It may seem obvious to say it, but when you are in business it certainly pays to know who you are dealing with in terms of prospects and customers – and you will inevitably deal with many different companies.

This is where problems may start. They are not all necessarily the same type of company, and often may have different legal statuses. As a business owner, it is important to know the differences between them and how these variations could impact on your company, either as a customer or as a supplier.

To help make the task simpler and unravel the tangled facts, Riskdisk has published “Know Who You Are Dealing With” – a guide to the different types of company you can encounter and some useful advice on how to deal with them, as well as some advice on how to help your business stay safe. You can download a FREE copy of the guide here.

In this fast moving electronic world it’s so easy to buy and sell and make payments for goods wherever you happen to be and whenever you like. Sadly the criminal fraternity is catching up with the security and finding more and more ways of defrauding companies and company personnel.

Today it’s not just money that’s at stake, it’s the entire identity of your business and you need to take positive steps to ensure you are adequately protected from this clear and present danger.

It’s certainly horrible to think that somebody could be taking your company name in vain and using your well established and proven credit profile for disreputable ends.

Fortunately there are a quite a few things you can do to protect yourself and we have put the key facts into a convenient PDF file for download. It’s worth reading just to make sure you are not a target for identity fraud.

Download Identity Fraud Prevention

New plans revealed by the coalition in the Programme for Government will provide more protection against aggressive bailiffs and unreasonable charging orders. It will also ensure that the Courts have the power to insist that repossession is always a last resort. The plans also ban orders for sale of property on unsecured debts of less than £25,000.

Whilst this is very good news for many, it does raise the spectre of serial bad debtors in business finding new ways to escape payment. Perhaps the time has arrived to instigate a few more credit checks before embarking on new business ventures.

What impact do you think these changes will have on business debt?

The latest quarterly figures released by the CBI have shown an increase in demand for the manufacture and supply of goods from UK firms. Admittedly, some of the growth is due to a weak pound, but the trend does seem to be up.

36% of the 402 manufacturing firms surveyed said they had experienced an increase in orders for their products in the first three months of 2010, although 26% of the responding companies revealed that they had seen a fall. The quarterly figures show a positive growth for the first time since January 2008.

One third of the companies said their volume of export orders had increased, partly due to a weak pound, but many businesses also reported a reduction in profit-margins as well as an increase in the base price of raw materials. Companies do expect to recoup some of this by raising prices during the next quarter,

A key issue that raised its head once again was that access to credit remains a major headache for some firms, despite government and banking reports to the contrary. Have you found difficulty in arranging a business loan? Let us know.

Recent research by the FSB (Federation of Small Businesses) has revealed that many small business owners are still reticent when it comes to approaching the bank for a loan. The research showed that only 18% of the small firms surveyed had approached the banks for new credit. 

The survey of over 1,400 FSB members showed that just 18% of the businesses had applied for new credit, with 50% of these being successful in their application.  The Government keeps suggesting that the banks have been given lending targets, but they certainly do not appear to have materialised in this poll. The same FSB survey also revealed that just over a third of businesses (36%) had their applications refused with 12% still waiting to find out the bank’s decision. 

Incredibly, in this low bank rate market, 16% of businesses with existing finance revealed that they had seen an increase in the cost of borrowing over the last two months. Of these, 44% saw between a 2 and 3% rise, but more worryingly 12% saw interest rates hiked anywhere between 10 and 14%. Only 1% of respondents had seen their borrowing costs decrease. 

At Riskdisk we’re quite surprised that Banks still seem to be slow on the uptake, but more concerned that Government has not stepped in to ensure Small Businesses are helped during the economic recovery. We have gone some way to assisting small businesess with our own FREE Hypermonitoring service, which can help companies avoid the curse of bad debt.

It would certainly be interesting to hear about your experience of the banks.

According to the latest statistics from the ONS, the Consumer Price Index has risen 0.6% to break the 3% barrier in March – this means that the index is now 3.4% higher than it was this time last year. If you calculate the same stats using the old measure, which includes mortgage payments then the inflation figure would be 4.4%.

There are schools of thought that welcome the rises as a positive sign of renewed economic activity but maybe it’s not as rosy as it would appear.

Cost of fuel impacts on inflation

The main cause of this inflation is the rising energy cost rather than economic growth. The cost of transportation by rail, air and road has risen by a huge 11%, mostly due to the cost of fuel. Petrol is now 120p per litre owing to additional tax being applied by the Government at a time when a weak dollar/sterling exchange rate has pushed the oil price even higher.

The likelihood of the Bank of England achieving its 2% inflation target by the second quarter looks to be very wide of the mark indeed and doubtless some action will need to be taken to counter the rise. 

Do you think that this heralds the end of record low interest rates? With inflation nudging 4%, many believe that the bank rate will need to go up to counter the trend.

How do you think this will impact on the recovery? At Riskdisk we are certainly interested in discovering what small business owners think and how higher interest rates will affect business.

We also wonder if the forthcoming election will be influenced by these new figures or whether they will be conveniently brushed under the carpet for a couple of weeks like the volcanic ash.

At Riskdisk we make a point of keeping in touch with what’s happening in the world of small business, and a recent survey by the Federation of Small Businesses and ICM came to our attention. The FSB-ICM ‘Voice of Small Business’ Annual Survey was conducted between September and October 2009 and, received nearly 10,000 responses. It is one of the most extensive pieces of research in the small business sector during the recession.

Key findings from the survey were very revealing – you can click on this Annual Survey link to see the whole document.

53% of small firms introduced new or improved products and services last year and 51% intend to continue innovating next year

27% said their profitability increased over the last year

31% of small businesses said a cut in employers’ National Insurance would improve their economic prospects

31% said if banks were to lend more, or more fairly, that would be a key factor in improving their prospects

19% of small firms are intending to employ more staff in the coming year

Late payers were a very contentious issue with small business owners and the key felons were cited as: Government – 31%, Government agencies 30%, EU institutions 30% and the NHS 29%. In addition 25% of local authorities made late payments.

The private sector paid 34% of all invoices late

34% believe that a cut in business rates would help to improve the economic prospects of the business

The FSB-ICM ‘Voice of Small Business’ Survey 2009 shows that small businesses are clearly at the heart of the recovery, and must be given all the support they need to get on with the job of actively growing the economy out of recession.

At Riskdisk we are always ready to help and support small business with credit information and our unique, FREE Hypermonitoring service, which keeps tabs on customers and prospects and helps businessmen stay ahead of the game.

Many small businesses are now likely to face big bills for new chip and pin machines as the profit hungry banks cash in on their universally disliked decision to get rid of well established cheque guarantee cards.

It is believed that some companies could see their transaction charge costs rise by £800 per year, using the new chip and pin machines that are alleged to replace and remove the need for cheques.

Our big banks, riding on a cushion of £1 trillion in handouts from the government (taxpayers like us), have been accused of ignoring the needs of small business. Last year over 88 million cheques were written and presented with the backing of cheque guarantee cards.

Abolishing these cards leaves small companies with the undesirable choices of refusing business, risking that a cheque might bounce, or paying up for a new chip and pin machine. Customers can only hope that retailers have card readers, or are willing to take a risk on their cheques without a guarantee card, or simply carry large rolls of banknotes around with them.

From a business viewpoint the costs associated with chip and pin machines can be excessive, particularly for those struggling during the recession. Lloyds TSB is said to charge up to £30 per month plus VAT to rent a card reader.  And that’s not all. To this you need to add the charge levied on each credit card payment – up to 3 pc of the transaction and a flat charge of up to 50p per item for debit cards. There are also set-up costs of between £150 and £200. Those companies wishing to use mobile card readers can face bills of £35 a month plus 3% per transaction. Compares these costs with those of accepting a cheque and you begin to see what the fuss is about. Currently cheques cost between 60p and £1 with no other overheads, though some banks charge nothing for the first batch of cheques each month. The cheque guarantee scheme has provided a payment guarantee for small businesses and tradesmen for more than 40 years and looks set to be abolished without discussion.

The decision to scrap the cheque guarantee card and phase out cheques altogether by 2018 was taken by the Payments Council last year. It argues that cheque use is on the decline, and claims a drop of 70 pc in the use of guarantee cards over the past five years. The Payments Council is intended to represent the interests of small businesses and consumers, but it is in fact dominated by the banks, which occupy 11 out of the 16 available board positions.

How will the decision affect your business?

At Riskdisk we were quite pleased to see that Bank Interest rates will stay at 0.5% for yet another month. At least we seem to have some stability.

The positive economic data released this morning by the OECD indicates that UK growth will outpace most other rich countries this quarter, so it’s no surprise that the Monetary Policy Committee has chosen to keep current interest rates and finish the quantitative easing programme.

Yesterday’s data points to a rising economy. The official figures revealed that the 1% rise in industrial output was double that expected in February, suggesting that January’s 0.5% fall was just weather related after all.

Figures for food price inflation hit a record low last month, reducing concern about the inflationary impact of the Bank’s policies.

Maybe there are some real green shoots coming through.

Riskdisk has caused a bit of a furore in the glitzy world of football clubs. A phone call from a journalist requested credit scores for many of the well known clubs, some of whom pay millions for players in salaries and transfer fees. The results appeared in many national newspapers and reports stated that using Riskdisk’s recognised credit scoring system some of the clubs came into the category of being a credit risk. All we did was present the information from the available financial information on our database and provided the appropriate advice that we would give anybody requesting a credit check. At Riskdisk our job is to present the facts in a clear, unambiguous manner, enabling businesses to make the right credit decisions.

Let’s look carefully at the situation. All Riskdisk has done is to gather together information and analyse the financial situations of the clubs based on this available data, and reached the inescapable conclusion that, in some cases, you would be foolish to deal with the company based on its declared financial position. It’s no different to the thousands of credit scores being revealed by Riskdisk on a daily basis.  The resultant sage advice is being given to small companies.  They want to make sure they are dealing with a business that is likely to pay their invoices, and they want to steer clear of those businesses that clearly can’t or won’t.

It is probably fair to say that beyond the credit scores some of the football clubs are safe bets. Certainly the banks seem happy to lend them millions.  However, for those of us who are not dealing in millions and diamond studded Bentleys, it’s good to know that you can find out who is likely to walk away from a business debt and moreover it won’t cost you a transfer fee to find out.