What do these figures show ?

These figures could show that the economic pressures on UK businesses are beginning to ease and that more “Normal” trading conditions will begin to return. With such a drastic fall this could mean that access to funding and investment is now returning to a more stable point in the market.

Do these figures show a true representation of the insolvency market ?

These statistics are showing an untrue picture of the current marketplace due to other forms of business turnaround. Insolvency Practitioners and Turnaround Specialists are now able to look at company voluntary arrangements and financial restructuring, instead of liquidation. This could show a lift in the market but does not confirm growth.

Construction, Manufacturing and Retail still remain the worst affected sectors. These sectors still act as a good financial barometer for growth. Overall we can see a decrease in the insolvency market, however it is too early to tell if this is growth or a change in conditions.

By Gareth Fawke

2009 saw credit insurers pay an estimated total of £320m in claims; the second full year after the start of the recession. This figure represents a 95% increase on 2008 figures that stood at £164m. The sudden increase is due to the liquidity crisis and recession that is affecting global businesses.

The above figures have lead to credit insurers having to review clients’ premiums and for the first time restrict or in certain cases revoke insurance altogether. A number of the UK’s top credit insurers have admitted that their premiums before the recession did not reflect the risk of non payment. Industries that have previously been insured as ‘risky’ are no longer able to gain cover, while markets that have been affected by the recession have been labelled ‘risky’. This has left UK businesses facing no cover, reduced cover or highly inflated premiums.

How can Largo help clients with reduced or no credit insurance?

Internal credit control is key to limiting risk; improving existing processes and implementing new procedures instead of relying on credit insurance. The first place to tighten the belt is with credit limits. Using a good quality credit referencing system like Largo Web Check can prove to be a key decision making tool (remember these are only a guide). A combined look at Web Check’s recommended limit, company’s accounts and recent activity; should prove invaluable when making this decision.

What happens when an account turns into bad debt?

Once an account becomes overdue and falls into the category of bad debt businesses must have a clear procedure in place. At this stage Largo’s debt recovery services becomes key to successful recovery. The earlier the account is passed out for recovery the, higher the chance of success. Largo’s recovery services means that UK businesses can still afford to operate in markets where businesses no longer can receive credit insurance.

Article by Gareth Fawke, 02/06/10

Recent research by Bacs Payment Schemes Limited shows that on average UK companies have to wait a further 41 days on top of their agreed payment terms to receive payment. SME’s rely on cash flow for the day to day running of their business, and the continued increase of late payment is reported to be affecting 961,000 businesses.

Large companies have been sighted as the worst culprits of late payment with 37% of respondents complaining about late payment. This falls to 17% of respondents complaining about sole traders habits and a further 6% complaining about governmental and non for profit organisations. This has prompted the government to change its payment habits in the 2010 budget; all payments will be made in 5 days rather than the usual 30 days, in an attempt to help increase cash flow. However negative views show that only a small percentage of UK SME’s supply this sector.

Increased late payment has lead to enormous amounts of outstanding invoices since the beginning of the recession. It is reported that the average total of outstanding debt has risen by £6.2 billion. Sectors that have been affected the most are manufacturing, distribution and leisure.

Taking all of the above into account, small businesses need to change their collection strategies. Late payment and cash flow issues can be enough to fold a business. How can Largo help? Debt collection has proven to be successful in returning clients to payment terms and increasing cash flow. Not only is it an economical method of collection, Largo even makes sure that we manage your client’s relationship so future business is not affected. Largo’s Managing Director Tom Flannery said “We have seen our corporate client base grow year on year and success rates have proven that outsourcing debt collection need not be a costly exercise”.

For more information or help with collections please contact;

Gareth Fawke on 07500 858586 or Tom Flannery on 07816 905404.

(Article by Gareth Fawke; references from The Financial Advice Bureau & Bacs Payment Schemes Limited)

There is no doubt moving away from traditional payment methods like the cheque will impact on nearly all businesses alike. Affected the most will be small businesses, sole traders and in the consumer market older people. Help the aged said “more traditional paper based methods should still be available to people who feel comfortable with them”. The cheque is the most expensive method of banking to businesses with a cost of £0.46 as compared with a BACS transfer which is around £0.29. Most UK supermarkets and retail chains have ceased accepting the cheque due to cost and security.

The affect on debt collection agencies, credit managers and small business owners?

On reflection cheques can be used as a stalling tactic for payment, with our personal favourite “the cheque’s in the post”. This then leads on to further problems when receiving the mysterious cheque; it will then bounce! Electronic payments should speed up payments, eradicate excuses and increase cash flow.

Already in place is electronic bank transfers, that should see a steady increase as cheques are phased out, however what will replace the cheque in a more social banking scenario? Banks and credit providers have been spending time and money investing in contactless technology. This will allow users to make payment by pushing a chip against a sensor. Other methods that are tipped to grow in the payment culture are mobile phones and pre paid top up cards.

In conclusion we see this as a step into the 21st century of modern day banking, as it will encourage banks and credit providers to develop new, easier banking methods. The down sides as with any change is the cost to society, both in monetary terms and a transition period of social usage.

By Gareth Fawke

With hundreds of companies failing or struggling with debt, business must be booming for debt collectors? “Last year was certainly a busy period. We all witnessed well-known brands and others falling foul of the credit crunch. Nobody enjoys hard times but an effective insolvency regime is a prerequisite for a sound economy. In the UK alone over 21,000 businesses fail every year but a high level of new companies also rise from the ashes. There has always been a high demand for debt collectors both in a strong economic cycle and a weak one”.

Collecting debt is not easy. How do you protect your clients from reputational damage to their brand? “Most importantly we agree a debt collection strategy with the client if we think there might be any serious risk. We approach debt recovery by using a blend of letters and telephone campaigns based on negotiation over the phone. We are compliant with all guidelines and regulations set by the Office of Fair Trading (OFT) and also operate under the best practice guide set out by the Credit Services Association (CSA). Our brand is very important to us and we would never risk a client’s reputation by making unregulated threats.”

Pound for pound, what kind of collection rate do you get back for your clients? “We have an intranet system called Review Web Collect, which clients can log into and see how much has been collected. But unlike the telephone-based volume call approach of consumer debt collecting, unravelling complex commercial debt cases is a more intricate process and can sometimes take years. This makes it hard to offer exact figures and those figures also vary from client to client.”

When is it better to approach a debtor in person and when is legal action more effective? “The initial skill is separating out the ‘can’t pay’, from the ‘won’t pay’. While our first duty is always to our client, we often try to adopt a facilitative approach when dealing with debtors. If a debtor or company is in severe financial difficulty then we try to find a solution that works for everyone. Litigation is always a tool of last resort.”

What percentage of your clients wants to threaten legal action first and ask questions later? “I wouldn’t recommend this strategy to any client. We nearly always work on a contingency or pay-per result basis and charge a percentage of the funds we recover. This way the client sees good value for money in a much shorter timescale. We send a letter before action giving seven days to make payment. This gives the debtor plenty of notice prior to the instigation of legal proceedings. We would expect debtors with genuine disputes to explain what their reasons are for non-payment. Then, if the clients want to, he or she can pursue litigation.”

If UK firms need a debt collection service, what key questions do they need to ask candidates for a professional result? “I think there are a few important things to look out for. Firstly, does the company hold a current and valid OFT license? Is the company a member of the CSA? Can the firm offer you case studies and client testimonials? What measures does the firm have in place to ensure compliance with the Data Protection Act? If it’s necessary to instruct a third party agent, what measures do they have in place to ensure they are compliant and do not use unorthodox methods? How often does the staff get training or refresher courses on legislation? Lastly, does the cost proposed give you value for money?”

The Sunday Times March 28th 2010.  Article by Victoria Hartley.

The British Heart Foundation raise money to continue extensive research into heart related diseases that can cause premature death in adults and children alike. The British Heart Foundation also understands how hard it is to live with such a condition and continue to provide vital support for heart disease patients.

Largo are proud to raise a total of £200.00 to donate to such a worthy cause.

Rachael Withers Director of Operations said “I would like to thank all staff members that took part for being so generous”.

Largo Law unveils “dashing” new website in their first phase of new innovative marketing plans. Sean Barton, Managing Partner said “The new website brings Largo Law’s presence into the 21st century. Our new website will not only be a source of information on our services but a hub of knowledge for our clients.

Pages of particular interest include the Web Collect and news section. Largo Law pioneers Web Collect to allow our clients to instruct and review cases online (www.largo-law.co.uk/web-collect). The new web based solution gives clients transparency on their account and puts them firmly in the driving seat of their recoveries.

Up to date news is an invaluable tool to any professional and Largo Law have recognised this with their news page. This will keep you up to date with new legislation on debt related matters. It’s a must see!

Largo Law stands separately to Legal & Receivables and is regulated by the SRA, however we do share the same values and ethics towards client services.

For more information on Largo Law’s Services and web based products please call Sean Barton on 01924 886555 or email sbarton@largo-law.co.uk

Largo held their first charity ball on November 27th at the Met hotel in Leeds. The evening was attended by 100 people from different business nationwide. The event was a great success, with a packed evening of entertainment which was enjoyed by all who attended. The focus of the evening was to raise much needed cash for Wakefield Hospice and Barnsley Sea Cadets. The help and support from our sponsors and people who attended the evening lead to us raising a total of £5000.00.

The money raised for Wakefield Hospice will go towards helping with their running costs of £2.9 million per year. Barnsley Sea Cadets, who are totally self funded, will use the money for repairs to their building and running costs. With out this vital cash they were facing the possibility of closure.

All the team at Largo would like to express our grateful thanks and appreciation to all who have supported the evening and help make it a success. The generosity of our supporters including sponsors, prize donors, literature and design providers, allowing us to keep our costs to an absolute minimum. Once again a big thank you to all who supported the event, from Largo and on behalf of Wakefield Hospice and Barnsley Sea Cadets.

Pictures: 

Top:

Rachael Withers presenting Barnsley Sea Cadets.

Bottom Left:

Gareth Fawke Presenting Helen Knowles from Wakefield Hospice

Largo saw off some of the industries finest to scoop the top prize.   Rachael Withers, Director of Operations was delighted to receive the award and commented “The award cements the hard work the company has put into its clients and proves our success throughout 2009”.

Tom Flannery,  Managing Director commented “We are delighted to receive this award which firmly puts us in the Premier League of UK collection agencies”.

The Debt Collection Awards, hosted by Credit Today took place at the Chesford Grange Warwick, on Thursday 19th November 2009. For a list of the winners please click here.

Photo back row, left to right – Tom Flannery - Managing Director, Sean Barton – Managing Partner Largo Law, Gareth Fawke – Head of Sales & Development, Brian Gibson – Legal Manager Largo Law.

Front row, left to right – Nathan McQueen – Head of Collections, Rachael Withers – Director of Operations, Steve Hartley

Published : Wakefield Express 13 November 2009

DEBT collectors will turn into charity fundraisers for Wakefield Hospice.

Largo, a debt recovery company, is based at Silkwood Park, will host its first charity ball on Friday, November 27.

The event will raise funds for Wakefield Hospice and Barnsley Sea Cadets. Helen Knowles, director of fundraising at Wakefield Hospice, said: “We are so pleased that Largo has chosen to support Wakefield Hospice. This is a great bonus for us as sadly we had to cancel our own gala night this year because of the current economic climate and lack of corporate sponsorship and we feel privileged that Largo has offered their support, especially when times are challenging.”

Largo has recently been shortlisted in the Credit Today 2009 Debt Collection Awards for Commercial Debt Collection Agency of 2009 and is delighted to be contributing in some small way to both charities for the excellent work they do.

Rachael Withers, operations director at Largo, said: “This is the first time we’ve done something like this, and as a growing business we have always tried to be charitable. Wakefield Hospice is close to our hearts and we’re happy to be able to give something back.”

A limited number of tickets are priced at £55 each. For more details contact Largo on 01924 886555.