Page 24 - PWM2023_March

BETTER BUSINESS

Facing tough

times

The world is in trouble. Interest rates are rising,
demand is down, energy is viciously expensive and
there’s war in Ukraine, by Adam Bernstein

F post’ famously ranks alongside ‘I’ll
or Britain, trying to find a slow period of decline.
new path after leaving
As he says, “‘The cheque is in the
Europe, the year has been
still love you in the morning’, as one
particularly painful. With
recession, which the Bank of the great promises in life. Taking a
of England says will last
for a couple of years, the only saving long time to pay an invoice may in
fact be a sign of a well-run company
grace is that it’s not expected to be too which is prudently managing cash-
deep. As a press release from mid- flow. Negotiating longer credit terms
October from EY noted, “the risk of a to pay suppliers is an approach infa-
severe downturn has been reduced by mously deployed by certain UK
the government’s intervention on supermarkets.” But he warns that for
energy bills; the UK economy is other companies, without such clout,
expected to contract around 0.2% delays in making payments should
each quarter from Q4 this year set alarm bells ringing.
(2022) through to Q2 2023”. Other tell-tale signs he recom-
Figures released by the Insolvency mends looking for include a change
Service for September (2022) show in staff because of unpaid wages, fail-
that there were 1,679 registered ure to file accounts at Companies at Companies House for its Follow service in order to monitor filings from
company insolvencies in September House maybe because of an unpaid key suppliers and customers.
2022, 16% higher than in the same auditor, or a notice that debt has He also recommends chasing down unpaid debts and “making sure com-
month in the previous year (1,453 in been factored as an attempt to mercial partners know you will not be fobbed off by repeated promises to
September 2021) and 11% higher improve cashflow. pay. Remember, if you are in a hole, don’t keep digging and don’t be afraid
than the number registered three Regardless, Taylor says to apply to call their bluff by putting them on a stop list”.
years previously (pre-pandemic; common sense and put in measures Other options are to insist on payment for the remainder of the goods if a
1,508 in September 2019). to protect your own business. customer questions part of an order; and getting to know the payment run
Print firms, like those in other sec- dates. “Ring them up the day before and make sure your invoice is
tors, need to ‘recession proof’ them- Credit Control included,” he says.
selves. But how? We asked for the It’s an elementary principle of
legal lowdown. business that to avoid unpaid debts in Retention of Title
Paul Taylor, Fox Williams the first place requires the imple- Next on Taylor’s list of tools to deploy, for those involved in the supply of
mentation of what Taylor terms “a goods, is Retention of Title (RoT). However, he says that a well drafted RoT
Warning signs robust credit control policy”. clause will be of little use unless it is properly incorporated into commer-
Paul Taylor, a partner in the corpo- In outlining what it should con- cial dealings.
rate department of Fox Williams, tain, he says that it involves taking This is why he says: “At the very onset of a commercial relationship
makes a key – and very obvious – out credit insurance which pays out if make sure that your customer signs a copy of your terms. Make sure your
observation, that companies do not customers default; setting credit lim- terms are then included on your purchase forms/invoices.”
go from being in rude financial its for individual customers with dis- But Taylor says that it’s essential that firms take advice on specific word-
health one minute to insolvency the counts for early settlement and ing of contracts. By way of example, he says that there should be “sub-
next. There is, in other words, often a interest for late payment; registering clauses which oblige the customer to store the goods separately and also to

24 PrintWeek MENA March 2023 www.printweekmena.com