Is your business overlooking overdue retention payments? Cashflow is the lifeline of any business—big or small.

Take a look at our latest video in which Non-Executive Director Philip King FCICM chats with Laura Humphries, Head of Customer Development, about how cashflow should be the number one priority for businesses and how retention can help with this.

At Top Service, we’ve helped members recover substantial retention payments, turning lost money into vital cashflow.

💬 As Philip says:
“Turnover is vanity, profit is sanity, but cash is reality.”

To learn more about how we can help you minimise risk and maximise cash flow, call in to speak with one of our experts today on  01527 518800.

Top Service CEO, Emma Reilly FCICM says:

“The new fair payment code introduced by the small business commissioner is a welcome initiative for the UK construction industry, potentially addressing the persistent issue of late payments to suppliers. However, its effectiveness may be limited without statutory backing.

In the construction sector, where large contractors often dictate payment terms, a legally binding requirement could significantly improve payment practices. The success of this initiative will largely depend on:

💡 Widespread awareness of the initiative.

💡 Integration into risk assessments by businesses who are able and

government departments when evaluating tenders

While the code is a step in the right direction, making it a legal obligation could truly transform payment culture in the UK construction industry, benefiting smaller subcontractors and suppliers who frequently bear the brunt of late payments.”

Emma continued “It has been my pleasure this morning to register Top Service’s interest in applying for the Gold Award”.

You can read more about the New Fair Payment Code here: https://www.smallbusinesscommissioner.gov.uk/new-fair-payment-code/

Emma Reilly, FCICM, CEO of Top Service Ltd and a renowned credit expert, shares insights on the success of recent webinars and invites your suggestions for future topics. She also highlights the importance of staying informed about customer performance, especially in light of the recent ISG collapse, and how Top Service can support you in managing these risks.

In October 2024, company insolvencies dropped by 10% compared to September 2024, and were 24% lower than October 2023. However, insolvencies remain significantly higher than pre-pandemic levels, reflecting ongoing economic challenges.

October 2024 Breakdown:

Total Insolvencies: 1,747 (compared to 1,950 in September 2024)

🔻 Creditors’ Voluntary Liquidations (CVLs):
1445 cases, down 7% from last month, 83% of all insolvencies.

 CVLs remain the dominant form of insolvency, reflecting ongoing financial challenges for businesses unable to restructure or secure financing.

📉 Compulsory Liquidations:
188 cases, reflecting a 14% drop from September

🚀 Administrations:
100 cases, Administrations saw the sharpest decline with numbers falling by 35% from September and 28% from October 2023.

🔽 Company Voluntary Arrangements (CVAs):
12 cases, down 29% from September

Insolvency Rates & Long-Term Trends:

12-month insolvency rate: 53.8 per 10,000 companies, down from 56.5 last year.

This translates to 1 in 186 companies entering insolvency over the past year

Although rates have risen since pandemic lows, they remain well below the 2008-09 recession peak of 113.1 per 10,000.

Construction Sector Impact:

The construction industry remains the most affected, with 4,264 insolvencies in the 12 months leading to September 2024, accounting for 17% of all cases.

This reinforces the vulnerability of construction businesses to cash flow issues, material price volatility, and market uncertainty.

📈 While insolvency numbers show month-to-month improvement, the construction sector must remain vigilant against broader economic pressures. Planning and resilience are key.

⚠️ Staying Ahead of Early Warning Signs ⚠️

We encourage all credit management teams across industry to stay vigilant and monitor early warning signs of financial distress. Having the right tools and insights can help minimise debt and maximise cash flow.

📞 Get in Touch
To learn how we can help your business, call us today to speak with one of our experts on 01527 503990. Let’s work together to navigate these uncertain times.

If your address has been used as a company’s registered office without your consent, there are clear steps in place to address this issue, thanks to the Companies (Address of Registered Office) Regulations 2016, effective since 6 April 2016.

This default address is used in cases where an address may have been listed without proper consent. Prior to these regulatory changes, individuals whose addresses were used without permission had little recourse for removing them from company filings, which often resulted in receiving unsolicited mail, visits from debt collectors, and even potential credit issues.

Rules to Prevent Unauthorised Address Use:

• Who Can Apply: Anyone can now request that Companies House change a company’s registered address if it’s being used without authorisation.
• Registrar’s Process: The Registrar will notify the company of the application and allow at least 28 days for the company to respond, prove authorisation, or update the address.
• Default Address: If no response or proof is provided, the Registrar will change the registered office to Companies House’s default address:
  PO Box 4385, Cardiff, CF14 8LH

How This Helps You: This procedure provides a quicker, simpler remedy to prevent unauthorised use of private addresses. Importantly, mail sent to the default address will not be opened by Companies House and will be destroyed after 12 months if unclaimed.

For further details on these regulatory changes, see The Gazette’s article on this update here.

Understanding Trading Experiences in Construction Credit.

In the world of construction, making informed credit decisions is crucial. Businesses need to rely on timely and accurate information to safeguard themselves against financial risks. Top Service’s trading experiences play a pivotal role in this process, providing companies with the detailed insights necessary to evaluate potential credit extensions.

Our industry specific trading experiences provide a real time and up to date picture of how a subject company is paying its other suppliers right now.

Sometimes, insolvency proceedings can seem to come out of the blue, when referring to more generic credit information. Whilst it’s correct that there are not always a string of CCJ’s, poor accounting figures, or a mass exit of Directors there are always trade creditors.

The Importance of Shared Information Credit Risk Management

What are the benefits of sharing payment data & trading experiences:

1. Improved risk assessment: allows businesses to better evaluate the creditworthiness of potential customers, helping them make more informed decisions about extending credit or setting credit limits.

2. Enhanced due diligence: more thorough background checks on potential customers, reducing the risk of fraud or non-payment.

3. Better cash flow management: By understanding the payment patterns of potential customers, businesses can more accurately forecast cash flow and plan accordingly.

4. Early warning system: Shared data can help identify potential payment issues or deteriorating financial health of customers before they become serious problems.

5. Reduced bad debt: By making more informed credit decisions, businesses can potentially reduce instances of bad debt and associated losses.

6. Improved efficiency: Shared payment data can streamline credit approval processes, saving time and resources in customer onboarding.

Examples of Trading Experiences Preventing Financial Losses

The real-world impact of sharing trading experiences in numerous cases where businesses have avoided significant financial losses. Consider this example:

Top Service received a call from a worried member about a suspicious credit application they received, we discovered that someone might be impersonating John Sisk & Son Limited. Thanks to our Credit Management Expert Sally’s thorough investigation, we quickly informed our members, prompting an immediate and effective response.

Following the sharing of this information, we received a heartfelt thank-you from another one of our members, who was approached for a suspicious £80k application. With our information, she confirmed it was a fraudulent application and avoided a major loss!

This incident highlights the critical role of sharing trading experiences in identifying and preventing scams. It showcases the effectiveness of having a community of informed members who can quickly verify and alert others to potential threats. Such examples underscore the importance of staying connected and informed within the industry, proving that these trading experiences are not just a luxury but a necessity for protecting business interests.

In conclusion, the role of trading experiences in the construction industry is more critical than ever. As businesses strive to navigate the complexities of credit risk management, having access to timely and accurate information is essential.

Emma Reilly, FCICM, CEO of Top Service Ltd and a renowned credit expert, expresses her delight in announcing that Top Service has successfully recovered over £100 million for its members. This achievement highlights the effectiveness of the comprehensive range of debt recovery services the company provides.

Over the past two decades, Rachel has not only witnessed significant growth within the company but has also experienced personal and professional development. In her reflection, Rachel shares insights into her journey at Top Service and highlights some of the most notable achievements of our members.

We’d like to take this opportunity to thank Rachel for her incredible 20 years of service and for everything she does for Top Service and our members.

Credit management involves making sure a business gets paid for the goods or services it supplies by checking that the potential customer is creditworthy, then taking all necessary steps to turn the invoices it raises into cash. Put simply, it’s minimising risk and maximising cash. Using his credit management experience that spans over decades, Philip King FCICM, gives us his top tips when it comes to credit management, particularly for SMEs. 

Understand why cash flow is so important to every business. However big they might be, businesses fail when they run out of cash. When the wages, the rent, or a key supplier can’t be paid, then the writing is on the wall and failure is inevitable unless further funding can be found. Recognise the impact of not being paid: suffering a bad debt of £10,000 where the net profit margin is 10% will require sales of £100,000 to recover the bottom-line loss and, on top of that, there’s the opportunity cost of not selling instead to a company that would have paid, the distress and distraction to the business owner, and the cost of the goods or services that have been lost along the way. Monitor cash levels, know what’s coming in and going out, and when, and react when timings slip so a cash flow hole doesn’t open up. 

Know who you’re supplying. The status of the business, the exact name and trading style and, where applicable, the Company Registration Number, are all vital. The status determines who is responsible for the debt and, if the worst happens and you end up in court, it’s imperative that you have the correct details. How viable and sustainable is the business you’re going to supply or contract with, and how creditworthy are their customers? Beware of the domino effect when one company goes bust. Remember, thousands of small contractors fell into insolvency after Carillion collapsed in January 2018. Learn as much as you can about the business, get a credit reference agency report, talk to peers in the industry, and subscribe to Top Service where you can see real-time payment experiences that will help you make the right decision. Never fall into the trap of assuming that, because someone’s got a nice house, or a flash car, or is a “good bloke”, they’ll be a good customer. They may have the big house or the flash car precisely because they don’t treat their suppliers well! 

Agree when you’re going to be paid and never just assume. Talk about it at the earliest possible stage, negotiate and agree what is acceptable to you and the customer, then confirm it in writing so there’s no doubt. What’s the use of being told they’ll pay you in 30 days if their company policy is never to pay in less than 45 days. And, whatever the terms, make sure there’s clarity about when the clock starts and ends ticking. Does 30 days mean the end of the month after the invoice is received, or exactly 30 days? The former can be almost 60 days if you invoice at the start of the month.

Ask for your money. Yes, it’s your money; if you’ve provided goods or services in line with what’s been ordered and you’ve submitted an invoice that conforms to their requirements, the money should be in your bank once the due date is reached, not theirs. If it’s a new customer or a sizable amount, make contact shortly after you’ve submitted it to check that it’s been received, is in order, and is being processed for payment on time. If money hasn’t been received on the due date, ask where it is and when it can be expected. Never bury your head in the sand and hope for the best; if a company is short of cash and making decisions about who to pay, then you want to be at the top of the list, not the bottom. Have a system and process for following up outstanding invoices, record the details of conversations so you can refer back to them, and always do what you said you were going to do when you said you were going to do it. Be courteous and professional, and don’t be afraid to spell out the consequences for your business of not being paid. If you’re getting the run around or inadequate responses then escalate either within the customer’s business to someone more senior, or externally using an organisation like Top Service that has a range of solutions from simple chasing emails that are strengthened by the use of a third-party name, through to full-blown legal debt recovery action. 

The tips in this article are derived from the Philip King Five-Step Model: Business Survival by Getting Paid: https://philipking.net/five-step-model

The ISG Construction Ltd’s statement of affairs has been filed. Here are some key points:

❗ The total amount of un-secured creditors is listed at around the £90,000,000 mark.

❗ISG Central Services Ltd is listed as the creditor with the highest value owed at £48,344,934.83.

❗The next, in order of value is HMRC at £24,245,968.82

❗Owed to employees (inc former employees) is listed as £27,049,390.

❗The statement shows a total estimated deficiency of £333,463,315