A survey from Intrum Justitia has revealed that Scottish businesses are more at risk of not getting paid than last year – putting their long-term stability in jeopardy. The research, conducted across Scotland, found that half of Scotland’s businesses believe their future survival is threatened by late or non payments from customers and overall payment risks are increasing.

Small businesses are seriously threatened from liquidity issues as they rely on healthy cash flow but have limited resources to chase late payments. When combined with rising inflation, utility prices and interest rates, late payments could be enough to push small businesses into serious financial difficulty and possibly even bankruptcy. With 65% of Scottish businesses currently suffering from liquidity issues due to late or non-payments, the negative late payment trend could seriously impeded Scotland’s economic growth plans.

The European Payment Index from Intrum Justitia surveys companies across different economies, regions and sectors on issues around payment loss and the consequences of late payments. The resulting index – a value between 100 and 200 - illustrates a company’s relative payment risk and serves as a useful benchmark for other businesses to judge current risks and take the necessary action.

In Scotland, the average payment risk increased to 142 from 138 at the previous update in August 2006. In these circumstances, Intrum Justitia recommends a comprehensive review of credit management practices. A consistent and comprehensive credit management policy, tailored to the individual risk of a particular business, has proven to be highly effective at increasing the chances of receiving payment and promoting long-term business health.

• Consumers will borrow an additional £313m
• The average household debt will increase by over £13
• 330 people today will be declared insolvent or bankrupt
• Bank and building societies will hand out £1bn in mortgages
• Citizen Advice Bureaus will deal with 5,300 debt problems
• The average car will cost £15 to run
• The average home will cost £30 to run
• Raising a child to the age of 21 will now set you back £23.50 daily
• The price of a typical house will increase by £46 today
• 24.3m transactions worth £1.3bn will be spent on plastic cards
• £82m will be spent online
• 1/3rd of all groceries we buy today will end up in the dustbin.

www.creditaction.org.uk

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The growth of Scotland’s business sector is vital for future economic success and small businesses have a critical role to play. Yet anyone running or starting a new business today is faced with alarmingly high rates of business failure within the early years and increasing financial pressure. The SNP focused much of its election campaign on persuading Scotland’s business community that they had its best interests close at heart - but what changes are we likely to see under its minority administration and what will they mean for the future of Scottish businesses?

John Swinney, Cabinet Secretary for Finance and Sustainable Growth, who led the SNP between 2000 and 2004, is responsible for delivering the policies set out below. One of his deputies is Jim Mather, Minister for Enterprise and the Environment. Mr. Mather has long been a key part of the SNP’s campaign to attract business support and he will no doubt continue to play a role while the SNP is in power.

The SNP manifesto included many business friendly proposals and there was a distinct leaning towards improving the long-term survival prospects of our largest business sector – the small to medium enterprise (SME):

• Removing business rates from 120,000 smallest SMEs
• Cut the level of business rates for a further 30,000 companies
• Reduce regulation of business
• Introduce a presumption in favour of private companies for public contract tenders

On a positive note, early sessions of First Minister Question Time reaffirmed the SNP’s commitment to reducing the number of small businesses subjected to business rates – which should improve the financial stability of existing companies and encourage new start-ups.

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According to creditaction.org total UK personal debt at the end of July 2007 stood at £1,355bn. The growth rate increased to 10.1% for the previous 12 months which equates to an increase of £117bn. Aside from mortgages, the average consumer owes over £4,515 through a combination of credit cards, motor and retail deals, overdrafts and personal loans.

The Bank of England governor continues to warn that increasing debt will continue to fuel rising inflation interest rates are steadily rising. At a business event in Wales earlier this year, Mervyn King cited the increasingly widespread availability of finance and credit as a key issue and advised consumers to consider rising interest rates when deciding what they can afford to repay. This warning represents a significant change of opinion from the Bank, which has previously maintained that rising personal debt will not adversely affect the economy. To view the full speech, visit: www.bankofengland.co.uk

While business and public sector organisations are in general paying more promptly, consumers across the United Kingdom are taking longer to pay according to Intrum Justitia’s European research. In Scotland, consumers delayed payment by 0.7 days more than the previous year and by 1.5 days more in England and Wales. In the Republic of Ireland however, consumers are paying slightly more promptly than before, with payment delays reducing from 14.1 days to 13.7.

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Intrum Justitia are pleased to announce updated websites for Stirling Park and Intrum Justitia Scotland. The core value of Intrum Justitia is to lead the way in customer service and technology is key to this. Alongside the introduction of online services, the new websites reflect our commitment to enhancing our customers' experience and driving the industry forward through innovation. You can view the websites in more detail by clicking the links below.

Stirling Park : www.stirlingpark.co.uk
Intrum Justitia Scotland : www.intrumscotland.com


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Intrum Justitia Scotland has launched a flexible and low-cost online product for small-to-medium businesses designed to protect cash flow and ensure long-term business health. The product is intended to help reduce the high levels of debt owed to Scottish businesses – currently standing at £1.5 billion.

Join the Club
For an affordable membership fee, Scottish companies can significantly reduce the risk of bad debt from unpaid invoices by signing up to On Demand – an outsourced credit management tool from Europe’s leading service provider.

With 99 percent of Scottish businesses classified as a small-to-medium enterprise (SME), the growth of this sector is vital for future economic success. A planned and strategic credit management process enables SMEs to reduce the associated costs of slow or non-payment such as lost interest, internal administration and communication costs – and most crucially, loss of actual money owed.

For more information visit www.ondemandscotland.com

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Statistics show that personal debt in the UK is rising exponentially with the latest figures standing at £1,325bn. Increasingly aggressive marketing tactics – particularly those aimed at young adults - and a lack of financial understanding among Scotland’s youth mean that future scenarios could be even worse. Stirling Park have once again teamed up with the Scottish Centre for Financial Education (SCFE), part of Learning and Teaching Scotland, to help re-address current attitudes to debt and equip tomorrow’s adults with the skills and knowledge they need to manage debt responsibly. Jim Lally, Director of the SCFE, talks about how the education initiative is progressing.

Credit has an important part to play in our society. No one will argue that families benefit enormously from delayed payment schemes, particularly those that are genuinely interest free. But with the ever-growing offering of different and often confusing credit options, how do young couples sort the good from the bad and the downright ugly? With high levels of debt a stark reality for many families today, we must ensure that tomorrow’s adults have the knowledge and confidence to make better financial decisions and avoid the lure of unmanageable credit.At the SCFE, we believe that education from an early age is crucial for reversing current attitudes to debt.

Managing money is one of the most important and challenging features of everyday living, however many young people feel this area of education has not been sufficiently developed. In response, the SCFE designed a workshop which brings teachers and financial organisations such as Stirling Park together to develop practical strategies and materials for delivering financial education to school children.

The workshops are now in their second successful year and have won widespread support from the teachers involved, with more and more schools across Scotland participating. The participants include teachers of social education, mathematics, business education, home economics and social and vocational skills. The programme, which consists of short presentations and classroom simulations, receives consistently positive feedback from the teachers who recognise the important contribution financial organisations can make to development of the Scottish curriculum.

For more information on the initiative please visit: www.ltscotland.org.uk/financialeducation

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Scotland’s business community gathered at The Hilton Glasgow for a lavish awards dinner on 5th September and Intrum Justitia Scotland was a key supporter of the event.

Robin Hagman, representing Intrum Justitia, presented the "Small to Medium Sized Company Deal of the Year Award" to Peter Scholes and Bob Rooney of Energy Environmental.

The evening, organised by the publisher of The Scottish Business Insider, is an annual event designed to recognise Scottish success in significant financial deals. With Scottish-based advisers becoming increasingly involved in not only Scotland but the wider UK and overseas markets, the competition this year was particularly stiff.

As a sponsor of the event, Intrum Justitia presented the award for ‘Small/Mid-Size Company Deal of the Year'. This award is specifically for companies with a pre-deal turnover of less than £20 million and is designed to ensure that deals of all sizes are recognised within the Scottish business community.

Speaking at the event, Ann Wood, Managing Director, Intrum Justitia Scotland explained why the award is of particular importance to Scottish businesses:

“Scotland has long enjoyed the fruits of a spirit of entrepreneurialism and in the face of economic change, this spirit has stayed strong. But the small or medium business faces particular challenges – not least the need to find a balance between inward investment and limited resources. With the vast majority of our businesses classified as small to medium, it is essential that we protect this entrepreneurial spirit by providing a supportive environment for tomorrow’s business people, helping them plan for long-term success and recognising that success when we see it.”

The Institute of Revenues Rating & Valuation (IRRV) had another successful conference this year and Stirling Park was on hand to join in the debate around various issues such as Shared Services, the Future of Local Government Finance, Valuation Issues, and the future of BIDS.

The conference and accompanying exhibition is a major event in the Scottish local government calendar and offers everyone with an interest in local government and related fields, the opportunity to debate key issues, listen to new ideas and make a contribution by expressing their opinions.

At the conference, John Swinney, Cabinet Secretary for Finance and Sustainable Growth, spoke about the new government’s policy on local taxation. Without consensus on the future of the council tax among the political parties, the SNP are currently in a period of ‘consultation’.

The UK Government will shortly announce the results of its Strategic Spending Review, which will set the budget for the Scottish Government for the next few years. If this money is less than expected, Mr Swinney may find himself with limited room for manoeuvre in his discussions with Scottish local authorities.

In the midst of such significant changes, IRRV delegates were offered the chance to unwind and relax over a friendly game of indoor golf! Stirling Park’s stand included a Nintendo Wii, with bottles of champagne on hand for the winners of a virtual tournament.