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You are here: News » Archived News » Managing your cashflow during the pandemic

Managing your cashflow during the pandemic

Premium Collections - managing your cashflow

GM Business Connect spoke with Paul Daine, Managing Director of Premium Collections, about the cashflow issues of businesses affected by the pandemic. Paul commented: “As we now enter what hopefully should be the final phase of lockdown and the end of the Furlough scheme in April, many small business owners will have some very difficult decisions to make about their future and that of their business. If you run a business in the retail and hospitality sectors, you would probably have benefited from one or more of the Government schemes that have been available, but may still be struggling financially. However, if you don’t trade in the retail and hospitality sectors there has been little, if any, financial support to get you through the harsh times of the pandemic.

“One way to ensure a healthy return to normal is to keep on top of your credit control activity. Make sure you are contacting your clients regularly to chase payment of overdue invoices by letter, telephone, text and email. If they say they can’t pay ask them to prove it or ask them to make a token payment as a gesture of goodwill. By paying even £1.00 the debtor is acknowledging that they are liable for payment of the whole debt. If you still don’t receive payment then consider third party help from a debt collection agency or a firm of solicitors. They will help you recover the debt or issue a County Court Claim and, if you still don’t receive payment, they will also assist with enforcement of the Judgment.

“There was a significant increase in the number of County Court Judgments (CCJ’s) against both individuals and businesses in 2020 with 194,203 judgments registered against individuals in the final quarter of 2020 alone. The Government has introduced a number of changes to the Insolvency Act to create a low cost alternative to declaring Bankruptcy. If you have up to £30,000 of debts and up to £2,000 in assets you can apply for a Debt Relief Order, which will mean your debts (with some exceptions) will be written off after 12 months, although the DRO will show on your credit file for 6 years. If your debts are greater than £30,000 then Bankruptcy or an Individual Voluntary Arrangement may be the only options if you operate as a sole trader or partnership.

“If you operate as a Limited Company then Liquidation, Administration or a Company Voluntary Arrangement may be the answer to your financial problems. Whichever you decide, make the decision quickly as continuing to trade whilst knowing your business is insolvent could lead to prosecution. It’s crucial to seek professional advice before it’s too late.”

For more information contact Paul Daine on 0161 962 4695   enquiries@premiumcollections.co.uk   www.premiumcollections.co.uk

 

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