PKF warns firms to control credit
Businesses in the East Anglia are being warned by accountants & business advisers PKF East Anglia to keep a tight rein on credit in the coming months and that cash is king.
David Merrygold, pictured, PKF's corporate recovery expert, says calls are now flooding into his office from businesses looking for his advice.
He said: "Businesses need to be more cautious than ever. Almost one per cent of the UK's adult working population have been made bankrupt since the turn of the millennium, according to Government statistics.
"The price of oil has just hit $100 a barrel, albeit briefly, but that will bring higher business costs, reducing profitability and this can lead to job cuts.
"It will push up the price of transport and goods including plastics - all of which will be passed on to the consumer."
Christmas sales started before Christmas Eve this year with bargains of up to 50 per cent off as retailers sought to offload excess stocks.
And there are reports that some commercial landlords are offering a discount on rents to tenants to help them stay in business as some rent is better than no rent.
Mr Merrygold added: "My phone is constantly ringing now with enquiries about insolvency. My best advice to businesses in East Anglia is to keep tight control of who you give credit to. If someone is late paying off their debt, don't give them any more - you could be throwing good money after bad.
"Some long-term relationships with customers may well be put under great strain by being refused endless credit, but if your customer goes down, your business could be at risk, too.
"If you think you are heading into trouble, seek professional advice as soon as possible."
David Merrygold is a licensed insolvency practitioner at PKF East Anglia, which has offices in Norwich, Yarmouth and Ipswich in East Anglia, and can be reached on 01473 320700.