County Court Judgments on the increase,

The latest figures from the Registry Trust show a marked increase in the number of CCJ's being issued.



In England and Wales there was a 17.4 percent year on year increase in Q3 2008 to 223,519 - the highest level of CCJ's since Q1 2007. From Q2 2008, this increase represents a 24.8 percent rise.



Actual searches being made increased 14.1 percent year on year with over 8,900 unique searches being made, 71.5 percent of which were done online.

The chairman of the Registry Trust, Malcom Hurlston noted:

We expect a rising level of interest in CCJ information since – in current circumstances – who would be foolish enough to transact without checking the other party for CCJs.

With CCJ's being the most current and updated part of a credit report, it is worth adding all your clients to the free monitoring service as we will send you a free alert by email when there is a CCJ event on a company.

Note:
A CCJ is a judgment that a county court issues when someone has failed to pay money that they owe. CCJs are a simple way for creditors to claim the money they're entitled to.

County court judgments (CCJs) stay on the register for six years. The judgment will be removed if it’s paid within a month – if paid later, it can be marked as satisfied.

Why do some companies have no credit score?

Not all businesses will be scored or have limits. This depends on the information available.

Where a company has no risk score or credit limit, it can be due to one or more of following reasons:

• There is insufficient information on a business
• The business has more than 4 outstanding County Court Judgements (see below for a definition of this) in the last 6 months and less than 25 employees
• The value of CCJs is greater than £2,000 in the last 24 months
• There have been more than 3 CCJs in the last 12 months
• There are more than 10 CCJs in total

Where a company has no risk score or credit limit, it is likely to be due to the following reasons:

• There is not enough information to estimate financial strength
• The business is engaged in certain financial activities, making an estimate of financial strength inappropriate

In these cases particular care should be taken in making credit decisions.

Note:
For information County Court Judgement notifications are based on information received from the Registry Trust about County Court Judgements or Scottish Decrees brought against companies for non-payment.


The matching is done on name only and shows exact, probable and possible matches. A judgement must be paid within a month of being issued. If the judgement is paid off within the month it is removed and will not be shown in the report. If the judgement is paid after one month then the details remain on the system but will show the judgement as satisfied.


UK Data Ltd shows the total number of CCJs, the total amount owed and also a cumulative total over 3 month intervals. Details confirming the date, amount, court, case number and reference number are given for the latest 10 judgements.

Changes to VAT

We will be changing our VAT rate to 15% from 00:01 am on Monday 1st December.

All order receipts and web pages will reflect this change in our prices.

Impending Company Failure

I found this great post on Accountancy Web by Joan Yeadon where she highlighted her views on the key areas of financial stress to look out for - apart from our official credit score changes and monitor alerts - which may signify problems within a company.

• Cheque signatory never there
• Management changes/loss of key members of staff
• “Re-organisations” in the accounts department delaying payments
• Changes of bankers
• Delayed payments
• Simple non-payment
• Round sum “on account” payments
• Post-dated cheques
• Bouncing cheques
• County/High Court Judgements – especially from HMRC in respect of unpaid VAT or NI
• Winding Up Petitions
• Late filing of statutory accounts, annual returns, proposals to strike off, etc.
• Serious accident/disaster
• Business dependant on one or two key people
• Falling profit margins
• Dusty stock
• Shabby/run down offices/workshops/plant and equipment/vehicles
• Old technology
• Legislative restrictions on business

While there is the odd exception - 'Falling profit margin' would be hard to find out and accidents can happen to the best run company - keeping a look out for this kind of event is critical.

Remember that our monitor alerts are completely free and this includes notifying you of the filing of CCJ's (County Court Judgements) against a company.

Too late for credit checks?

We had an email this week from Andrew Share at Coface, Andrew suggested that we offer some guidance as to what you can do if it is too late for a credit check as your customer is not paying and you need to collect the outstanding debt. This is the advice that he gives on the importance of managing your debt:

In a deteriorating economic climate, collecting what you are owed is of paramount importance and is an essential way to alleviate the cash flow problems that a downturn brings. Now, more than ever, cash really is king – but many companies are struggling to release cash that is predominantly tied up in receivables. The key is to have an effective credit control function in place, which focuses on swift and efficient collections while maintaining a keen eye on debtors - and having an effective debt recovery process ready to implement.

Certainly, no matter how comprehensive the pre-approval process is, and how sure you are of the stability of the customer, there will always be failed collections and bad debt.

A robust infrastructure and system is a pre-requisite, but the whole process will benefit from the personal touch. Developing good relationships with your customers can make a big difference - making it easier to pick up on payment issues more promptly and keeping your business at the top of the customer’s payee list.

Of course this takes significant resource and even the largest company may struggle to dedicate sufficient time and energy. And in doing so may take the focus away from their core business just when they need it most. The key is to work with a partner which treats your customers just as you would – providing first class service and maintaining the personal touch while providing highly effective products. And doing this no matter what the economic climate is will stand companies in good financial stead for more challenging times – such as those we find ourselves in currently.

If you want to find out how Coface can help you collect what you are owed call 0870 458 2246.

Company Credit Reporting

Reading a company credit report and understanding the scoring is vital to determine your relationship with future clients or suppliers.

Our Knol post generated many questions around the scoring and how to make sure that the correct decsion is made once a credit score has been generated on a company.

We have a number of resources to help you.

1. This web page details the methods used to determine the Risk Scores, Credit Limits, Contract Limits and explains about Auditors Qualifications. Also see Company Filing Requirements to understand what financials are used to calculate scores.

2. To understand a company's credit status, it is important to understand the type of company and why and how it is incorporated. This web page covers everything related to Limited companies, from the types of company registered, to help spotting fraudulent companies.

3. Our help pages have a vast amount of free advice and information on company accounts and credit scores.

And don't forget that if you want help from a real person please email us at support[@]ukdata.com or call us on 01372 758000 and we will answer any questions, usually within the hour.

Annual Accounts .v. Annual Return

From our feedback survey we have noticed that some clients are buying Annual Returns expecting to see the financial information filed by the company they are investigating.

For clients from outside the UK or those unfamiliar with Company Accounts this can be confusing.

To explain the difference we have added some pages to our Help section:

Annual Accounts
http://www.ukdata.com/help/documents/annual-accounts.html

Annual Return
http://www.ukdata.com/help/documents/annual-return.html

For an overview of what is filed and why visit this page.

All limited and unlimited companies, whether or not they are trading, must keep accounting records. There are three variations on filing accounts and these impact on the amount of information available in a credit report. A full breakdown of these filing requirements is available here.