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Debt Collection News Roundup –November 2016

Here at Access Credit Management we ‘re committed to making sure  our readers are up to speed with what’s going on in the industry so once a month we publish a News Roundup.  This brings our readers all the latest news and important goings on within the sector so that you have a resource that keeps you fully informed at all times.  It would be interesting to know what you, the readers, think of the stories that feature here.  Please join in by adding your comments below the regular news roundup postings or email us if you come across anything that you think we should include.

In the wake of the Autumn Statement last week by the new Chancellor of the Exchequer, Phillip Hammond, it seems that there’s a severe income squeeze on the way which will affect all of us here in the UK.  Earnings are forecast to grow by just 1.6% over this decade, compared with 12.7% in the 2000s and more than 20% in every other decade since the 1920s.  The combination of lower growth, increased inflation and the government’s decision to go ahead with stringent welfare cuts means that households are likely to experience much slower income growth during the term of this parliament.  This could lead to even more small businesses experiencing cash flow problems, falling into debt and going out of business.

The Guardian, meanwhile, has been reporting on some entrepreneurs who refused to let cash flow problems put them out of business!  Instead, they’ve used their imagination and determination to find other methods of bringing in cash to pay the bills.   One underemployed actor has found a novel way of earning a few bob – walking people!  Chuck McCarthy charges $7 per mile to walk around Los Angeles with people – he’s even launched an app, a company t-shirt and mug and is currently planning to franchise the business.  On this side of the Pond, professional actor/dancer/singer, Vanessa Heywood runs music groups and shows for Under 5s.  In a bid to experience a more continuous cash flow, Charlotte Sweeney operates a diversity and inclusion consultancy while experience finance director, Johnny Martin delivers Get Cash Flow Confident workshops.  People in business nowadays need to be flexible to stay in business and turn a cash flow crisis into an opportunity (more advice on that to come soon).

According to UK publication, SME Insider, cash flow is still one of the biggest killers of SMEs with figures divulging that almost half will fail in their first five years.  Late payment has become a vital issue here in the UK, despite the government’s initiative to speed up payments with the Prompt Payment Code. 

The Autumn Statement also saw some changes which will affect businesses with a very low cost base who are now dubbed “limited cost traders”.  Limited cost traders (defined as one that spends less than 2% of its sales on good, not services, in an accounting period) can still use the VAT Flat Rate Scheme but their percentage will now be 16.5%