Category: Business

January 25, 2019

Late Payment by Big Business

Government statistics show that small businesses are owed on average £6,142 mostly by larger firms not paying them for goods and services on time. Bad practices range beyond simply paying late to include larger firms forcing a discount off an already agreed price, paying-to-stay (smaller companies pay larger firms to remain a supplier, but without the promise of any actual work) etc.

The research shows 37% small businesses have run into cash flow difficulties, 30% have been forced to use an overdraft and 20% cite a slowdown in profit growth. If all payments were made on time perhaps 50,000 more businesses could be kept open each year, whilst the UK economy would receive a £2.5 billion boost.

FSB is now campaigning for every large company to have a Non-Executive Director responsible for good supply chain practice – reporting to the Board as head of a sub-committee, reporting to the AGM, and writing in the Annual Report of what the company is doing to help their suppliers. The Government is listening, and has adopted this model for its own Departments

The new proposals, building on action government has already taken to improve access to finance and the appointment of the Small Business Commissioner, include:

the call for evidence to consider the best way company boards can put in place responsible payment practices throughout their supply chain, for example giving a non-executive director specific responsibilities for the company’s prompt payment performance, promoting innovative technologies, such as the latest accounting software, to help small firms manage their payments processes, and empowering trade bodies to highlight the best and worst practices in payment behaviour

The government has also set the ambition that all its departments commit to paying 90% of undisputed invoices from SMEs within 5 days and ensure all government departments have a dedicated non-executive director responsible for prompt payment, improving payment practices and exploring how better to use technology to make payment processes more efficient.

If you have seen the problems caused by such late payments – let us know, by email.

November 16, 2018

Europcar Pay Drivers £38 million Compensation

Europcar UK has been found guilty of systemically inflating the cost of repairs through secret rebates with suppliers. This is clearly defrauding unsuspecting drivers.

Europcar customers who fell victim to fraudulent charges for repairs on hire cars will receive compensation as the company has set aside £38 million to repay them.

Up to half a million drivers were fraudulently charged inflated prices for repairing scrapes and other damage and will be reimbursed by the company.

Leicester City Trading Standards is still investigating the car hire firm over their actions.

Europcar’s UK division made a pre-tax loss last year of $40.3 million after setting aside £47 million to deal with the investigation. In the previous year it made a profit of £13.1 million.

A Europcar spokesman has said that the company is undertaking a thorough investigation and Europcar UK is fully cooperating with the authorities”.

Well done whoever spotted the scam and it’s certainly cost Europcar a lot of money.

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October 30, 2017

The Business Email Money Transfer Scam

Your business administrator or accounting staff receive an email from the Chief Executive or Accounts Manager or a company Director asking for funds to be transferred immediately.

Maybe this is common practice in your company and you have procedures to make this safe, but otherwise it could well be a scam.

How the Scam Works

The scammer needs to know the name and email address of the Chief Executive. This is commonly available on the company website, Companies House records, press releases etc.
Next, the scammer needs to know the email address of someone in accounts at the company. They may phone and ask who to send bills to by email or again the information may well be on the company website. Sometimes they look for contact details for the Accounts boss.
Now they can send in an email addressed to the person in accounts and try to make it look as if it came from the CEO. The email will ask for money to be transferred to a new account and it must be done urgently.
If the company is unsuspecting then they may transfer the money as requested and only find out later that it was a scam.
The scammer will try to make the message look as if it’s from the Boss. Sometimes this is sophisticated spoofing so the message does really appear to be from the boss’s email address but usually the scammers aren’t that clever and simply put the name.
So the email will something like From: Fred Bloggs ([email protected]) where Fred Blogs is the name of the boss and [email protected] is the actual email address
The money is transferred as instructed but it goes to the scammer.

This scam has been widely publicised as some companies have lost a lot of money this way. But hopefully all companies now check on any such transfer rather than blindly following the email instruction.

Sometimes these scam messages are easy to spot.

e.g. a recent one addressed to fsmith @… looked valid but the email started with Dear Fsmith which gave the game away that it was computer generated and hence fake.

Another one contained the line “We need you to send £41,000 to a beneficiary today”.

The scammer uses words such as “beneficiary” to try to make it fit any circumstance but in practice this has the opposite effect as no commercial business calls its suppliers “beneficiaries”.

Most companies have a standard email format e.g. [firstname]_[lastname]@… Or [initial][surname]@… which can make it easier for scammers to guess email addresses once they know a few for the company.

Don’t make it easy for scammers and do have procedures in place to prevent this kind of scam.

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