Credit crunch Strikes..
Discussion
As we dont tend to finance thing for the company I hadnt really given the credit crunch a second though..
Then to day I order about a grands worth of kit from a supplier I've put about 100k's worth of work through in the last 5 years..
mail came back saying they had dropped our credit limit from 10k to £1. concerned I phoned their accounts department to inquire why.. Turns out their credit underwriters ( is that the same a factoring?) had replied with " Not enough company info" and given us a zero rating !!! bearing in mind we've been in business for 10 years, never made a loss, or not paid a bill ( or even late) never bounced a cheque or anything I was still concerned
So I phone their credit underwriters to ask them... their response is that due to the current economic situation they want to see audited accounts of less than 6 months to give anyone a rating... now as our year end was only 12 days ago i haven't even bothered thinking about them yet !!! ( usually a panic in about 9 months time !!!
I wouldnt care but its only 30 day terms !!!!
slightly disgusted by the actions of a long term supplier, that they didn't take our history with them into account.... maybe I'll not be a customer for much longer...
As I've quoted a job using their kit I paid them on my debit card, but it may be the last time i use them
Then to day I order about a grands worth of kit from a supplier I've put about 100k's worth of work through in the last 5 years..
mail came back saying they had dropped our credit limit from 10k to £1. concerned I phoned their accounts department to inquire why.. Turns out their credit underwriters ( is that the same a factoring?) had replied with " Not enough company info" and given us a zero rating !!! bearing in mind we've been in business for 10 years, never made a loss, or not paid a bill ( or even late) never bounced a cheque or anything I was still concerned
So I phone their credit underwriters to ask them... their response is that due to the current economic situation they want to see audited accounts of less than 6 months to give anyone a rating... now as our year end was only 12 days ago i haven't even bothered thinking about them yet !!! ( usually a panic in about 9 months time !!!
I wouldnt care but its only 30 day terms !!!!
slightly disgusted by the actions of a long term supplier, that they didn't take our history with them into account.... maybe I'll not be a customer for much longer...
As I've quoted a job using their kit I paid them on my debit card, but it may be the last time i use them
Glad its not just me then.Its happening everywhere and is the biggest risk to business in this country.
Its what drove Woolies under.
In France the government has become an indemnifier of last resort. Our government of course has done absolutely nothing as Brown is too concerned with his own public image, the fat useless
.
Any sector, industry or business that insurers dont like the look of, seemingly entirely arbitarily, the limit is cut and that is that.
This, after 10 years of finance and entire industries being oiled by debt based models is of course far from ideal.
Its what drove Woolies under.
In France the government has become an indemnifier of last resort. Our government of course has done absolutely nothing as Brown is too concerned with his own public image, the fat useless
.Any sector, industry or business that insurers dont like the look of, seemingly entirely arbitarily, the limit is cut and that is that.
This, after 10 years of finance and entire industries being oiled by debt based models is of course far from ideal.
Yeah so glad we dont rely on credit terms, most of our business is consultancy, so only labour.. H/w is a pain as margins are so low, and if you've got to finance it all yourself it must be a nightmare...
If its even effected us I can see so many viable businesses going under just due to cashflow drying up..
If its even effected us I can see so many viable businesses going under just due to cashflow drying up..
Thier underwriters are not the same as factoring. They obviously credit insure i.e. get insured against you going under owing them money.
THe credit insurers are taking a massive hit this year and responding in kind with insured limits.
One of the bigger ones (Amlin) has left the industry altogether and existing policies it is striving to drive away by refusing to insure anyone.
If you talk direct to the insurer you can often get your limit back-particularly if you can produce up to date management accounts.
ALso-a £1 limit doesn't neccesarily mean £1. It is an insurer distinguishing between zero and your suppliers descretionary limit. For example-if we had a client who had spent £100k with us and paid on time (give or take a decent margin) if our insurer gave us a £1 limit then that client would actually have a £10k limit. Worth asking your supplier.
THe credit insurers are taking a massive hit this year and responding in kind with insured limits.
One of the bigger ones (Amlin) has left the industry altogether and existing policies it is striving to drive away by refusing to insure anyone.
If you talk direct to the insurer you can often get your limit back-particularly if you can produce up to date management accounts.
ALso-a £1 limit doesn't neccesarily mean £1. It is an insurer distinguishing between zero and your suppliers descretionary limit. For example-if we had a client who had spent £100k with us and paid on time (give or take a decent margin) if our insurer gave us a £1 limit then that client would actually have a £10k limit. Worth asking your supplier.
I spoke to the insurer and they would only accept audited accounts of less than 6 months old.. my last set are older than that as my year end is December so I've obviously not even thought about doing them yet...
The supplier were taking it as a literal limit of £1 !!!! I think its the suppliers attitude im more annoyed with....
The supplier were taking it as a literal limit of £1 !!!! I think its the suppliers attitude im more annoyed with....
Graham said:
As we dont tend to finance thing for the company I hadnt really given the credit crunch a second though..
Then to day I order about a grands worth of kit from a supplier I've put about 100k's worth of work through in the last 5 years..
mail came back saying they had dropped our credit limit from 10k to £1. concerned I phoned their accounts department to inquire why.. Turns out their credit underwriters ( is that the same a factoring?) had replied with " Not enough company info" and given us a zero rating !!! bearing in mind we've been in business for 10 years, never made a loss, or not paid a bill ( or even late) never bounced a cheque or anything I was still concerned
So I phone their credit underwriters to ask them... their response is that due to the current economic situation they want to see audited accounts of less than 6 months to give anyone a rating... now as our year end was only 12 days ago i haven't even bothered thinking about them yet !!! ( usually a panic in about 9 months time !!!
I wouldnt care but its only 30 day terms !!!!
slightly disgusted by the actions of a long term supplier, that they didn't take our history with them into account.... maybe I'll not be a customer for much longer...
As I've quoted a job using their kit I paid them on my debit card, but it may be the last time i use them
Not a surprise here. My father was spitting feathers when his company came back with a zero rating. The cause of this zero rating was the annual return hadnt been filed. The credit check being run a full 2 weeks before the annual return was due to be filed!Then to day I order about a grands worth of kit from a supplier I've put about 100k's worth of work through in the last 5 years..
mail came back saying they had dropped our credit limit from 10k to £1. concerned I phoned their accounts department to inquire why.. Turns out their credit underwriters ( is that the same a factoring?) had replied with " Not enough company info" and given us a zero rating !!! bearing in mind we've been in business for 10 years, never made a loss, or not paid a bill ( or even late) never bounced a cheque or anything I was still concerned
So I phone their credit underwriters to ask them... their response is that due to the current economic situation they want to see audited accounts of less than 6 months to give anyone a rating... now as our year end was only 12 days ago i haven't even bothered thinking about them yet !!! ( usually a panic in about 9 months time !!!
I wouldnt care but its only 30 day terms !!!!
slightly disgusted by the actions of a long term supplier, that they didn't take our history with them into account.... maybe I'll not be a customer for much longer...
As I've quoted a job using their kit I paid them on my debit card, but it may be the last time i use them
Eric Mc said:
Do they really mean "audited" accounts?
Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
The threshold changed a few years ago for audited accounts, used to be £1Mil, as far as I know now it's £4.5Mil (might be wrong).Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
We've never reached the level to require auditing, and if we did, it costs a fortune.
Eric Mc said:
Do they really mean "audited" accounts?
Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
Funnily enough we would have lost some work last year if we didnt have a full audit. Its pretty much a requirement if a company wants to tender for local/national government work. My company is well below the audit level in terms of turnover but we do tender for work so get an audit each year. We always ensure that the opinion is unqualified.Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
plasticpig said:
Eric Mc said:
Do they really mean "audited" accounts?
Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
Funnily enough we would have lost some work last year if we didnt have a full audit. Its pretty much a requirement if a company wants to tender for local/national government work. My company is well below the audit level in terms of turnover but we do tender for work so get an audit each year. We always ensure that the opinion is unqualified.Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
Believe ABTA/IATA insist on fully audited accounts for bonding purposes as well.
emicen said:
plasticpig said:
Eric Mc said:
Do they really mean "audited" accounts?
Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
Funnily enough we would have lost some work last year if we didnt have a full audit. Its pretty much a requirement if a company wants to tender for local/national government work. My company is well below the audit level in terms of turnover but we do tender for work so get an audit each year. We always ensure that the opinion is unqualified.Very few limited companies these days opt for "full audit" accounts.
No non-limited company trading accounts are ever audited.
Believe ABTA/IATA insist on fully audited accounts for bonding purposes as well.
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