Insider Intelligence is our construction industry specific information that provides up to date, relevant, reliable information to enable more informed business decisions to be made when accepting an application for a trade credit account.

When mainstream agencies look at credit information they number crunch. They use the last set of accounts and any public record information to produce credit limits and scores. It’s a pretty good way to look at credit information but it can overlook information that a person notices, for instance:

• What has happened from the time the business filed their last set of accounts to the time the credit check is performed?

A business has nine months from its financial year end to file its accounts. Then there is a whole year trading plus nine months that is unaccounted for until the next set of accounts is filed. 

That is where industry specific trading experiences come into play. It’s these trading experiences that tell a potential supplier how the data subject is paying other suppliers right now. Which, when a business is looking at whether they are willing to risk extending credit facilities to another business is what they need to know to make an informed decision. What is the likelihood that they are going to be paid on time, late or not without a lot of time, effort and cost or even at all. 

The people and ears to the ground element of insider intelligence is spotting those things that just don’t look right or when trading experiences change. It’s the information that a computer, algorithm or any amount of number crunching will miss. For example, the 16 year old Director that following investigation turns out to be the son of someone with a bankruptcy order, potentially acting as a shadow Director.  It’s the Director our helpdesk team remembers from another business that traded fraudulently 10 years ago that Companies House haven’t been able to link.

Maybe it’s from generally paying suppliers but exceeding terms, to accounts now remaining overdue. It’s that information that our helpdesk team spots which leads them to look a little more in depth into a data subject and potentially pick up on an unadvertised winding up petition. Or another TS customer who has filed a petition today. Or something the business has told our debt recovery team that doesn’t add up that starts some extra investigations. 

“When considering whether or not to extend credit facilities, having information to help you calculate whether to expect to be paid on time, late or struggle to collect payment is vital. 

We urge our members and the wider construction industry to protect their businesses by  actively monitoring trading experiences and acting upon early warning signs.  Don’t wait for the information to come to you, use an industry specific service that can spot changes in payment patterns resulting in regular, more in-depth and up to date checks being carried out to pick up information quickly.

If you already have a trading history with the business look at the orders that have previously been placed. Some companies will establish a good line of credit with suppliers, placing small, regular orders to give the appearance of a good customer. However, once an order pattern starts to change, ask questions to establish the reason for the change.

Top Service Ltd gives you access to this construction specific information. As well as information you would expect to see on a standard credit report,” Emma Miller Company Director, Top Service Ltd.

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences. Our insider intelligence can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

A winding-up petition is the first step towards obtaining a winding-up order against a business that has substantial unpaid debt.  If a winding-up order is subsequently made, it will enter compulsory liquidation, cease trading and the conduct of its directors will be investigated.

What does it mean if one of your customers has a Winding Up Petition issued against it?

If one of your customers has had a winding up petition issued against it, it is because one of its creditors has decided to commence proceedings to recover monies owed to them.

A winding up petition is usually a sign that the customer is not paying its debts as they fall due and is usually implemented as a last resort, having already tried to reclaim monies via a statutory demand or other enforcement action. As such, it is not advisable to permit the customer to extend its liability with you until the winding-up petition has been dealt with by the Court.  

If I am owed money by a customer, can I issue a Winding-Up Petition against it?

You can issue a winding-up petition against a corporate customer (“the Debtor”) if:

• at present, there is a debt due of £10,000 or more; 
• the debt is undisputed;
• the debt is not due under a business tenancy; and 
• you have given the Debtor 21 days’ notice inviting the Debtor to make proposals for payment of the debt and the Debtor has either failed to make any proposals or not made proposals for payment to your satisfaction.

What is the process?

Once the petition has been issued, it will be sealed by the Court and listed for a hearing date, usually around 6 weeks’ time.  

Before the hearing of the petition, it has to be served on the Debtor.  It is advisable to use a process server to do this to ensure that service has taken place correctly.

Seven days after the sealed petition has been served on the Debtor it can be advertised in the London Gazette.  This allows other creditors of the Debtor to see the petition and gives them the opportunity of supporting it. 

Once a petition has been advertised, the Debtor’s bank will usually freeze its accounts.

If a winding-up order is made by the Court at the hearing of the petition the Debtor will be deemed to be in liquidation, the business of the Debtor will be automatically closed, the Official Receiver will be appointed as its liquidator and the Debtor’s assets will be realised.  Any realisations will be paid proportionally to the Debtor’s unsecured creditors, after the costs of the petition, the liquidator, the liquidation process and possibly the secured creditors have been paid.

What if another creditor has already presented a winding-up petition against the Debtor?

There should only be one winding-up petition issued against the Debtor at any time.  However, any creditor of the Debtor can support an existing winding-up petition and, if for any reason the petitioning creditor decides not to proceed with the petition, any other creditor or group of creditors who could have presented a petition can, with the Court’s approval, take over control of the issued petition.

If you require advice please contact Alison Beard, Head of Insolvency, Silverback Law, on 0844 967 2700 or alison.beard@silverbacklaw.co.uk.  

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (15 Jan 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in January 2022 was 1,560:

• More than double the number registered in the same month in the previous year (758 in January 2021), and
• Similar to the number registered two years previously (pre-pandemic; 1,508 in January 2020).

In January 2022 the report confirms there were ‘1,358 Creditors’ Voluntary Liquidations (CVLs), more than double the number in January 2021, and 34% higher than in January 2020. Numbers for other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic, although there were more than twice as many compulsory liquidations as in January 2021.’ https://www.gov.uk/government/statistics/monthly-insolvency-statistics-january-2022/commentary-monthly-insolvency-statistics-january-2022

Temporary Insolvency Restriction Protections put in place to support businesses during the pandemic started to phase out from 1st October 2021. New targeted measures to support small business and commercial tenants will continue until March 2022 and include:

• Protect businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.
• Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have more than 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

A phoenix operation is when a company is liquidated and the directors simply buy its assets cheaply, set up a new company, and continue to trade with the same or a similar name. Hiding previous failures from the public, it lets them leave creditors with nothing. As phoenix operations rise from the flames, it’s often their creditors that get burnt. 

Is this legal?

Phoenix companies can be legal, but there are strict regulations to comply with, specifically, Section 216 of the Insolvency Act 1986.  If this is not adhered to, those involved in the management of the phoenix company may be subject to criminal and/or civil sanctions and liabilities.

What does the law say?

When a company is placed into insolvent liquidation, Section 216 prohibits its directors from ‘involvement’ in another company with the same or similar name for five years, from the day insolvent liquidation begins. This may include existing companies/trading entities, including those that have been recently incorporated and/or commenced.  The law is designed to prevent directors hiding their old company’s failure from the public. Although they can legitimately buy old company assets, they must make it clear the new business is separate from the old one.

What is involvement and what’s a prohibited name? 

A person is considered to be involved in a phoenix company if they are: a director of a company known by a prohibited name; in any way contributing to the formation, promotion, or management of such a company, or in the carrying on of a business with a prohibited name. 

A prohibited name is one the insolvent company was known by at any time in the 12 months before it was placed into insolvent liquidation, or one so similar it suggests an association. This also applies to a company’s trading names and/or abbreviations associated with it. 

There are three statutory exceptions when an individual will not be deemed to have breached Section 216, which are:

• When (before a breach has occurred) directors who have been involved in the insolvent company give notice to its creditors that they are, or are to be, involved in a company that is acquiring the whole or substantially the whole of the insolvent company’s business from the liquidator (or administrator).
• When the directors make a successful application to court for permission to be involved in an entity using the prohibited name; or
• when the company with the prohibited name has been operating (and not dormant) for at least 12 months prior to the insolvent company going into liquidation.

Before any of these exceptions are relied on, it’s strongly advised that those involved ensure they receive legal advice. 

If a person acts in breach of Section 216, they may be subject to criminal and/or civil sanctions.

• Under criminal law, the individual is liable to imprisonment or a fine, or both if convicted.
• Under civil law the individual could be prosecuted for disqualification as a company director.
• Under civil law the individual is automatically jointly and severally liable with the new company and anyone else acting in breach of Section 216, for its ‘relevant debts’, even if it is a limited company or partnership. What constitutes ‘relevant debts’ will be fact dependant, but they will be those debts and liabilities incurred by the new company, while it’s known by the prohibited name.

Accordingly, a creditor of a new company using a prohibited name can bring a civil action directly against those individuals involved in its management.  They don’t need to pursue the company itself, although, if it is not in an insolvency process, it may be worth bringing an action against multiple defendants.

Phoenix companies can offer a solution for directors and creditors of failing companies. However, they’re often administered incorrectly, leaving creditors aggrieved, and individuals unaware of the personal liability they may be exposed to. If you are a creditor of what you believe is a phoenix company, particularly one that has subsequently been placed into an insolvency process, you may wish to seek advice on the options available to you and the potential parties that you can pursue for the recovery your debt.

If you require advice in relation to Section 216 of the Insolvency Act 1986, as a creditor or director of a phoenix company, please contact Alison Beard, Head of Insolvency, Silverback Law, on 0844 967 2700 or alison.beard@silverbacklaw.co.uk.  

“At Top Service Ltd as well as monitoring companies, members have the ability to monitor individual company directors.  Our director monitoring service will inform you if a director is appointed at another company or if they resign any of their directorships.

Keeping track of the individuals behind a company is often as important as monitoring the company itself.  As well as providing you with an up-to-date picture of a person’s business interests it may also alert you to potential ‘phoenix companies’. A ‘phoenix company’ is one which rises from the ashes of an insolvent company, and it usually :

• Has a similar name to the failed company.
• Carried out the same trade as the failed company.
• Trades from the same address as the failed company.
• Has the same directors as the failed company.

A phoenix company will typically be set up before the original company goes under. This is a common occurrence in the construction sector and is not illegal unless it can be proven that the directors deliberately defrauded creditors.” Emma Miller, Company Director Top Service Ltd 

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (19 Jan 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in December 2021 was 1,486:

• 20% higher than the number registered in the same month in the previous year (1,237 in December 2020), and
• 33% higher than the number registered two years previously

The published report also states that in ‘December 2021 there were 1,365 Creditors’ Voluntary Liquidations (CVLs), which is 37% higher than in December 2020, and 73% higher than in December 2019. Other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic.’

https://www.gov.uk/government/statistics/monthly-insolvency-statistics-december-2021/commentary-monthly-insolvency-statistics-december-2021

Temporary Insolvency Restriction Protections put in place to support businesses during the pandemic started to phase out from 1st October 2021. New targeted measures to support small business and commercial tenants will continue until March 2022 and include:

1. Protect businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.
2. Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

A good invoicing system sends a professional message and helps define your business brand as one to trust. Formalising your demand for timely payment, the right invoicing process will keep your business organised and will be particularly useful should a customer fail to pay, leading to legal proceedings. 

An invoice is a record of the transaction between a buyer and a seller, so accuracy is crucial. When you sell a customer goods or services, and you’re both VAT registered, an invoice is a legal requirement. In other circumstances invoicing remains important as it provides written evidence of a transaction having taken place and, many customers simply won’t pay until an invoice is issued.  

What should a standard invoice include?

A standard (non-VAT) invoice should include:

·       The word ‘Invoice.’ The document should be easily recognised as an invoice, as opposed to a quote, credit note, advice note or receipt. An invoice is not the same as a receipt, which is proof of payment, not a request for payment. 

·       A unique invoice number that is also recorded in your files. 

·       Your full business name, address and contact details. Sole traders must provide their personal name and any business name, as well as an address where legal documents can be delivered if they’re using a business name. Limited companies must include the full company name as it appears on the Certificate of Incorporation (on Companies House), along with the company number. It is paramount, particularly when the customer is a limited company, that the customer name on the invoice matches the name on this certificate. These must be the same, down to the last letter, space, and character. If they differ, you are effectively (and in the eyes of the law) issuing invoices to an entirely different entity/or wrong party. This can be problematic if a customer fails to pay, and legal proceedings are set in motion. 

·       The full company name of the customer you’re invoicing, as it appears on the Companies House Certificate of Incorporation, or the full trading name if it’s not a limited company. The full address of the customer should also be included. 

·       A clear description of the transaction with goods or services itemised, line by line. 

·       The date that goods or services were supplied. This is not the same as the date of the invoice itself but is usually not more than 30 days beforehand. A VAT invoice must usually be within 30 days of supply or (advance) payment. 

·       The date the invoice was issued. As well as helping to identify the unique invoice, an invoice’s issue date defines credit duration and payment due dates, which is crucial for companies offering a credit facility. If you have agreed a payment date with customers, it must usually be within 30 days for public authorities or 60 days for business-to-business transactions. Where payment dates are not agreed or stipulated, the customer must pay within 30 days of getting your invoice or the goods or service.  In some instances, invoices can be rendered due on date of delivery of the goods or service. The date the invoice was issued will also let your customer know which tax year the invoice belongs to. Additionally, if a company is late paying an invoice, they may be liable for statutory interest charges. At time of writing, statutory interest on business-to-business transactions is at 8% above the Bank of England base rate. This is the rate you can charge interest on late payments unless you’ve included a different rate of interest in your terms and conditions of sale (contractual interest). 

·       The money outstanding and the payment terms, for example, 30 days from receipt of the invoice. The final amount should be clearly stated and, where it is helpful, you should provide a breakdown of unit costs, delivery charges etc. 

·       If your business is VAT registered, the invoice should include the VAT charged and the specific company VAT number. 

How do invoices affect credit accounts and personal guarantees? 

When creating an invoice, it’s important to consider how its terms will interact with other contractual documents set up between your business and the customer. For example, if goods or services are purchased on credit, the invoice should usually specify the terms that apply to the transaction and provide information on the duty of the parties accordingly. Or, if a company holds a personal guarantee for an individual who has been operating as a Sole Trader, but that person then registers as a Limited Company under a different name, the personal guarantee may stop providing protection.

A solid invoice template that has been carefully considered is a great starting point. Regularly reviewing this document and having a professional with legal expertise review your invoicing process is a wise choice. 

Whether you’re looking to improve your system and records, present your business more professionally, position yourself for better credit management, or protect yourself from avoidable future costs, invoicing is a key business focus. 

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

“We welcome the opportunity to talk to you about any bespoke changes you would like to make to our debt recovery procedures to fit the culture you have for maintaining customer relationships, whilst addressing the need to keep cash flow as fluid as possible for your business. Please contact our collections team to talk through any individual cases or to explore how else we can support you,” Emma Miller, Company Director Top service.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (17 December 2021) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in November 2021 was 1,674:

·       88% higher than the number registered in the same month in the previous year (891 in November 2020), and

·       11% higher than the number registered two years previously (pre-pandemic; 1,509 in November 2019).

The report also states that ‘for the first time since the start of the coronavirus (COVID-19) pandemic, the monthly number of registered company insolvencies was higher than pre-pandemic levels. This was driven by the higher number of creditors’ voluntary liquidations (CVLs).’

(Statistics published in https://www.gov.uk/government/statistics/monthly-insolvency-statistics-november-2021)

Temporary Insolvency Restriction Protections put in place to support businesses during the pandemic started to phase out from 1st October 2021. New targeted measures to support small business and commercial tenants will continue until March 2022 and include:

1. Protect businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.
2. Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.

“The true picture of the impact of company and individual insolvencies to the construction industry is likely not to be fully understood until the 12 months ending 2021. With the threshold for issuing a petition being increased we advise our members to look at their options for collection and take advice from their collections service provider on the best course of action.”  Emma Miller, Company Director Top Service Ltd

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

Companies House has called for company directors and accountants to file their annual accounts due by the end of December early to avoid delay and to enable more time for the processing of accounts filed on paper for the 2020/21 financial year. 

Top Service director Emma Miller has the following advice:

“December is always a busy month, so It is important you allow extra time for the processing of your company accounts for your own peace of mind. As a director of a limited company, you need to ensure that you are getting your company’s annual accounts signed off well before the filing deadline.  You then need to communicate with your accountant to ensure that the financial statements are being filed at least five working days before the filing date.  Some accountants may be in a routine of ‘just in time’ filing so don’t assume that the accounts will be filed as soon as you’ve signed them off.  Ask your accountant for a specific date that they will be filed and be aware that weekends and bank holidays will have an effect on when Companies House will actually upload the information to the system and pass it onto the credit reference agencies for analysis. Communication is key here.”

All UK limited companies are required to keep accounting records regardless of whether they are trading or not.  Every year a limited company is required to file a set of accounts with Companies House, with the details of the information depending on the size of the company.  Even non-trading companies must file ‘dormant accounts’ unless they have a special exemption.  Private limited companies have nine months after their year-end to file while public limited companies must file within six months.  Credit reference agencies then use sophisticated computer programs to analyse this financial information and suggest a suitable credit limit, but everything hinges on ‘current financial information’.  Once the filing deadline has passed the previous year’s accounts are too old for analysis.

Top Service has previously reported occasions when companies have filed their accounts at the last minute, for example, accounts are filed on the last day of the month which happens to be a Friday.  It’s a bank holiday weekend so Companies House doesn’t upload the information until Tuesday, so the accounts didn’t make the filing deadline and the credit reference computers may temporarily reduce the suggested credit limit to zero until the new accounts can be analysed.  Most limited companies engage a firm of qualified accountants to prepare and file their financial statements and they may routinely be filing very close to the deadline without considering the wider implications.

 “This problem seems to apply to very large companies as well as smaller companies. We have seen companies with suggested credit limits of £10m whose accountant is filing on the very last day of their filing deadline and risking their client’s credit limit temporarily being reduced to zero.  The only answer is for company directors to take responsibility for when their information is actually being submitted to Companies House,” Emma Miller.

For further information and to read the full Companies House guidance please click here

The terms and conditions document for any business is the contract between the business and the customer for your supply of goods or services, and which regulates the business relationship.

The same document could be called many other names, such as “business terms”, “terms of sale” or “T&C’s”.

To many businesses, “terms and conditions” presents an image of lengthy, legal jargon. However, it is a crucial point of reference when issues arise.  Terms and conditions need to be valid in law and in court. 

Why use Terms and Conditions?

The purpose of a set of terms and conditions is to confirm what you have agreed, or to present the terms under which your business will accept business, including those that:

• define the contract
• set out business procedures
• protect your business and your rights
• limit your liability

If you are paid upfront, it still matters that you should have a record of your contract. Quite simply, that you have been paid for the goods or services already does not always protect your business from issues arising later. 

Litigation can be stressful and takes key focus away from the business. Defending or pursing a claim can also be costly. It is far easier to have good set of terms and conditions in place to help avoid problems and litigation. 

What should the Terms and Conditions document include?

A well-drawn terms and conditions document should include, amongst many others, the following main provisions.

• Definition of the contract

Your terms should make clear what you are selling/supplying.  The goods and services could be described in detail or by reference to another document, such as a sales brochure or your business web site.

• The price

This should include all variations and circumstances as well as provisions for increase.

• Method and timing of payment acceptable to you

Your contract should include late payment provisions. In cases where an ongoing service is provided, these should include default and penalty provisions.

• Provisions relating to carriage, delivery, risk and insurance

Every business selling goods should have their own terms to cover these areas of activity.

• Limitation of your liability

These terms limit the damages that you have to pay to your customer if your goods or services fail.

• Termination provisions

Some contracts are effectively terminated when the transaction is complete, but others can be ongoing or cover a period of time.  Consideration is needed to establish what can cause termination of the agreement/contract.  Situations regarding payment and delivery of goods can cause termination if this is contained within the terms and conditions.  

• Data protection and privacy

The Data Protection Act imposes strict duties. It is necessary to tell customers how you intend to comply by telling them what data you hold and why.  If you trade online, you may refer to your privacy notice as displayed on your website.

It is essential that your customer agrees to the terms bound to them.  The terms and conditions can clearly state the situation the parties are bound by the terms of the contract. 

DIY Terms & Conditions

It is important to mention that a business should have its own unique set of terms and conditions. Each company has its own obligations, as well as where and how they do business. Copying terms meant for another business, or indeed attempting to draft their own without proper legal advice, is not advisable.

Why should you review your existing Terms and Conditions?

It is important to review your terms and conditions on a regular basis. An annual review from a specialist solicitor is advisable.  

There may have been a change within your business or the market in which you trade. There could even have been a change in the law. 

As a minimum, most SMEs should consider the following at each review:

• Current customer base and Consumer Protection laws
• Business structure and size, affecting the areas in which you operate, factoring in expansion or reduction of your business
• Changes in relevant law and legislation
• Implication of Brexit 
• Implications of trade deals
• Legal jurisdiction, where you trade geographically and who with
• Protection from payment issues arising

Terms and conditions are a useful recovery method available to creditors/lenders, hence, the drafting and updating of terms and conditions needs careful consideration and covers all possible scenarios. 

We work with trusted partner Silverback Law, specialists in both debt recovery and commercial litigation, making them the ideal choice for you to set out strong terms and conditions.

By enlisting the help of professionals, you can gain absolute peace-of-mind that should the worst happen and a debtor default, both your investments and your business itself are protected. Silverback Law can oversee every stage of drafting/updating your terms and conditions so you can focus on day-to-day business, knowing that from a legal standpoint you’re covered and, if you need it, the debt recovery process will be simple. 

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

“We welcome the opportunity to talk to you about any bespoke changes you would like to make to our debt recovery procedures to fit the culture you have for maintaining customer relationships, whilst addressing the need to keep cash flow as fluid as possible for your business. Please contact our collections team to talk through any individual cases or to explore how else we can support you,” Emma Miller, Company Director Top service.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

Now the economy has fully opened and the financial support is needed to be repaid and / or coming to an end it is important that credit management stays on top of the priority list. We urge our members and the wider construction industry to focus on understanding their customers and suppliers to manage business relationships whilst keeping cash flowing and actively monitoring trading experiences to act upon early warning signs.  Above all, ensure your credit control team has the tools and support to be able to be proactive and use an industry specific service that can spot changes in payment patterns resulting in regular, more in-depth, and up to date checks being carried out to pick up information quickly.

Information is key!

Information is key so they say, the more information you can acquire on a potential customer the greater your chances of securing payment on work carried out or supplied. Using a credit application form is the easiest way to ensure relevant and appropriate details of the potential customer are being taken. It doesn’t have to be long winded or lengthy, simply take the basic details you need to open a credit account and protect yourself:

Company Name AND Registration No

The entity of business if not Limited

Names of key people in the business

Contact numbers & email addresses

Using a credit application form is one thing but the key to protecting yourself is in the detail and checking the form and information provided for any anomalies is where you will be able to protect yourself the most.

Check?

• Use a credit reference agency to check you have been approached by a bona-fide company.
• Check the Directors of the Limited company and see if they have a lot of either active Directorships, resignations or insolvent companies.
• Use your credit reference agency to look at the trading history of the business, have other suppliers experienced non-payment or made enquiries about potential fraudulent applications.

Research and Monitor Company Trading History

We urge our members and the wider construction industry to protect their businesses by actively monitoring trading experiences and acting upon early warning signs.  Don’t wait for the information to come to you, use an industry specific service that can spot changes in payment patterns resulting in regular, more in-depth and up to date checks being carried out to pick up information quickly.

If you already have a trading history with the business, look at the orders that have previously been placed. Some companies will establish a good line of credit with suppliers, placing small, regular orders to give the appearance of a good customer. However, once an order pattern starts to change, ask questions to establish the reason for the change.

At Top Service we encourage members to actively monitor company directors.

What you should look out for:

New directors being appointed can have a positive effect on a company for up to 6 months as they are bringing in potential new business.

Directors resigning can have a negative impact on the business for up to 6 months as the director could be taking business and knowledge away from the company.

If a director has any insolvent companies this can have a negative impact on their current company’s score.

Directors/personal guarantee what to consider? 

A personal/directors guarantee is a promise bound in law. It’s a contract that says if the principal individual or company accessing credit (in the form of goods, money, or services) is unable to meet their financial obligations to the lender, then the guarantor will step up and do it on their behalf. 

Personal/directors guarantees are used in all sorts of credit situations. When a bank loan or overdraft application is made, there’s sometimes a third party acting as guarantor to the borrowed money. This individual or business gives the lender more confidence; should the primary borrower find themselves unable to make repayments, the guarantor will step in. In some situations, a guarantee is the difference between a deal falling through and a deal taking place. 

What could go wrong? 

A well-written, carefully considered personal guarantee can push your business, and its financial success, forward. By giving you extra security to trade more freely, they can let you expand in new directions with minimal risk.However, this value is lost if the contract is flawed, and you’re left as vulnerable as if you’d had no personal guarantee in place at all. These are just some of the ways personal guarantees can lose their intrinsic value: 

• The agreement hasn’t had the benefit of being seen and signed off by a specialist solicitor. 
• The wording of the agreement is unclear. 
• The guarantor hasn’t been given the opportunity to seek legal advice or properly understand what they’re signing.  
• An original copy of the agreement hasn’t been received or the identity of the guarantor hasn’t been validated. 

How to avoid the pitfalls of personal/director guarantees 

Personal/directors guarantees can be a very useful route to recover your money but the way they’re written needs to be watertight. There should be no grey areas, all key clauses should be included, and a specialist solicitor should lead the way. Without these a signed guarantee can be discharged by the courts, leaving you powerless and out of pocket. 

The most failsafe way to avoid a useless personal guarantee and protect your money is to use a specialist solicitor. 

By enlisting the help of professionals, you can gain absolute peace-of-mind that should the worst happen and a debtor default, both your investments and your business itself are protected. Silverback Law can oversee every stage of the personal guarantee drafting, creating contracts that let you focus on day-to-day business, knowing that from a legal standpoint you’re covered and, if you need it, the debt recovery process will be simple. 

We work with trusted partner Silverback Law specialists in both debt recovery and commercial litigation, making them the ideal choice for you to set out the terms of a strong personal/director guarantee. 

Personal/directors guarantee service

 What we offer:

1. Free consultation on Personal/directors guarantees
2. Reduced fixed fee for drafting a stand-alone deed of guarantee
3. Reduced fee for advising and drafting on incorporating guarantees to account opening forms
4. Reduced fees for advice and drafting of terms of business

For more information and help with personal/directors guarantees or to discuss how we can support your credit control and debt recovery processes please contact our helpdesk team today on 01527 518800 or email helpddesk@top-service.co.uk