SME - what is preventing growth?

Small and Medium enterprises have been affected the most by the decline in banks lending. There can be advantages to alternative sources of lending to small and medium enterprises can be the key to growth.

No matter what form of finance you are considering give us a call on 0844 811 9463.

What we do to help with ensuring you have healthy cashflow?

Credit Control  

Due to lack of resources and/or time, companies are turning to outsourcing to remedy their credit control issues.

Credit control outsourcing will bring the following benefits:

• Improved cash flow
• Reduction in bad debt
• Improved working capital
• Reduced bank charges
• Staff free to concentrate on core business issues
• Continuity of service

Liquid Recovery continues to invest in IT and telecommunication which allows us to offer confidential credit control, as well as disclosed service to UK clients.

How do we do it?

• We have a cloud system that allows you access to see on real time what is has been said and what invoices will be paid, when and how
• Outsourcing your credit control couldn’t be easier. You simply provide us with an up to date customer list and a ledger on a regular basis, and we do the rest,
• We are pro-active in our chasing;
• All payments from your debtors will still go direct to you – we do not handle any money.

Credit Control – The Rules

Do:

• establish payment terms before you start selling on credit
• set and enforce credit limits
• chase payments as soon as they become due

Don't:

• provide credit without knowing your customer
• offer credit you can't afford
• be afraid to insist that customers meet their payment obligations you won’t lose your customer by asking them to pay
• continue extending credit to customers with poor payment records

Always use the telephone and never the email. Why?

If you email your customer it falls into all the other emails and won’t get considered. Also tone does not come across on emails and if you are looking to continue your business relationship with your customer emailing does not help in chasing the money.

By picking up the telephone you are maintaining that good business relationship with your customer. 

Make sure you ask the client whether they won’t pay or can’t pay!

Tip: Helping SME’s: Before speaking to the Bank for Finance...

What to do before you speak to the bank for an overdraft or loan.

 1.       Review your ledger – how much monies are overdue. Get the money in even if it means getting a debt recovery involved. The healthier your ledger the more attractive the company.

2.       Have your plant and machinery valued see if you can raise finance another way

3.       Review your credit control processes to assure anyone lending you finance that you have the right systems and process in place.   

Tip before speaking to the Bank for Finance - Helping SME

 What to do before you speak to the bank for an overdraft or loan.

1.       Review your ledger – how much monies are overdue. Get the money in even if it means getting a debt recovery involved. The healthier your ledger the more attractive the company.

2.       Have your plant and machinery valued see if you can raise finance another way

3.       Review your credit control processes to assure anyone lending you finance that you have the right systems and process in place.   

SME and Finance

LET US KNOW IF YOU AGREE WITH THIS ARTICLE BY BUSINESS MONEY

http://businessmoneynews.net/index.asp?ItemID=1422&rcid=75&pcid=69&cid=75

Project Merlin - target for lending to smaller firms missed - February 13, 2012

Figures released by the British Bankers' Association have shown that the five main UK banks missed their Project Merlin target for lending to smaller firms, but exceeded the overall lending target.

The banks met their overall commitments last year, with gross new loans of £214.9bn, but £74.9bn was lent to smaller firms - less than the £76bn target.

Stephen Gildert, EMEA head of SME lending at Experian, commented: “Demand for finance from creditworthy small businesses is subdued. There was a great deal of hunkering down and managing for cash throughout the downturn, and many of those now looking to invest are turning to cash reserves in order to fund growth ambitions. Flexible forms of finance are very much the flavour of the day for those that do want credit.”

Highlights from recent Experian research into SME finance:

·          Three quarters of the SMEs polled stated that they had access to additional cash that they could use within their businesses.

·          Almost half claimed they had access to cash reserves that they could use to fund their growth activities, while 19% had money set aside to cover emergencies.

·          Just under a quarter of firms polled intend taking on new credit during 2012.

·          Of the firms polled, 33% were undecided as to whether they would take on new finance.

·          Of those that intended to borrow, the greatest demand will be for flexible forms of finance such as business overdrafts (26%) and company credit cards (23%).

·          Only 8% of firms that had previously applied for commercial credit claimed to have been unable to obtain it.

Article Business Money News

A Big Thank you from Human Film

Liquid Recovery worked quickly and efficiently, recovering the debt within one week. Liaising with them was simple and required very little input from our side, freeing up valuable time for us to expand our business. Highly personable, liquid were a pleasure to work with. Their approach to debt recovery was clean and professional at all times and their service exceeded all expectations.


Many thanks,
Isabelle

Because your invoices should be paid on time.

 "If anyone is looking for an articulate, friendly & knowledgeable debt recovery service then look no further than Rashmi !. I can attest to her rapid service, even debts we have been trying to recover for YEARS were paid within the week once Rashmi was on the job, incredible or what !. We have tried for years to find a good debt recovery / debt management Company and now we have we won't be moving anywhere else - I highly recommend you speak to this Lady and the team at Liquid Recovery for credit control or debt recovery.

- Steven Barrett Managing Director, Portel AV Limited"

What are clients say about Liquid Recovery

“Hi Team,

 

I would like to thank you for the service you provided  in recovering an outstanding debt owed to me, you were totally professional and very speedy in resolving this dispute, I would have no hesitation in recommending you to anyone in the same unfortunate position.

 

I also found your fee’s more than reasonable; I have every confidence in the future of challenging any none paying debtors knowing you’re around!!!

  

Thank you once again.”

Steve Wright
Director

Nationwide Decorators Ltd

Liquid Recovery and Avanti working to help the SME

Liquid Recovery is here to help businesses with ensuring they have a healthy cash flow.

There will be occasions when recovery of a long outstanding debt will be sufficient to solve a short-term funding gap.  In addition, in cases when credit management and credit control are key issues this will potentially have a permanent, negative impact on the cash flow cycle of a business. 

Examination of systems and procedures should be a starting point – tightening up on credit policy, audit trail and chase-up procedures is fundamental to ensuring debt turn is optimised.  When this is not enough to meet business needs, Liquid Recovery would look beyond its usual remit and call upon independent support to put in place a bespoke financial solution to help.

Avanti provides a fast, free, independent specialist service to businesses requiring Factoring or Invoice Discounting.  It helps owner-managed businesses in a variety of situations including: new starts, periods of expansion, financial stress (e.g. CCJs and voluntary arrangements) and re-structures.  Invoice finance will release the cash that is tied up in an unpaid sales ledger to improve working capital and finance expansion.  Avanti has strong relationships with bank funders and independent financiers and can find a facility that meets individual funding needs and service levels at the most competitive price.

If you would like to know more email info@liquidrecovery.co.uk or call 0844 811 9463 quote MK/B.Coo

Financing small businesses

Financing small businesses is mostly done with loans, which can be easily availed if you have all the required documents ready.

Bank loans are the most common, provided that you meet all the requirements. Usually, the rate of interest of bank loans is very high, the amount of funds you can get is very limited. That is why, most of the small business owners need to be aware that there are other options

             1.       Factoring coupled with an active credit control process

 Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. In "advance" factoring, the factor provides financing to the seller of the accounts in the form of a cash "advance," often 70-85% of the purchase price of the accounts, with the balance of the purchase price being paid, net of the factor's discount fee (commission) and other charges, upon collection. In "maturity" factoring, the factor makes no advance on the purchased accounts; rather, the purchase price is paid on or about the average maturity date of the accounts being purchased in the batch.

2.       Invoice discounting coupled with active credit control process

Invoice discounting is a form of short-term borrowing often used to improve a company's working capital and cash flow position. Invoice discounting allows a business to draw money against its sales invoices before the customer has actually paid. To do this, the business borrows a percentage of the value of its sales ledger from a finance company, effectively using the unpaid sales invoices as collateral for the borrowing.

Although the end result is the same as for debt factoring (the business gets cash from its sales invoices earlier than it otherwise would) the financial arrangement is somewhat different.

    3.       Asset Based Lending

       In the simplest meaning, asset-based lending is any kind of lending secured by an asset.

There are other options the above are just a few. If you would like more information please give Liquid Recovery a call on 0844 811 9463 or email info@liquidrecovery.co.uk

Worry only about the things that are in your control, the things that can be influenced and changed by your actions, not about the things that are beyond your capacity to direct or alter.

One of the main things in any business in your control no matter how large or how small you are is to get paid on time.

Many people believe that they will lose their customers if they chase them for payment. This is a false belief.

1.       If you tell your customers that you are incorporating a credit control system your customer will see you as a more professional body and  will understand when you chase them for the outstanding payment that it is part of the system.

The difficulty lies in when you are a small business and you deal with the day to day operations and sales. If this is the case see if you can get someone else to make those phone calls for you, or send a generic reminder email.

Remember the customer has taken your goods or services and is expecting to pay, they usually just want to see how long it will take before they have to make payment.

So if you are worried about cash flow and are not getting paid on time – this is one of those things that you can influence and change by the actions you take within your business.

Setting Up a Credit Control System

Mismanagement of cash flow is the single biggest reason that small businesses go under. Therefore, a good credit control system is an essential part of any business' accounting procedures. Maintaining consistent cash flow, avoiding bad debt and minimising late payments are essential for survival. Use the following checklist to set up a system.

Things to do

1. Set up a detailed credit control system

It must allow you to identify

·         Invoices that have been raised,

·         sent to customers

·         Paid

·         Need chasing

·         Train several people on the system and test it thoroughly.

2. Credit-check your customers

To do this, you can approach their bank for a reference; use a credit reference agency; or ask their other suppliers. Establish how solvent the customer is and whether they are likely to have any problems paying their invoices on time.

3. Decide on your general payment terms

Most importantly, decide on a payment date. Bear in mind that new customers should only be given a short time in which to pay. Go through the terms with each customer.

4. Send invoices promptly

Try to send all of them out the same day as goods are sent or delivered or service provided. Make sure the invoice is sent to the correctly named and titled person, at the right address.

5. Start an automatic reminder procedure

Flag invoices that are due; Phone, to chase up payment.

6. Appoint a 'debts person'

This should be a trusted employee in charge of following up bad debts. They should keep a record of all calls and letters sent. Remember you can charge interest under the Late Payment of Commercial Debts legislation.

7.  Have a stop list for late-paying customers

Circulate this list to all appropriate employees to prevent further credit or goods being supplied. Inform the late payer that they are on the list.

8. Organise a sufficient overdraft

You should have enough overdraft to cover the worst possible periods of cash flow.

Best practice

• Educate yourself/your staff with credit control training.
• Employ the services of a credit management consultant at least once every year to see if there are improvements you can make.
• Keep talking to debtors. Don't lose your temper with them, but make it clear you are prepared to take debt recovery action if they do not settle the invoice.

Predications for 2012

 HAPPY NEW YEAR all the best for 2012

Predications for 2012

As a business you can make your own predications. In order to develop and build your business you require systems and processes.

Have a efficient credit control system and improve your cash-flow.

How does this work?

1.       Have a person who is willing to speak to customers do the credit control.

2.       Ensure that you have a default diary in place to chase late payers immediately

3.       Do not allow them any leeway far too often we hear from our clients that they allowed their customers time to get paid from other people in order to allow them to get paid and the next thing you know 6 months have gone by.

4.       Be sure to draw a line in the sand and know when the outstanding amount has become a debt

5.       Chase the customer as soon as possible when payment has not been made on the promised date.

By ensuring you are getting paid on time allows your business to focus on growing.