Consumers Repaying More Debt As Financial Divide Grows

Commenting on the latest Bank of England Money and Credit announcement, Will North, director of core credit for TransUnion in the UK, said: “In its latest Money and Credit statistics, the Bank of England has revealed that consumers repaid £2.4 billion of credit in January. This is the largest net repayment since May 2020 and a substantial increase on previous months, with consumers having repaid an average of £1 billion per month from September through to December 2020. Mortgage borrowing also remained strong at £5.2 billion in January, with 99,000 mortgage approvals for house purchases. The figures suggest the divide we’ve already seen emerging may well be growing, with the pandemic having impacted people financially in different ways.

“For those largely unaffected, their ability to repay more debt, thanks to lack of spending and consistent income, is strengthening their financial position. This is borne out by a recent report which stated that nearly a quarter (24%) of UK consumers have saved more money over the course of the pandemic so far. Similarly, our study tracking the impact of COVID-19 on consumer finances found that 61% of households finished 2020 either where they expected to be financially or better off.

“At the same time, those affected by loss of income are worse off and in many cases utilising government support schemes and payment holidays just to get by. We found that half of households were still reporting a negative financial impact at the end of 2020 and four in 10 (41%) UK consumers overall were concerned about their ability to pay their bills.

“Lenders will need deeper consumer insights and best-in-class customer management approaches in order to understand their customers’ financial situations and to be able to make informed, responsible lending decisions. With the Financial Conduct Authority (FCA) estimating that over a quarter of UK adults are demonstrating characteristics of vulnerability, lending is likely to be cautious.

“However, with the government publishing its roadmap for easing lockdown and the vaccine rollout continuing at pace, we can start to see the path to recovery, albeit an uncertain one. As we look forward with hope towards the summer, with the reopening of non-essential retail and the prospect of holidays – even if largely UK-based – we can start to think of the return to normal spending levels. In this new environment, finance providers need to be adapting their risk models and utilising the latest tools and data insights to take a dynamic approach to assessing their customers’ needs.”

Bristow & Sutor make PPE donations around the UK

One of the UK’s leading specialists in debt recovery, Bristow & Sutor, has continued to donate boxes of PPE to regional communities throughout the coronavirus pandemic. In total the business has donated 48 boxes to 27 different companies, with local authority beneficiaries including Plymouth City Council, York City Council and Peterborough City Council.

The decision was made to make PPE donations after Bristow & Sutor equipped their own staff last year and recognised the positive impact this equipment had on enabling important conversations to continue, even under lockdown restrictions. Every Bristow & Sutor enforcement agent, formerly known as bailiffs, now possess equipment such as masks, hand sanitisers, antibacterial wipes, disinfectant sprays and gloves as standard. All members of staff have been trained on the use of PPE and must pass an industry approved course before being allowed to conduct visits. They are not permitted to enter properties currently, so any resolution found is done so in a socially distanced manner from the doorstep.

Darren Stoneman, Civil Enforcement Manager, Plymouth City Council said, “As a parking service we are an integral part of the community and during the pandemic have reallocated our resources to support our community. The donated PPE from Bristow & Sutor was used by our Civil Enforcement officers whilst supporting the delivery of a safe new COVID-19 Vaccine centre in Plymouth, as well as staff who are volunteering in their own time as hub wardens, supporting the most vulnerable so they may access this vital service. We are truly grateful for the support and we send our thanks.”

Paul Sanderson, Revenues & Benefits Manager, City of York Council said, “I was delighted to receive this gesture as it will contribute to the safety of our local community.” Clair George, Peterborough City Council, said, “The Prevention and Enforcement Service would like to thank Bristow & Sutor for their kind donation. This PPE has been distributed to voluntary and community groups who are supporting residents across Peterborough during this pandemic.”

It is not just local authorities who have directly benefitted from these donations however, with multiple debt advice sector organisations, such as regional Citizens Advice Bureau offices, receiving boxes of PPE from Bristow & Sutor as well. Kelly Danks, Debt Service Manager, Citizens Advice Birmingham, said, “We were delighted to receive this donation as it will allow us to speak face to face with more local people about their circumstances. This is important for vulnerable members of the Birmingham community, especially when you consider more people may be facing vulnerable circumstances currently.”

Bristow & Sutor has a long history of supporting people in conjunction with both the debt advice sector and Local Authorities. The company trains its staff to spot signs of vulnerability and immediately refers people to specialist welfare and safeguarding teams when these needs are identified. The business also recently held virtual training sessions to staff from Coventry Citizens’ Advice & Coventry Independent Advice Service, sharing insight into some of the social responsibility and customer welfare initiatives the business currently engages in.

EAs are directly employed at Bristow & Sutor and are not paid based on the performance of one visit, their goal remains to help find the best solution and not focus purely on achieving immediate revenue. The company has developed and enhanced its services significantly in recent times, including the introduction of webchat for debtors, increasing outbound calls, implementing text reminders for cases in payment arrangements, implementing more payment methods and prioritising the most successful contact methods.

Emma Watson, Head of External Communications at Bristow & Sutor, says, “We understand better than anyone the importance of communicating with those in debt and the positive outcomes those conversations can lead to. As the coronavirus pandemic continues to impact communities in 2021, we wanted to do something to help. Recipients of our PPE boxes have all been very grateful and we are looking into the possibility of making even more donations in future.”

Bristow & Sutor has over 42 years’ experience in the collection of local council tax, non-domestic rates and unpaid Penalty Charge Notices. The company prides itself on delivering an ethical, compliant and high-quality service to the public and private sectors. The company also recently obtained NQA COVID Secure Verification accreditation, an independent review that provides assurance measures in place successfully mitigate the transmission of COVID-19 per government guidelines.

Bristow & Sutor share insight with Coventry debt advice providers

As part of its ongoing support to Coventry City Council, Bristow & Sutor, one of the UK’s leading players specialising in debt recovery, recently delivered virtual training sessions to staff from Coventry Citizens’ Advice & Coventry Independent Advice Service.

Bristow & Sutor has over 42 years’ experience in the collection of local council tax, non-domestic rates and unpaid Penalty Charge Notices. The company prides itself on delivering an ethical, compliant and high-quality service to the public and private sectors. The presentation provided to Coventry Citizens’ Advice & Coventry Independent Advice Service centred around the different stages of the enforcement process and aimed to ensure all attendees understood how Bristow & Sutor conduct their work, as well as sharing insight into some of the social responsibility and customer welfare initiatives the business currently engages in.

Information was also provided on the Bristow & Sutor Independent Advisory Panel, which is helping the business towards its ambition of being recognised as the most responsible, transparent and innovative provider of enforcement and debt collection services in the UK. It is hoped that providing channels of communication around these processes and conducting post-presentation Q&A sessions will help overcome misconceptions or preconceived ideas around enforcement firm attitudes towards supporting people who find themselves in debt.

The session was well attended and positively received, with 100% of those to complete a post-session questionnaire stating the event was informative and left them feeling more confident to speak to clients about the recovery process. Helen Addis, Social Responsibility and Customer Welfare Manager was one of the presenters on the day, she said, “Debt advice professionals must have a strong and accurate understanding of the enforcement process so that they can discuss options confidently when these conversations arise. Bristow & Sutor has made significant strides in social responsibility and customer welfare initiatives in recent times and it is in the best interest of debt advisors to understand what this involves, so they can best inform those they engage with. We were delighted at the level of interest displayed during our session in Coventry and the desire of many attendees to receive more information about our community work. Consequently, future sessions in other regions are set to be planned for the coming months.”

Bristow & Sutor has a long history of supporting people in conjunction with both the debt advice sector and Local Authorities. The company trains its Enforcement Agents (formerly known as bailiffs) to spot signs of vulnerability and immediately refers people to specialist welfare and safeguarding teams when these needs are identified. Bristow & Sutor employees are directly employed and are not paid based on the performance of one visit, their goal remains to help find the best solution and not focus purely on achieving immediate revenue.

All members of staff at Bristow & Sutor have been trained on the use of PPE and must pass an industry approved course before being allowed to conduct visits. They are not permitted to enter properties currently, so any resolution found is done so in a socially distanced manner from the doorstep. This year, the business obtained NQA COVID Secure Verification accreditation, an independent review that provides assurance measures in place successfully mitigate the transmission of COVID-19 per government guidelines. The business has also recently donated boxes of PPE to various Citizens Advice Bureau and local authority offices across the country, to help ensure important community work can continue safely at this difficult time.

Debt recovery professional completes 5,000 hours as NHS volunteer

Stefan Jordan from Nottingham is a Business Development Manager at Credit Style, one of the UK’s leading players in debt recovery. He has recently surpassed 5,000 hours of availability on the NHS GoodSAM app, time he has spent supporting over 50 individual people with ongoing needs throughout the coronavirus pandemic. Stefan is now calling on more people to follow his example and become local volunteer responders themselves.

Stefan became an NHS volunteer last year after being furloughed from his previous job. He intended to use his new-found availability to help vulnerable people get to and from hospital, gain access to their prescriptions and receive their shopping until he returned to work, or took up a new career opportunity. In August 2020, he joined Credit Style, who encouraged him to keep up the volunteering work he was now keen on continuing in his spare time.

“I was surprised by the level of flexibility that is possible when becoming an NHS volunteer responder”, said Stefan. “There is no commitment required and you only accept ‘jobs’ based on what works for you. It’s almost like Uber, with local requests coming through the app on my phone whenever I make myself available. Whilst I did not originally intend to keep going this long, seeing how appreciative so many people were made it feel wrong to even consider stopping. The experience has opened my eyes to how terrified some older people remain about COVID-19. I feel like even after the pandemic ends, this is something I will always want to do now, for as long as I can.”

Medication and prescription pick-ups have taken up the majority of Stefan’s time, followed by food shopping for people who cannot leave home, including one elderly couple he has provided weekly grocery deliveries to for over a year. Stefan has also made phone calls from home to lonely members of the community, something he says has had reverse benefits too. “Speaking to people who do not have anyone else to have a conversation with feels rewarding, because you know you have made a positive difference to that person’s day. I think that has positive effects for a volunteer’s mental health as well, as this has been a challenging time for everyone and talking about thoughts and feelings can only be a good thing.”

Stefan believes he is the prime example that anyone can get involved with volunteering if they have the desire to help others. “I have always worked in financial services and have been involved in fund recovery on behalf of companies for over 20 years. Debt recovery professionals do not often get commended for their background, but my experience has made me confident when communicating with people and taught me how to discuss individual circumstances and needs. It has also ensured I am up to speed with the latest coronavirus precautions and guidelines, which is important if you intend to safely attend a property to make a delivery to someone vulnerable.”

Stefan admits he is looking forward to the future but hopes some of the lessons learned during recent times will result in future positive outcomes. “I have been working from home since joining Credit Style and I am looking forward to eventually meeting my colleagues face to face! Relationship building is important and part of why NHS volunteering was so appealing to me. I implore anyone who has time on their hands to give being a responder a go and lend a hand to some of the people in the community that need support. Any help makes a difference and it could be the start of something positive that you will carry with you for the rest of your life.”

CSA ratifies appointment of two non-executive directors at AGM

The Credit Services Association, the trade association for the debt collection industry, has confirmed the appointment of two new non-executive directors to its Board: James Appleby from Arrow Global and Kathryn Morgan of Lowell Financial Ltd.

Both new directors have extensive experience in the financial services sector: James is currently Managing Director Northern Europe of Arrow Global Group and has held senior positions within Barclays Bank, Chetwood Bank, and Vanquis Bank; Kathryn has held similar senior executive roles with the NatWest Group and Virgin Money, and is presently Customer Operations Director for Lowell Financial Ltd.

Tom Chandos, CSA Chair of the Board, welcomes the new members and thanked the former CSA Board directors for their service: “In welcoming Kathryn and James as new non-executive directors to the CSA, I want to pay tribute to David Sheridan, Dr David Hutchinson and Stewart Hamilton for their time and service as they leave the Association Board. As the trade body for the collections and debt purchase sector we are fortunate to have such a breadth of representation to ensure that we can promote excellence in standards and culture across the industry, share best practice and make our voice heard across stakeholders and policy-makers.”

James Appleby is pleased to be joining the Board: “Having worked so closely with credit for so many years, I fully appreciate the crucial role it plays in society. Enabling responsible access to credit is essential, particularly as our economy emerges from this unprecedented period of economic disruption and consumer confidence returns.”

Kathryn Morgan echoed this sentiment: “I am delighted to have been elected to the Board, and I hope to use my extensive financial services’ experience to fully represent the interests of our members, clients and the customers we serve. The CSA has a crucial role in the debt services industry and I’d like to thank members for their vote of trust in me. I look forward to working with my fellow Board members to deliver on our commitments.”

35% increase in households pushed to the edge on debt

The number of households experiencing problem debt could rise to 1.5 million by the middle of the year, the highest level since the period following the global financial crisis and an increase of 370,000 – 480,000 since the start of the pandemic, according to research published today by Pro Bono Economics. Young people are likely to be especially affected, with 16-24 year olds potentially accounting for around half of those newly unable to pay their household bills and debts.

The report, produced by social sector specialists Pro Bono Economics for Citizens Advice, is published just as the Chancellor faces crunch decisions on the future of financial support at the Budget. The researchers are warning that the finance crisis for families in severe debt is likely to keep worsening for some time.

Much of the 33-43% rise in the number of households projected to be thrown into this serious financial difficulty stems from expectations about unemployment in the coming months. However, the modelling suggests that income drops for those still in work – associated with furlough, pay cuts1 and reduced hours2 – will account for roughly 140,000 of the total increase. This finding supports recent research by Citizens Advice suggesting that renters, young people, parents of children under 5, those on zero-hour contracts and those from BAME backgrounds all particularly likely to have at least one unpaid household bill as a result of the crisis.3

Tax credit overpayments, Council Tax arrears, benefit overpayments and water arrears are all leading sources of problem debt. However, liabilities from rent arrears was a rapidly growing problem prior to the pandemic and the latest research by the Resolution Foundation suggests that over 750,000 families were behind with their housing payments in January 2021, 300,000 of which contained dependent children.

As problem debt rises, so too does the cost to both the taxpayer and society associated with supporting those struggling to pay their rent and those suffering from stress and poor mental health: the Money and Mental Health Institute suggests that almost half of people in problem debt have mental ill health.4 Today’s report estimates that the additional pressures on an already strained NHS and housing system caused by the problem debt surge may be as high as £1.25 billion, an increase of £350 million since the start of the pandemic.

Charities are particularly concerned about the long-lasting impact of problem debt for young people. Younger age groups are more likely to have lost their jobs, to have been furloughed, to have seen their incomes reduce, and to have struggled to find new work.5 The research suggests nearly half of the growth in problem debt is set to be concentrated among 16-24 year olds, resulting in over 100,000 young people unable to pay their household bills and arrears.

Matt Whittaker, CEO of Pro Bono Economics, said: “We are hopefully approaching the beginning of the end of the health crisis associated with the coronavirus pandemic, but it is clear that the household finance crisis remains in its early stages. The spike in unemployment and squeeze on incomes that is expected to arrive over the coming months is set to push many households that are already close to the financial edge into an increasingly perilous position.

“The choices the Chancellor makes at the Budget on Wednesday will have an impact on millions of people’s lives and their risk of falling into problem debt. Extending furlough will certainly help, but the financial scarring this crisis has left behind is deep. While the furlough scheme has been a lifeline for jobs, many workers have still had to contend with sizeable pay cuts. For those already close to the edge ahead of the pandemic, such a sustained drop in income is inevitably leading to problems with bills and with debts which grow sharper with each passing day.

“This new research adds further weight to the case for extending the Universal Credit uplift in the coming Budget. Providing support for those individuals and families at the sharp end of the labour market shock associated with Covid is any case the right thing to do, but it also makes sense from an economic perspective because it will help reduce the taxpayer costs associated with dealing with the fallout from any surge in problem debt. With younger people especially exposed to such difficulties, the Chancellor should also view it as an important investment in the country’s future.”

 

Money Advice Trust responds to Individual Voluntary Arrangements termination rates data

The Money Advice Trust, the charity that runs National Debtline, has responded to the latest figures out today from the Insolvency Service that show a worrying increasing trend in termination rates for Individual Voluntary Arrangements (IVAs).

The charity has warned that action is needed by government and regulators to stop misleading adverts appearing online that they believe have helped drive the numbers of IVAs being taken out.

Jane Tully, Director of External Affairs at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “These figures, showing an increasing trend in IVA termination rates, are a concern as they suggest that many people in financial difficulty have been directed to IVAs when they may not be the right option for their situation. In many cases, other debt solutions may be more suitable.

“The prevalence of online adverts that promote ‘solutions’ to debt involving insolvency procedures may well be a contributing factor to this. The Government needs to step in and to give the FCA the power it needs to tackle this issue head on.

“Insolvency options should not be undertaken lightly and it is crucial that people receive free, impartial debt advice before deciding the best course of action to take.

“Findings from the recent Woolard Review highlighted the need for a more joined-up approach to the debt solution market. Increasing eligibility criteria for Debt Relief Orders is a welcome step but beyond this, we need a full review of all debt options in the wake of Covid-19.”

StepChange comments on new insolvency data and proposals

Today, the Insolvency Service has published its annual performance data for 2020 about Individual Voluntary Arrangements (IVAs). StepChange has long been concerned about the performance of the IVA market as a whole, given the discrepancy between the sales and failure rates of IVAs among different firms. This year’s data does nothing to alleviate the charity’s concerns.

StepChange is calling for a review of the personal insolvency landscape, to improve how it works for consumers and ensure that the regulation of this important but often neglected sector is fit for purpose.

IVAs are one of the three forms of insolvency-based debt solutions [see notes to editors] available in England and Wales alongside bankruptcy and Debt Relief Orders (DROs). The data published today is broken down on a named basis among the larger firms who arrange them (including StepChange Voluntary Arrangements, a subsidiary of StepChange Debt Charity). As usual, it shows a wide discrepancy in the number of IVAs arranged by different firms.

In terms of performance, there continues to be a higher failure rate of IVAs than StepChange thinks is healthy. While the one-year termination rate declined a little in 2020, reflecting forbearance arrangements introduced as part of the response to Covid, already more than a fifth of the IVAs that were taken out in 2018 have terminated. Given that the benefit of an IVA is only properly realised at the end of the five or six period for which it is held, the risk of early termination is one that needs to be avoided as far as possible.

Poor advertising and selling of IVAs in some parts of the market is the underlying driver for much online charity impersonation by lead generators (recently resulting in the upholding of complaints by the Advertising Standards Authority, and the FCA Woolard report calling out the problem). StepChange has also heard from an increasing number of people who have been aggressively called recently by telephone and pressured to take out an IVA, by callers falsely purporting to be StepChange.

The reason such poor practice happens is because the selling of IVAs can be commercially lucrative. While IVAs can absolutely be the best solution for the right people in the right circumstances, they can also be very expensive and harmful if missold to people for whom they are unsuitable. If they fail, they can potentially put people in a worse position than they started.

It is telling that, while StepChange has arranged fewer IVAs over the past year (because the pandemic has temporarily changed the debt landscape, and also reduced certainty about people’s future circumstances), overall the number of IVAs sold in 2020 was virtually unchanged from 2019, at over 78,000. Recent rulings from the Advertising Standards Authority, and the conclusions of the Financial Conduct Authority’s Woolard report, all point to the need for regulators to take more action to address current market failings.

StepChange Head of Insolvency Services Peter Wordsworth commented: “IVAs are absolutely right for some people, but not for all. We are highly doubtful whether everyone who is being sold an IVA should be getting one. Our own experience of having to deal with a large number of misleading advertisers pretending to be StepChange in order to generate leads for commercial IVA sales, underpins this view. It’s crucial, as we head out of the pandemic period, that people struggling with a Covid debt legacy aren’t inadvertently hoodwinked into taking out an IVA by unscrupulous sales practices.”

The charity has also just responded to the Insolvency Service’s consultation on changes to widen eligibility for Debt Relief Orders (DROs) [see note 2 to editors]. StepChange Debt Charity says that the proposals are welcome, and likely to result in an increase of more than a quarter in the number of DROs that the charity arranges.

If the Insolvency Service proceeds with these changes, many more people will have access to DROs. In particular, based on the charity’s modelling, around a third of people who currently pursue bankruptcy as an insolvency solution may be able to access DROs under the new proposals, meaning they would face far lower costs than at present. However, even the modest £90 fee to access a DRO, while far lower than the £680 fee for bankruptcy, is a struggle for many clients. Clients frequently have to save for this fee over a period of months before they are able to proceed.

StepChange Head of Policy, Research and Public Affairs Peter Tutton said: “We agree with the Insolvency Service that now is the right time to update the eligibility limits to ensure that, in the wake of Covid, more people with low income and low assets who can really benefit from DROs are able to access them, and make a fresh start after a year. It’s also time for policymakers to make sure that insolvency is safe harbour for those who need it by removing barriers to access and rooting out business practices that are currently causing harm.”

Simply Business Boosts Consultant Engagement and Coaching with Noble Gamification

Noble Systems, a global leader in omnichannel contact center technology solutions, is delighted that Simply Business, one of the UK’s largest business insurance providers, has chosen Noble Gamification to drive consultant engagement and ensure consistency of coaching and incentives across their different teams.

Simply Business was looking for a solution that would help improve and enhance its existing employee incentive programmes and encourage team members to ‘go the extra mile’. Their primary goals were to provide consistency across teams, make it easier to quantity results and reduce administrative management time. Noble Gamification allows users to more easily manage employee recognition and rewards for achievements and promotes ongoing professional development. The flexible environment supports integration with existing systems, so that Simply Business could easily ‘bolt on’ gamification to the contact centre platform already in place.

Simply Business’ journey with Noble Gamification began with putting 50% of their agents on the platform. That initial use quickly resulted in an increase in sales per hour, a key metric for Simply Business. Almost immediately, they saw a 6% uplift among their consultants that were using Noble Gamification.

Consultants can gain points for achieving goals that equate to monetary values in the company’s “Kudos” programme, which they can choose to spend on a variety of incentives or take part in raffles and auctions. Brendan Mckee, Operations Manager at Simply Business, said “So far we have been very impressed with the results of Noble Gamification and both consultants and managers love using it. The business is delighted with the uplift in sales per hour and the system has already paid for itself after just a few months!”

One of the key advantages of Noble Gamification for Simply Business is that they are able to maintain consistency across every team. They can quickly make changes on the fly, such as adding a user or changing a metric. Throughout the pilot campaign, they have seen positive results in driving engagement – particularly in the areas of coaching – enabling them to be consistent across the organisation and providing a central log of what training has been completed and by which team members.

“We’re pleased to welcome Simply Business on their gamification journey and are delighted that they’re already seeing such positive results”, said James Riley, VP of Sales & Marketing EMEA, APAC & India. “The business is embracing the new technology which is helping focus their teams on their Key Performance Indicators whilst empowering their consultants to keep track of their individual contributions via their personalised dashboards”.

Why the Prompt Payment Code could be Anti-SME

Changes to the Prompt Payment Code were recently announced by the government in an attempt to further protect small firms from poor payment practices. A reduction of the prescribed invoice payment terms from 60 days to 30 days is intended to tackle the current culture of late payment. CEO of Optimum Finance, Anthony Persse, suggests that in certain circumstances the new rules could actually have a negative effect on small businesses.

The reason that the Prompt Payment Code was initially designed was to combat late payment culture. The new rules announced in January do not do this. Shortening the payment window from 60 days to 30 days arguably makes the likelihood of achieving on time payments more difficult.

Small and medium businesses are the lifeblood of the UK economy. They’re nimble, brave, hard-working, enterprising and they drive much of our nation’s innovation. And this is without considering the fact that they contribute 50% to our GDP and 60% of our employment. Therefore, it is paramount that we deliver the right solutions for them.

The government realised this and their efforts to support and protect small and medium sized enterprises has delivered a huge impact, particularly during the current crisis. There is no doubt that the interventions have helped stave off inevitable insolvencies that could have happened to companies through no fault of their own. However, I do fear that the recent tightening of the Prompt Payment Code rules will be counterproductive in supporting SMEs.

Let’s consider the impact that reducing payment terms to SME suppliers has on a large business. If you have a large organisation with £500m of spend, of which 50% is with small businesses, reducing payment terms from 60 to 30 days could effectively require over £20m of cash to service. Yes £20 million. Imagine what any business large or small could do with £20m. Therefore, it could be a massive disincentive for big businesses to spend with SMEs and influence them to trade with other larger businesses, where longer payment terms are still an option.

These amends can also be seen as anti-competitive. Payment terms are often a competitive element of trading. If two businesses are selling exactly the same product at exactly the same price, but company A offers payment terms of 30 days and company B offers payment terms of 60 days, who is the customer going to choose? Without a doubt, it’s company B. These new rules remove this competitive edge for company B. Businesses should be able to negotiate terms that suit all parties and not have them dictated.

Of course, big businesses mustn’t take advantage of this freedom and issue unreasonable terms of payment. A grocer with high cash generation and quick turn-around on products should pay their suppliers quickly. When we buy apples from a supermarket, we pay for them on the day (likely the day that they arrive in store), not in 60 days or even 30 days.

And it’s not just me who thinks this. Evette Orams, Managing Director of commercial finance broker Hilton-Baird Financial Solutions, believes more emphasis should be placed on supporting suppliers’ cash flow: “The latest changes to the Prompt Payment Code are well-intentioned, but it would be more powerful to give suppliers the ability to comfortably extend credit terms where they’d like to, with the appropriate cash flow support mechanisms in place.

“Even the first 30 days can be significant in terms of the impact of selling on credit terms for any businesses. Therefore, the solution surely lies in promoting the benefits of invaluable tools that provide not only a cash flow boost, but continue to support the working capital of businesses, such as invoice finance.”

Let us be clear, late payments are absolutely unacceptable but there are other ways to get out of the late payment culture. At Optimum Finance, we want to see late payments as a thing of the past. In fact, we want to change the topic of conversation completely and talk about early payments instead.

Businesses deserve clarity, fair treatment and quick communication when it comes to payments. It is possible to have competitive, long payment terms AND get cash from invoices into your business account immediately. Solutions that allow fast access to funds tied up in unpaid invoices paired with bad debt protection already enable businesses to keep cash flowing and have a significant and positive impact on the UK economy. Talk to our experts to learn more about how invoice finance can work for you.

Anthony Persse is CEO of Optimum Finance, a specialist invoice finance company. Optimum utilises innovative market leading technology to unlock cash tied up in unpaid invoices. The experienced and dedicated team of experts are passionate about finding solutions and delivering to clients’ needs. They pride themselves on getting things done quickly and always delivering a facility that works for clients.

Evette Orams is Managing Director of Hilton-Baird Financial Solutions, which is part of the Hilton-Baird Group of companies. As an independent introducing agent, Hilton-Baird’s aim is to identify its clients’ funding requirements and introduce them to the relevant funding solution.

By Anthony Persse, CEO of Optimum Finance.