This year has seen our business suffer from more bad debt in one year than in the previous ten. Trying to collect this has been a nightmare with the odds stacked against the claimant and the honest businessman in favour of the dishonest and corrupt who act in a fraudulent manner to obtain goods and services by deception.
I am heartily sick and tired of clients booking my services when they know they are either moving on or have no resources to pay. Despite taking out thorough credit checks and references it would appear that a number of "friends" are listed as suppliers with the intention of gaining services.
Every time this happens the story is the same, they do not have the money to pay.
In the case of limited companies these shut down and reopen a week later with the same Directors but a slightly different name leaving us with a non trading company to sue. Sometimes when the Bailiffs go in we learn that everything on the premises is leased from another company. One recent leasing company had the same Directors as the company that owed us the money.
If this Government is serious about private business bailing out the economy it needs to bring in laws that protect the honest business people and punishes the dishonest crooks that think nothing of fiddling others for their own greed.
I would appreciate any possible ideas on how to combat this problem before I meet with a member of the government on November 5th.
“In the case of limited companies these shut down and reopen a week later with the same Directors but a slightly different name leaving us with a non trading company to sue. Sometimes when the Bailiffs go in we learn that everything on the premises is leased from another company. One recent leasing company had the same Directors as the company that owed us the money. If this Government is serious about private business bailing out the economy it needs to bring in laws that protect the honest business people and punishes the dishonest crooks that think nothing of fiddling others for their own greed. I would appreciate any possible ideas on how to combat this problem before I meet with a member of the government on November 5th.” In the case of the Limited companies; when carrying out credit assessments are you also checking out the directors? This would show all the other companies that they are involved with and the credit ratings of those also and what other companies they have been involved in that have gone out of business. If there are lots of previous companies then ask questions or reject the application and demand a personal guarantee. If they reject, move on and deal with someone else. You have recourse to report any company directors who you feel have acted inappropriately you can report them to the IP that is acting in the case, they have a duty to investigate. It may seem like the IP is acting in the interests of the directors, but legally they are not, if you feel that they are then report them. You can report Directors to the investigations branch (link on companies house somewhere, have not got it at the mo.). There is no real way of getting around the problem 100%, never was, never will be and no Government will ever understand that. Any changes need major weight behind it from a lobbying body such as the FSB or ICM. Personally I can't see how many changes can be made to prevent people from getting credit and then doing a runner etc. If could go against the whole ethos of a limited liability company. The emphasis should be on making the punishment harder and giving more power or resource to the investigations unit, in these days of public sector cuts, I just don't see that happening. Credit-Manager.Net
What type(s) of business are you in, plse? What are your terms of trade? Over the years, we've been very fortunate in rarely suffering bad debts (touch wood, touch wood). Obviously, we make checks in advance but I think our good fortune has a lot to do with the type of business we're in and the fact I expect to be paid (by corporate clients too!) immediately the work's done. If you're the kind of customer who doesn't intend to pay, you go elsewhere, where the payment terms are less demanding. If you take the approach I do, though, you may also lose good business along with the bad. Sadly, I can't imagine any changes that would make bad debts less likely or easier to recover. Taking a case to court is inevitably a slow business (as well as an increasingly expensive one). Linda CareersPartnershipUK
I was sorry to read your post. In future, would it be appropriate for you to ask for a proportion of the payment from a new client, in advance? If the customer is serious about the work, this shouldn't be a problem. Holborn Direct Mail 020 8683 7155 |
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