pursuing debts in a more effective and timely manner could spell the difference between success and failure.” Charles concludes.Credit managers let out the reins and relaxed their commercial debt management strategies in Q1 2010, in a sign that business confidence is returning, according to Lovetts Plc, the leading debt recovery law firm.

In Q1 2010, the average commercial debt being chased for payment rose by almost 40%* compared to Q4 2009 suggesting that businesses are prioritising bigger and more significant debts. In addition, the length of time it is taking for companies to chase payments has increased. Late payers are getting an extra 5 days to pay, compared to the previous Quarter, before an LBA is issued and an extra 7 days after the LBA has been issued, before a claim is made.

However, Lovetts is warning that this renewed confidence could be short-lived if businesses fail to apply stringent debt management controls across the whole of their business.

Charles Wilson, Chairman and Managing Director of Lovetts says, “As the old adage goes, ‘look after the pennies and the pounds will take care of themselves.’ When it comes to debt recovery, the message is not far off this. It is of course vital for companies to chase up the large outstanding payments, but by ignoring the smaller ones, there is a danger that these sums will soon accumulate, putting cash-flow at risk.

“The cost of issuing a Letter Before Action (LBA) to chase up payments is extremely low in comparison to the amount of outstanding debt many businesses are facing. It therefore makes enormous financial sense to chase up all overdue debts to improve cash-flow.”

“Added to this, year on year, businesses are now waiting over 25 days longer before issuing an LBA. This delay could be costly, and puts companies at greater risk in what is still an incredibly uncertain economic environment. It’s simple: the quicker businesses chase up payment after the 30, 60 or 90 days of the payment terms has elapsed, the quicker they will see the money.

“Businesses need to remember that the tough times are far from over, despite the UK officially being out of recession. The next 12-18 months are pivotal for UK businesses and simply pursuing debts in a more effective and timely manner could spell the difference between success and failure.” Charles concludes.

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.

Doubts were raised yesterday over the commitment of the major parties to increase government spending with small and medium sized enterprises, SMEs. At a panel reception for Women in Public Policy chaired by Baroness Symons in the House of Lords last night, the Chief Executive of a major independent employment company criticised all three parties for their piecemeal approach to government procurement through SMEs.

Joy Nichols, Chief Executive of the CMB2 Group and a spokesman for The Enterprise Trust, a think tank for industry, said that the Conservatives were only pledging to widen procurement opportunities for small and medium sized ICT companies. “They seem to suggest that ICT were in some way more deserving of greater procurement opportunities than any other SME businesses. The Labour Party manifesto have only 24 lines on support for Enterprise and mentioned SMEs only once. The Liberal Democrats in their manifesto had just four lines on Enterprise and not a single mention of SMEs or government procurement.

The Enterprise Trust has been calling for a proper debate on the definition of small and medium sized enterprises; a reasonable share of all government contracts, and a fundamental change in the law that signs up the UK to treaties with the World Trade Organisation that specifically exclude the setting aside of contracts for the SME sector.

“Because the SME sector is an ill-defined sector, many companies are excluded from their rightful share of all government procurement. Instead, they are dependent on scraps from the large corporations who gain or in some cases are given these contracts.”

The Enterprise Trust now believes that a common denominator in the policies of the Conservative and Labour Parties is the economic advisor to the Tories, Sir Peter Gershon. Previously an advisor to the Labour government he has taken the line that procurement should be aggregated into large contracts and not broken down for specially set aside funds to be used for procurement through SMEs.

Also involved were American members of Women in Public Policy who described the success of small and women-owned business gained through government procurement systems used in the United States. And they heard that at least the Tory manifesto admitted that governments in Britain have a dreadful record in managing procurement with billions of pounds wasted.

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.