- "In the last 20 years our business has changed considerably…and as the focus of our business has changed, Bird Luckin have moved with us."
Alex Tanner, George Tanner (Shalford) Ltd
- "Bird Luckin has looked after us incredibly well for over 60 years, they are pro-active and innovational - meeting all our needs to help us achieve our aims."
Richard Stubbings, Cliffords Limited
- "I can honestly say that Bird Luckin are the best firm of accountants and auditors I have ever dealt with - and I don't say that lightly!"
Colin Webb, Walthamstow Stadium
- "It's important for us to know that we will always be able to contact the right people to give us the right advice and support."
Jane Bennett, Bennetts Funeral Directors
- "Although we deal mainly with one Partner … we also know that if we need to contact someone else who is a specialist in another area, we can get the advice we need quickly and easily"
Jeremy Ruggles, J.S. Wright & Sons Ltd
- "Bird Luckin got us to a stage which would have taken us months - if not years - to reach on our own, and they got us there in a matter of weeks"
Matthew Sullivan, SNC Ltd
- "You can be a good accountant, but if you don't have an understanding of the industry it can be very difficult. "There are two or three people we have regular contact with at Bird Luckin who know our business well, and it makes a difference.""
Robert Church, W A Church (Bures) Ltd
- "The work which Bird Luckin has done for Boddingtons over the past few months has helped shape our future direction for the better."
John Warner, Chief Executive, Boddingtons Ltd
- "Bird Luckin has acted for us since our inception 10 years ago. They have a very 'can do' yet highly professional attitude - we are very appreciative of their support and advice over the years."
Marlon Fox, Outlook Property Ltd
How to protect your business when your customers go under
What would you do if one of your major customers went under, owing you a substantial sum? Would you be able to recover the outstanding debt - or reclaim goods they had not paid for?
Unfortunately, experience suggests that if you are an unsecured creditor you would be lucky to recover a few pence in the pound - and in most cases you would receive nothing at all.
Your best course of action is to take precautions now to limit your exposure and minimise the impact on your business of any customer insolvency.
There are certain basic precautions every business should take. Though these are largely common sense, we are constantly surprised by how often they are overlooked:
- Maintain an honest and open relationship with your customers and encourage them to share information with you
- Establish clear credit control procedures, make sure your customers understand them, and be seen to implement them firmly and consistently
- Check credit references before offering credit terms
- Do not extend credit limits without good reason
- Monitor customer accounts regularly
One of the first signs of difficulty is that a customer's payment period begins to lengthen. If this happens, you need to act swiftly. You might, for example, arrange a visit to them to discuss the matter. Ask if you can see their accounts and projections. If you are still concerned, you might suggest that they take smaller deliveries more frequently until the situation improves.
Another way to limit your exposure is to speed up the payment cycle. You might, for example, consider:
- Restricting terms, say to 20 or even 15 days, and extending to 30 days only where there is a basis for confidence
- Specifying terms as 'payment received' rather than 'payment sent'
- Including a reminder of your terms on your invoice
- Sending out a letter before the invoice is due asking for confirmation that the order was received - this pre-empts the 'I mislaid/don't remember receiving your invoice' excuse
Other possible precautions include:
- Include Retention of Title clauses in your contracts to increase your chances of repossessing any unused stocks of your products held by an insolvent customer
- Where possible, obtain guarantees from directors or other group companies
- Where substantial sums are involved, consider taking out insurance against a customer's failure to pay
If a customer does get in difficulty it is not always advisable to instigate proceedings too quickly lest you precipitate action by larger creditors who have a prior claim.
In general, you have much more chance of recovering monies owed if a rescue plan is put into place rather than the company going into liquidation.
We can help
As you can see, this is a complex area and professional advice is essential if you are to avoid taking unnecessary risks.
We can advise you on:
- Establishing effective credit control procedures
- Minimising the impact of customer insolvency
- Dealing with insolvent customers
Call us today if you would like to discuss this matter further.