CSA launches new learning website

The Credit Services Association (CSA) has launched a new standalone website to specifically promote its training and apprenticeship services. The CSA LEARNING website aims to educate visitors on how working with CSA can help you to “reduce churn, unlock capability and build capacity” through its training products and specialist apprenticeships standards.

In addition to being the industry trade body for the debt collection and purchase industry, the CSA is an award-winning learning & development specialist and an approved apprenticeship training provider, having recently received the highly sought-after Ofsted Good rating in 2022. It supports its member firms, and employers in wider sectors, to train, improve and assess their workforces in the specialist areas of credit, collections, compliance, counter-fraud, trading standards and debt advice.

Fiona Macaskill, Director of Learning and Development at the CSA commented on the recent launch, “The new website helps firms to see clearly the professionalism and expertise of the learning and development (L&D) side of the CSA. Our aim with CSA LEARNING has always been to ensure that professionals working in our industry and related sectors, have access to the best quality, up-to-the-minute training and development opportunities.”

Colleen Peel, Head of Marketing commented: “Launching a new CSA LEARNING website gives the L&D side of the organisation the space it deserves to promote its portfolio of services to helps firms develop their workforce.  This new website will be an important tool in our continuing work towards championing collections and debt purchase as a highly regarded profession that offers attractive and rewarding career opportunities for all.”

Colleen goes on to say: “Thank you to everyone who helped with the project, including so many of our learners who agreed to share their experiences with us including the benefits working with CSA has brought them both personally and across their organisations.”

Nine out of Ten Finance Leaders Yet to Move to Full AP Automation

Despite the continued drive of businesses towards new technology, the finance department has become stuck on its digital transformation journey, a new survey has suggested.

Less than one in ten (7%) of 200 UK finance leaders surveyed recently said they had completely eliminated manual processes by using accounts payable automation in the finance function.

And although more than two-thirds had eliminated the majority (37%) or around half (34%) of their manual processes, true automation is yet to be realised for many.

The survey from Yooz also showed that while 15% are using all-in-one automated  Purchase-to-Pay (P2P) systems, 13% are still reliant upon Excel spreadsheets and/or manual processing.

18% have achieved a degree of automation through the use of Electronic Document Management (EDM) systems, with 11% still opting to use ERP alongside automation.

The findings of this survey also confirm problems are still being caused by the continued reliance on manual processes: 53% of respondents said manual processes were too time-consuming (up from 43% in 2021), 37% said the business has made errors in the past (up from 26%), and 35% have paid suppliers/ vendors late at times (up from 29%).

“These findings suggest a lack of awareness or understanding of modern-day P2P solutions, which is, in turn, slowing down the automation journey of the finance function,” said Laurent Charpentier, CEO at Yooz. “Rather than opting for a single solution that can offer better end-to-end functionality, many are choosing to implement bit-part technologies that only automate certain processes.

“With full automation, time spent on robotic and repetitive tasks is almost eliminated while staff productivity and the accuracy of payments skyrockets. Plus, with real-time reporting and forecasting capabilities, the use of automation can play a key role in times of economic uncertainty, allowing businesses to better plan ahead and navigate towards financial safety. The finance team are the unsung heroes of business, and it’s critical that they receive digital tools that can help them realise new levels of efficiency,” concluded Charpentier.

Tough 2023 forecast as cash flow pressure drive surge in insolvencies

Headwinds likely to cause issues even for better-performing businesses in 2023. Directors advised to act now as economic climate drives increase in insolvencies. PKF GM launch training webinar series to support company directors understand the insolvency process.

Corporate Insolvencies surge

Insolvency figures released today for December 2022 by the Government’s Insolvency Service show that the number of registered company insolvencies in December 2022 was 1,964. This is 32% higher than in the same month in the previous year (1,489 in December 2021), and 76% higher than the number registered three years previously (pre-pandemic; 1,119 in December 2019).

In December 2022 there were 1,659 Creditors’ Voluntary Liquidations (CVLs), 22% higher than in December 2021 and more than twice as many as December 2019.

Oliver Collinge from PKF GM said: “The large rise in corporate insolvency numbers is not surprising compared to this time last year. But a material increase on pre-pandemic levels, as we are seeing now, is concerning. Unfortunately I think this is the start, not the peak, of rising insolvencies.”

It is also can also be challenging for firms to build prepare reliable forecasts at this stage, given the current economic uncertainties, and this can this in turn makes raising obtaining additional liquidity or capital more challenging. Speaking to an expert to discuss the options available is key.”

Tough 2023 ahead as cash flow pressure on businesses grows and even better-performing businesses won’t be immune

Oliver continued: “We’re seeing the current headwinds creating challenges even for some better-performing businesses, not only those that were already in survival mode. Businesses in the hospitality and retail sectors are particularly at risk. The cost-of-living crisis has led to the biggest fall in real pay on record and the price of energy remains high. Pressure on cash continues, and unfortunately, we expect to see heightened levels of business failures for some time to come.”

Training to support company directors as they’re urged to act now

PKF GM are running a series of webinars to guide company directors through the insolvency process, directors’ duties and how to avoid personal risk.

“For many directors, this is the first recession they’ve worked through. We’ve designed this training to help them to identify warning signs, understand when to call the experts in and lead their companies through what is undoubtedly going to be a tough 2023.

“We’re advising directors and their advisors to act now as the worsening macro-economic climate is likely to result in severe cash flow pressure. It’s critical businesses act early and seek advice if they are struggling now or think cash flow may be squeezed in the coming months. The earlier they act, the more options they’ll have to secure the business’s long-term survival.

“Having a restructuring professional guide you through the process can be invaluable in getting the best outcome and will also help you understand and mitigate your risk as a director.”

“For struggling businesses, it’s not too late to begin negotiations with landlords and creditors to develop manageable repayment plans. Will revenues be high enough to support your cost base? Will cash flows be sufficient to deal with the additional debt burden (both formal and informal) that has accrued during Covid? Perhaps a CVA is something which should be considered or, where you may need to take the difficult decision to make redundancies to survive, consider applying for government funding to meet the short-term cash impact of this.”

Of the 1,964 registered company insolvencies in December 2022:

There were 1,659 CVLs, which is 22% higher than in December 2021 and 111% (2.1 times) higher than in December 2019;

183 were compulsory liquidations, which is 259% (3.6 times) higher than December 2021 and 8% higher than December 2019;

10 were CVAs, which is 43% higher than December 2021 but 52% lower than December 2019;

There were 112 administrations, which is 56% higher than December 2021 but 20% lower than December 2019;

There were no receivership appointments.

Another Gold Mark of Distinction for Intrum

Intrum UK has once again secured Investor in Customers (IIC) Gold accreditation, reinforcing its commitment to deliver the highest standards of customer service.

It’s the ninth consecutive year that Intrum has held the highest mark of distinction since IIC was founded in 2006.

Each IIC assessment is based on four pillars of customer experience to assess how well the business understands its customers’ needs and delivers services to meet them.

Intrum achieved an overall score of 8.71 out of 10 and a customer NPS® score of +36, which is another excellent result for the UK business, especially during a period of exponential growth and rising inflation.

“We are delighted to again award Intrum with our Gold standard accreditation,” said James Edmonds, director of Investor in Customers. “The business serves as an example for others of how a true commitment to a strong set of customer-focussed values delights customers.

“The result is even more impressive for a debt management service provider given the challenging economic climate, from which customers may be less resilient.

“Our [2022] analysis shows that Intrum’s excellent customer culture is driven from the top, enabling staff to provide customers with a very impressive and emphatic level of service, where customers are treated with respect and as individuals. Customers are also praising of the company’s bespoke financial solutions to help them when they’re most in need,” he added.

Since Intrum’s previous assessment in 2020, 21% of its customers reported that the service had further improved. Customers regularly felt understood and that they could rely on Intrum to do the right thing to generate a fair outcome.

The helpfulness of Intrum staff, custom approach, coupled with a compassionate and empathetic style of interaction, were all commonly referenced in the 2022 survey.

In response to receiving the accolade, Eddie Nott, Intrum’s managing director for the UK and Ireland, said: “I am thrilled to be awarded with the Gold standard and to receive such positive customer feedback.

“The past year has been really difficult for customers. They’ve been financially and emotionally hamstrung by the post-Brexit storm and soaring inflation.

“Our principal purpose has always been to provide a fair and exceptional service. Investor in Customers provides an effective and independent measuring tool to help us maintain our high standards. It also enables us to take a deeper dive into what the customer journey looks and feels like.

“The award is testament to the hard work and dedication of our staff who do their utmost to help customers through a difficult financial period in their life,” added Nott.

R3 responds to December 2022 insolvency figures

Corporate insolvencies fell 3.25% in December 2022 to a total of 1,964 compared to November’s total of 2,029. They were 31.9% higher than in December 2021 (1,489) and 75.5% higher than December 2019 (1,119).

Personal insolvencies decreased by 20.4% to 8,339 in December 2022 compared to 10,473 in November. They were 1.3% lower than December 2021’s figure of 8,453, and 0.8% lower than December 2019 (8,406).

Christina Fitzgerald, President of R3, the insolvency and restructuring trade body, comments on the publication of the December 2022 corporate and individual insolvency statistics for England and Wales: “The monthly fall in corporate insolvencies is driven by a fall in Compulsory Liquidation and Administration numbers. However, corporate insolvencies have increased compared to last year and three years ago due to an increase in Creditor Voluntary Liquidation and Compulsory Liquidation numbers.

“This is due to a combination of directors choosing to close their businesses and creditors chasing unpaid debts due to changes in legislation as both ends of the supply chain remain squeezed by ongoing issues around consumer confidence, rising costs, and requests for increased wages.

“December and January are critical periods for many firms, and these issues, combined with strikes, bad weather and the economic challenges the UK has faced over the last three years may have dealt a further blow to businesses and business owners.

“These challenges aren’t going to go away overnight – and directors are very concerned about the effects of energy and staff costs, as well as fears about how the cost of living crisis will impact on their income this year.

“Turning to personal insolvencies, the monthly fall we’ve seen in the figures published today has been driven by a drop in numbers across all personal insolvency processes, with Individual Voluntary Arrangement numbers being the most dramatic and somewhat surprising given the economic headwinds that we are experiencing.

“Despite the fall in personal insolvency numbers, it’s been a bleak winter for consumers in England and Wales. Worries about the cost of living are still front of mind, with paying for food, energy and fuel the main areas of concern and with reports this week that price pressures are unlikely to ease anytime soon.

“Money worries are front of mind for a lot of people at the moment, and they are only spending on the basics – or on items that will help them cut costs elsewhere.

“We’re also seeing more and more people turn to borrowing to pay their bills, and while the reasons behind this course of action are understandable, debt on top of debt isn’t a sustainable solution.

“It’s likely we’re facing a precipice situation where the strains of rising living costs, wages failing to keep up with inflation and more people living in negative budgets suggests those who are struggling are running out of road and that personal insolvencies are likely to increase into 2023.

“We urge anyone who is anxious about their business or personal finances to seek advice as soon as possible. Talking about your concerns about money is very, very hard, but being brave and having that conversation as early as possible will give you more options, more time to make a decision and potentially a better outcome than if you’d waited till the situation became more severe.

“Most R3 members will offer a free consultation to potential clients to allow them to understand more about their position and outline the options for improving it.”

December company insolvencies finish 2022 remaining at historic high

The number of registered company insolvencies in December 2022 was 1,964 – a 32% increase on the previous year (1,489 in December 2021) and 76% higher than pre-pandemic levels (1,119 in December 2019) according to figures released today.

The data shows there were 183 compulsory liquidations in December 2022, more than three and a half times as many as in December 2021 and 8% higher than in December 2019. Numbers of compulsory liquidations have increased from historical lows seen during the coronavirus (COVID-19) pandemic, partly as a result of an increase in winding-up petitions by HMRC.

In December 2022 there were 1,659 Creditors’ Voluntary Liquidations (CVLs), 22% higher than in December 2021 and more than twice as many as December 2019. Numbers of administrations and Company Voluntary Arrangements (CVAs) remained lower than before the pandemic but were higher than in December 2021.

Commenting on the latest figures, Gareth Harris, partner at RSM UK Restructuring Advisory,said: ‘In December 2022 company insolvencies have remained very high in historic terms, continuing to be driven by shut down liquidations (CVLs) of smaller companies and HMRC compulsory liquidations.

‘However, this is, in reality, just the “excess insolvencies” that were suppressed during the pandemic and the times of unprecedented government support.  What we are yet to really see is an increase in those good, slightly larger companies who are now struggling due to the toxic combination of accumulated debt, high interest rates, inflation, labour shortages and supply chain issues.

‘Whilst these companies are struggling it will take a few months yet before they are reflected in the insolvency/administration figures, but sadly it now seems inevitable that many will have to go through that process to restructure.’

Dangerous debts on the rise: from higher earners to the most vulnerable

A third of people have poor or very poor debt resilience. Higher earners are more likely to score poorly for debt resilience than lower earners. 38% of those in the fourth quintile (who earn more than three fifths of the population) have poor or very poor resilience. However, some vulnerable groups also score poorly, including single parents and those who say they’re always running out of money before the end of the month.

Figures from the HL Savings & Resilience Barometer third wave, January 2023.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “Dangerous debts are on the rise. After more than a year of desperately trying to keep up with runaway prices, millions of us are running out of road. The HL Savings & Resilience Barometer reveals that debt is becoming a serious threat, and while higher earners tend to carry a bigger debt burden, lower earners are struggling too.

“Typically, the lion’s share of debt is owed by wealthier people, who tend to borrow more. They may feel more comfortable owing more money, because they’re confident their income will cover the cost. However, even those with plenty of wiggle room in their budgets shouldn’t be too keen to take out more credit, because the last few years has revealed just how easy it is to be caught out by the unexpected.

Lower earners face debt issues

“Overall, a third of people score poor or very poor for debt resilience, and while it peaks at 38% for those in the fourth quintile (who earn more than three fifths of the country), it’s still 32% among the second and third quintiles (who only make more than the bottom fifth of earners). This group are less likely to be borrowing because they feel on top of their ability to repay – and more likely to borrow because they don’t feel they have any other choice.

“Some vulnerable groups in particular have worryingly poor scores, with 37% of single parents suffering poor or very poor debt resilience, along with 47% of those who say they are always running out of money before the end of the month. And while debt feels like the answer to our problems in the short term, it creates huge issues of its own. The struggle to make ends meet becomes even harder when you have interest and debt repayments to worry about on top of everything else.

The lowest earners face debts of another kind

“Those on the lowest incomes, and people who have borrowed to the hilt, are likely to find it more difficult to get credit cards or loans. Bank of England statistics show that banks are increasingly wary about lending at the moment, because they’re concerned tougher times ahead will force more people to miss payments.

“ONS statistics show that a growing number have started missing bill payments instead. Almost one in ten people (8%) had a direct debit, bill or standing order they’d been unable to pay in the previous month, which rose to one in ten (10%) of those aged 16-29, and an alarming 13% of those aged 30-49.

What can you do?

“Unfortunately, missing bills is even more problematic, and the longer you struggle for, the worse it gets. It means that as soon as you see a problem, it’s worth getting help. If you’re struggling with debt payments, your first port of call is your lender. You don’t have to wait until you’ve missed payments: you can talk to them even when you see problems looming on the horizon.

“If you have missed bills, or you’re worried that you will, talk to your providers, explain the situation, and see whether you can work out a repayment schedule that you can afford. You should also be offered the chance to switch to a cheaper tariff – if there’s one available – to keep your costs down in future. If it’s an energy bill, check whether you qualify for any grants or help from your provider – who has a duty to help people who are really struggling.

“It’s also worth approaching charities, like Citizens Advice, who can help you access any help, including any benefits –  which could also open the door to more cost-of-living payments from the government. Debt charities, like StepChange, can help you deal with problem borrowing, and can talk to companies you owe money to in order to set up an affordable repayment plan.”

Birmingham youth charity benefits from £2.000 Sigma donation

A Midlands business outsourcing firm has donated £2,000 to a Birmingham charity which provides educational, financial and skills support to children and young people in a disadvantaged inner-city community.

Sigma Connected, which provides contact centre services for the utilities, retail, telecommunications and financial services sectors, has donated the funds through its Sigma Community Foundation to Nechells-based charity, free@last.

The four-figure sum will go towards the inner-city charity’s £100,000 drive to buy a piece of land in a nearby rural location where it can be used for young people and their families to take part in outside activities.

Sarah Birch, Business Development Director at Birmingham based Sigma, who nominated and also volunteers at the charity, said: “Free@last is a charity I have been closely involved with for nearly 10 years and have loved helping to organise events and raise funds to give the children opportunities to experience new things.

“The major aim is to purchase a piece of land near Birmingham to give the children, young people and their families a green and less polluted space for activities and celebrations. It really would be a gamechanger and we believe £100,000 would enable this dream to come true. The donation from Sigma is really significant as free@last works towards that total.”

John Street, founder of free@last added, “We are absolutely delighted that Sigma have recognised the value of our work with the children of Birmingham and are supporting our efforts to extend their life expectancy by buying our own countryside field to take our youngsters out of the polluted air they consistently breath.

“We started free@last 23 years ago to make a difference to children and young people from disadvantaged, inner-city backgrounds, and our longevity has only been possible because of amazing individuals like Sarah and businesses such as Sigma, who have chosen to become a part of our journey to improve kids’ lives. Together we do make a difference and together we are changing lives”.

free@last was set up in 1999 by John and his wife, Jan Street, to provide a safe place for children and young people of Nechells. From their centre on Nechells Park Road, the charity provides youth clubs, sports clubs including football, badminton and karate, stay and play groups, coffee mornings, and a range of sessions including life and digital skills, debt and benefit advice, along with careers advice.

Aside from the £2,000 donation, Sigma Connected also donated an additional £1,000 worth of Christmas presents to the charity which were shared amongst the children.

TOD Chooses TPAY for Mobile Payments

TOD, the fastest growing streaming platform for the Middle East and North Africa (MENA) has struck a strategic partnership with TPAY, the payments leader for the Middle East, Turkey, and Africa (META), allowing users to subscribe to its rich sports and entertainment content via their mobile numbers.

The partnership will cover up to 105 million consumers in Egypt as a start and will expand to more countries across MENA.

In the initial partnership phase, TPAY will enable TOD to accept subscription payments from consumers via DCB (Direct Carrier Billing), bringing its content within reach of consumers who don’t have access to traditional payment methods, such as credit and debit cards.

John-Paul McKerlie, Vice President of Sales and Marketing, at TOD, commented: “TPAY offers unrivalled coverage across META, has relevant local payment methods, and a track record of enabling merchants such as TOD to accept payments quickly and simply. This allows us to instantly deliver our premium content to millions across the region.”

Raj Soni, TPAY COO, added: “This partnership validates our status as the payment processing partner of choice for premium merchants especially in the streaming vertical. We are happy to have built payment rails that can remove all the complexity like cross border settlement, faster payment cycles, compliance, and risk management while our merchants remain focused on their core business and expansion.”

Post-Xmas debt hits £9bn in January

Two thirds (63%) of households resorted to credit cards, loans and overdrafts to cover Christmas costs in 2022.

A total post-Christmas balance of £9.8 billion has prompted concern around managing repayments, as rising levels of borrowing coincide with higher household expenses for necessities, from groceries to heating and electricity.

According to the smart money platform, Credit Karma, 20% of Brits were pushed into debt for the first time in the last year due to the cost of living crisis as the nation’s average credit balance hit just above £900, equating to 60% of the average monthly household income.

Over the past 12 months, 32% of Britons say they’ve had to change their lifestyle to become more affordable with roughly a third saying their earnings don’t go as far as they used to (30%). In their desperation to meet costs, consumers admit to dusting off dormant credit cards (4%) or increasing their credit balance (7%) to get by.

35-54 year olds and parents are among those with the largest outstanding balances,3 but the study also shows that one in three (58%) over 50s are now dependent on debt as rising prices continue to acutely affect all income levels.

This comes despite many cutting back, making lifestyle changes to reduce their spending levels to counter the cost of living crisis. One in four (26%) had a simpler Christmas this year, but ultimately still found themselves in debt come January.

One in 20 (4%) are now facing unaffordable repayments, while others are considering ways to make instalments on their borrowing, from paying off the minimum balance (19%) to taking on extra work (12%) and selling unwanted Christmas gifts (6%) to raise cash.

With energy prices rising again for many in January, the cost of living still going up across the board, and interest rates on credit cards at a 16 year high, consumers should remain vigilant for the best rates available to them as credit dependency continues.

Akansha Nath, Head of Partnerships at Credit Karma UK, commented: “Borrowing has become a reality for many households trying to keep up with rising prices over the past year. As our research shows, this has been unavoidable even for those who have made a concerted effort to cut back and reduce spending where possible.This can be understandably worrying and disheartening, as expenses look set to rise further in 2023.

“For those looking to borrow, or faced with large repayments, I’d advise keeping an eye for competitive rates, only spending what you can afford to pay off, and ensuring your credit score is as strong as it can be, which can ultimately reduce the interest you end up paying back.”