Late payment culture is getting worse

The trend towards delayed payment of invoices seems to have been made more prevalent since the recession took hold. Certainly we have noticed it. But the fact that so many businesses in the UK have become accepting of this 'late payment culture' is certainly a cause for concern as it is having major implications on the whole business community and economy.

 It is sad that it is the smaller businesses that take the strain and in the worst case scenarios have to fold.

 In some cases, there will be genuine reasons for late payments which are unavoidable but businesses shouldn't have to accept that this is somehow the 'inevitable' or the 'norm' because there are ways to combat this and keep your credit control in good shape.

 Without any current legislation in place, businesses need to have concrete terms and conditions in place and have the courage of their convictions to see them through. All too often businesses are allowed to get away with late payments as small businesses are worried about relationships souring and ruining repeat business.

 However business is business and cash flow is, and always will be king.

 More than 260 businesses across a number of industry sectors participated in a study recently, by positivecollections.co.uk, the online debt recovery service for businesses and consumers, which found that:

• Small to medium sized businesses are the most likely to suffer from late payers (with 74 per cent stating that they are likely to accept late payment excuses).
• 10 per cent of organisations avoid chasing debts in the first place as they are worried about losing future business or simply feel too uncomfortable about broaching the subject.
• 16.5% of businesses would try to chase debts but avoid legal action as they believe its too expensive

See www.positivecollections.co.uk

The Referrals Industry needs to be cleaned up not banned

The government is worried the current referral system has created a US-style "compensation culture", in which people are encouraged to launch frivolous claims by law firms who have bought their contact details and are offering to work on a "no win, no fee" basis.

Those in favour of a ban say it would force lawyers to win clients purely on the basis of quality and cost, as well as bringing legal fees down.

However a ban will make it harder for less well off people to gain access to justice, particularly if law firms are banned from working on a "no win, no fee" basis.

Handled correctly, the referrals system is a useful marketing tool for lawyers, and nothing more sinister for consumers than a form of targeted advertising.

The problems are occurring from unscrupulous claims management companies, who are illegally selling on details without the authority to do so. In this respect the industry needs to be cleaned up. 

However many insurers provide a valuable service in terms of quality control. service delivery and best practice for panel solicitors, which ultimately benefits the Client.

With Law firms having to work so much harder to stand out from the competition, something that is only going to get more difficult with the launch of the legal services act in October, it doesn't seem  fair  to ban a legitimate and successful marketing tool.

 

Phone Hacking at News of the World

The News of the World is in increasing dire straits this morning as allegations of phone hacking mount. If it is indeed true that the phones of Milly Dowler, Jessica Chapman, Holly Wells and the 7/7 victims among others, were hacked they are going to see the wrath of the nation in their sales figures.

 

People will have much more sympathy in these new cases than previous allegations of celebrities and politicians having their privacy invaded. The public horror that this kind of thing has gone on will no doubt have a massive impact on News of the World sales as people lash back in the only way they can and boycot the paper.

 

Already the News of World is seeing its advertising being pulled and mounting calls for Rebecah Brooks (nee Wade)  now Chief Executive of News International in the UK and previously the newspapers editor, to resign.

 

Business decisions have to be made but it just goes to show that even in the heat of the moment, when a deal is being done, you must act professionally, morally and do the right thing. Otherwise quite rightly you will pay the consequences. 

 

This is an interesting, informative blog on business ethics: http://tutor2u.net/business/strategy/business-ethics-introduction.html