Cloud accounting integrations come to CreditHQ

We’re excited to have rolled out a new feature within CreditHQ, connecting data from a business’ accounting software with our credit data in order to analyse financial risk and suggested courses of action in order to get paid sooner.

In Beta Testing with a selected group of CreditHQ users is our integration with Xero, one of the world’s largest cloud accounting services.

CreditHQ’s cloud accounting integration brings invoice information and credit data on companies together to support small businesses make decisions on what action will reduce business risk and improve cash flow.

“Our aim is to support small businesses in making informed business decisions, so the integration of accounting data enables CreditHQ’s insight engine to make more tailored suggestions to reduce debt and its inbuilt tools to focus the limited administration time a business has into the areas that will have the biggest impact upon business performance” says Robert Drury, Head of Product at Ormsby Street, the company behind CreditHQ. 

Subscribers can link their CreditHQ and online accounting packages to ensure that the financial situation of all their customers is monitored.

Companies that a business trades with can be matched to credit reports and have their credit and payment performance monitored, ensuring the business is aware of the latest finances of companies whose performance can affect their own.

A risk profile will indicate how much outstanding invoicing sits with high-risk businesses, highlighting which customers need chasing for payment and which need their credit terms adjusting.

The import of accounts receivable data will enable CreditHQ to analyse the invoices are at the greatest risk of non-payment and prompt businesses to take action in the areas that will have the largest impact.

Christmas is just around the corner, so get those invoices raised now

We’ve all heard it before – ‘Cashflow is the lifeblood of any business” and it’s true, so we should do everything we can to ensure the money keeps coming, however we’re soon to be entering the season when a Christmas is going to get in the way.

Many businesses will shut down for the festive period, which means your customers won’t be paying any of their bills. In the meantime, you’ll need to be paying your employees holiday pay and not getting in any more new business as your team open presents and drink sherry, so cashflow becomes doubly important as you need to bring in the cash before the Christmas shutdown begins.

There are however a few simple things you can do in order to make this a pain free period:

• Invoice as soon as you can – if you want your invoices paying before Christmas then work out when you need to send them by taking your payment terms and the last Christmas post into account. If it arrives on the accounts payable desk too close to Christmas it might get put on the ‘next year’ pile
• Ask for payments before they become due – don’t wait until an invoice becomes due before chasing it, instead contact your customers as soon as an invoice looks like it might become due to get it processed before the office parties and mince pies
• Keep your spending under control – if there’s a chance you might not get all your income received before Christmas then keep an eye on your spending so your cashflow can cope, even if it means a New Year party rather than a Christmas party

Invoice early in holiday season or you’ll get burned

Most small business owners get told that it doesn’t matter if they have a good idea or great service but what really matters is that they have an effective cash flow or else they won’t survive. And it’s true, cash flow is the lifeblood of any business, and as such we should do everything we can to ensure the flow keeps flowing.  However we’re soon to be entering the season when folks disappear off to the seaside which means they aren’t signing off invoices. It’s holiday season!

Many businesses will have reduced staffing levels during the holiday period, which means your customers won’t be paying any of their bills. In the meantime, you’ll need to be paying your employees holiday pay and not getting in any more new business as your team also head off to get a tan.

There are however a few simple things you can do in order to make this a pain free period:

• Invoice early – if you want your invoices paying before the holidays kicks in then get them out now. If it arrives on the accounts payable desk too close to flight departure time then it might not get addressed until they come back
• Chase debt – don’t wait until an invoice becomes due before chasing it, instead contact your customers as soon as an invoice looks like it might become due to get it processed before the sandcastles and camping hits
• Spend carefully – if there’s a chance you might not get all your income received before the holidays then keep an eye on your spending so your cashflow can cope, even if it means delaying the work summer social until September

But don’t forget to take a break yourself!  Everyone needs a holiday!

Late payments threaten to derail the freelance industry

UK freelancers are increasingly struggling with late invoice payments, with around half admitting they have considered quitting life as a freelancer because of worries over continued late payment, and 46% stressing about having enough cash to live on.

Our latest research here at Ormsby Street, also reveals that one in ten freelancers have faced difficulties paying their mortgage or rent because of late invoice payment, and many have turned to family (37%) or even payday loans companies (36%) to cover a shortfall brought about by late payment.

While a fortunate 19% of respondents say most of their invoices are always paid on time, a freelancer’s invoices are paid on average 18 and a half days after their due date. At any one time, a freelancer in the UK is owed on average £5,431.03 in late payments and 79% of freelancers say that cash-flow is the number one concern for their business.

“Every freelancer knows that late invoice payment is one of the biggest frustrations, impacting cash-flow and causing much stress, from paying the mortgage to having enough money to live on,” said Martin Campbell, Managing Director, Ormsby Street. “For a freelancer to be owed more than £5,000 is clearly unacceptable and threatens the emerging freelance economy in the UK, which brings flexibility and work / life balance to so many.” 

The Office for National Statistics revealed in 2015 that 4.55 million Britons are now their own boss and research by the Association of Independent Professionals and the Self-Employed (IPSE) found three in five businesses agree that it would be difficult to operate without hiring freelancers. The Ormsby Street survey of 1,002 freelancers and sole-traders, revealed that 40% of respondents have taken out a County Court Judgement (CCJ) in the last year to chase a bad debt, and more than half say that late invoice payment is getting worse not better.

It remains a problem for many freelancers when it comes to chasing clients over late payment, partly because they do not have the time to spare, but also because of fears this might impact future work with that company.  57% of respondents say they worry that if they chase for payment that client might not use their services again, while two-thirds say they feel uncomfortable and awkward chasing clients for late payment.

“Why should a freelancer waste their own billable hours chasing payment for work that has been successfully completed and is already due for payment,” continued Martin Campbell. “If customers are not willing to pay within the agreed terms then it’s time for freelancers to become more informed over whom they work with, and either ask for payment upfront or even choose to not work with company.”

Special Freelancer rate!

With 49% of freelancers having had to turn down a contract because of concerns over a client’s ability / willingness to pay on time, we’re offering access to CreditHQ for the special freelancer rate of £12.50 for the standard subscription; allowing freelancers to obtain financial insight into every company they trade with. Sign up here to take advantage of this offer

“Freelancing has grown in popularity because of the choice and flexibility it gives people over their career, but its success relies on the prompt payment of invoices, which is not happening enough,” concluded Martin Campbell. “Credit-checking potential customers and partners is straightforward to do and should be done by a freelancer every time they work with someone, to protect themselves against late payment.”

About the research

An online survey of 1,003 freelancers and sole-traders was undertaken by TLF Research in March and April 2016.

CreditHQ, the credit-checking tool built by Ormsby Street, collates credit and trade information from Companies House, Experian and Dun & Bradstreet and presents that information in simple-to-understand credit and payment indicators, so a freelancer can assess which businesses are likely to pay them on time, or after 30 or more days.

Formed in 2014 to take over the operation of the financial data proposition of BCSG, Ormsby Street is developing the next generation of financial data services for small businesses. Its team of high-performing product innovators and software engineers are quietly taking sophisticated financial information and turning it into a next-generation digital tool to help businesses make good decisions about customers, suppliers and themselves.

CreditHQ now available in Germany

German small businesses now able to use award-winning credit-checking tool, CreditHQ

CreditHQ is now available in Germany, as part of a new partnership with one of Germany’s biggest banks.

CreditHQ allows a small business to check the financial health and credit status of any customer or partner and will be available to the small business customers of its German partner bank. Its German launch is the next stage of an ambitious international expansion programme that will look to target Poland, the US, Australia and other European markets over the next 12 months. 

More than 4 million German enterprises are classified as small and medium-sized enterprises, accounting for 99.6% of the total number of enterprises. German SMEs generated an annual turnover of approx. € 2,149 bn in 2012, which representing 35.3% of the total turnover of German enterprises.

“Despite new regulations brought in to combat late payment culture in July 2014, late payment remains a major issue for German small businesses, impacting on cash-flow and the ability to grow,” said Martin Campbell, MD, Ormsby Street. “There is a growing need in Germany for an easy way of checking the credit status and payment performance of customers and CreditHQ meets that requirement head-on. Partnering with a bank in Germany is a great way of bringing CreditHQ to the German market and we are confident it will mirror our success in the UK.”

CreditHQ is working with credit supplier, Burgel and will allow small businesses to check the credit status, payment performance and general financial health of millions of German small businesses. The simple traffic light ratings system shows clearly the level of risk associated with the company in question, and users are given two different ratings, one addressing credit risk and the other payment performance.

CreditHQ is used by more than 27,000 UK small businesses, and launched in Italy in 2015. Ormsby Street has just returned from the SXSW event in Austin, Texas, where it was representing UKTI as a UK Tech Ambassador and seeking new partnerships with US banks to further expansion into the US market.   

“Late payment is a problem for small businesses all over the world and the next 12 months will see us launch in at least another four countries,” continued Martin Campbell. “It is impossible to force someone to pay on time, so small businesses have to protect themselves against late payment as best they can. CreditHQ’s use of big data to address that problem gives small businesses the insight and power to do just that, and is suited to almost any territory in the world.”

About Ormsby Street

CreditHQ is built by Ormsby Street, a Software-as-a-Service business based in Old Street, London. Formed in 2014 to take over the operation of the financial data proposition of BCSG, Ormsby Street is developing the next generation of financial data services for small businesses. Its team of high-performing product innovators and software engineers are quietly taking sophisticated financial information and turning it into a next-generation digital tool to help businesses make good decisions about customers, suppliers and themselves.

An Egg-cellent offer this Easter week!

The long weekend might be over, but we’re extending our Easter special offer – Access CreditHQ FREE for one month!

Now we’ve hit the second quarter of the year, it’s a great chance to reflect on the first few months of the year and review the businesses with whom you’re trading.

Are your suppliers paying you on time? Might it be time to increase or reduce the amount of credit you’re extending to a particular business? Has your business’ credit and payment score improved and you’d like to show potential customers this?

CreditHQ can help improve your cash-flow and credit management, and ensure you’re working with the companies that are best for your business. If you know you want to work with a particular business but know in advance that they’re not likely to pay you until 45 days, you can plan accordingly and make sure you’ve got enough cash in the meantime for other purposes.

So this Easter, we’re offering you access to CreditHQ’s Standard subscription free of charge for one month! Simply enter the code EASTERHQ16 in the voucher code box*.

You’ll need to enter your card details, but don’t worry –  we won’t charge you a penny for 30 days (and if you find you’re not using CreditHQ, simply cancel anytime within the first month to avoid the £25 monthly subscription fee).

So hop to www.credithq.co.uk and start checking out the best businesses you should be working with!

*voucher code valid until 30 April.

3 lessons I’ve learnt from 20 years in Small Business

It would be easy to think – amid today’s hype about digital products and Software as a Service’s disruption of so many industries by startups – that the business world has changed a lot over the 20 years that have elapsed since I penned my first proposal in response to the tentative phone call: “We’ve heard about the world wide web and we think we need one, can you help?” With so much ink spilled over what’s changed over those two decades, I’m surprised at how often I’m reminded of how much has stayed the same. Over my time as a small business leader, there have been three lessons which I learned early, but then had to learn again and again. I set them out here to remind you too.

Lesson 1: The customer isn’t buying your product or service. In startup circles it’s very fashionable to talk about how the customer is paying to solve a problem, but that’s not what I’m talking about here. There are so many ways a customer could solve a given problem, that when they choose to do so by buying your solution, it’s crucial to understand why. It’s almost certain that your product or service wasn’t the only option, so what made them buy from you? Was it the safety and security they get from your reputation, or was it the reputation for innovation that they get from buying “the next big thing”? Are they really buying the product? Or are they trialling it for one of their departments should the rest of the organisation go a different way? Getting to the heart of why customers buy from you is absolutely essential for effective selling.

Lesson 2: You’re not selling your product or service. Depending on how you pitch and deliver your product, you might be selling the promise of repeating the experience that another customer had, or you might be selling something that you are confident you can deliver but that’s not 100 per cent rock solid yet. Or maybe you’re selling the value that you built on the foundations provided by someone else. Whichever it is, your business success depends on understanding how your view matches (or doesn’t match) your customers’, and how your business really works.

Lesson 3: Business relationships are complicated. It’s easy as a small business to work simply: we provide a service, you buy a service, the service gets delivered, the bill gets paid. If you’re selling buns in a market, you might just have a business which is that simple (though it’s not as simple as it sounds!), but if you’re selling to businesses, then it’s more likely that your customer needs your product for a number of reasons, and has various individuals with different political outlooks and different objectives. Your own team will also have various strengths, weaknesses and disagreements about how best to deliver, though various factors can change, like the economy, circumstances and requirements from your relationships. On top of this, your customer’s finance department may seem to be working to some sort of 19^th century timetable, where they have until next harvest to pay your bill!

So how do you learn the lessons?

Clear brands, product descriptions and contracts are hard work to create, but worth every penny because your customers can understand you better.

Clear internal procedures and industry standard roles help your team to move fast and do the right thing even when the unexpected happens (come on – you know it will!).

Finally, trust that everything’s going to be OK, and then make sure that it is – monitor your customers’ credit scores and payment performances and don’t accept any excuses for late payment!

by Martin Campbell

What are business credit events?

As part of a Credit Reference Agency’s determination of a credit score, they receive information relating to what they term ‘detrimental’ information.

This includes things such as County Court Judgements (CCJs), mortgages and legal events such as administration, receivership, or insolvency, all of which would indicate an increase in financial risk to the business.

At CreditHQ, we highlight these events to help businesses understand the potential risks in trading with other businesses.

If you know that a company has encountered payment issues that have resulted in legal action, then you are able to make decisions on whether to offer credit or to request up front payment, or whether you should be chasing outstanding debt now before a company’s situation worsens.

Sign up here to see the credit events for businesses you’re trading with, and get to understand your customers.

What is a business payment score?

As part of a Credit Reference Agency’s determination of a credit score, they receive millions of trade payment experiences on a monthly basis from companies operating in a broad variety of commercial sectors in order to analyse the payment performance of companies.

Changes in payment performance constitutes one of the earliest signals of possible financial difficulty and understanding the payment performance of a company will give you an indication as to when a company will pay it’s bills.

At CreditHQ, we convert payment scores from Credit Reference Agencies into a payment indicator which uses 1-10 scores and colours to indicate high (red), medium (orange), or low (green) risk of late payment.

If you know the likelihood of a company paying on time then you are able to make decisions on when to chase debt and adjust your cashflow projections to reflect real-world information rather than standard payment terms.

What is a business credit score?

Businesses get credit scores, just like individuals, which show whether they are a good risk to give credit to. As with individual credit scores, these are calculated by Credit Reference Agencies, and they are based upon factors such as historical payment performance, public record information, company filing history, and comparative data within a company’s industry.

Businesses with a good credit score are at a lower risk of defaulting on any payments they are due to make, whereas those with a lower credit score carry a higher risk of defaulting on payments.

For businesses it isn’t an indicator as to whether you should trade with them or not, but rather an indicator as to HOW you should trade with them, with the basic premise being that you take steps to reduce financial risk to your business if trading with companies that have a low credit score.

You can do this by not extending credit to them, asking for payments up front, or reducing payment periods to just a few days rather than a month or more, with the aim being get paid sooner, in case they encounter financial difficulties.

At CreditHQ, we convert this credit score into a credit indicator which uses 1-10 scores and colours to indicate high (red), medium (orange), or low (green) risk.

If you know the level of risk then you are able to make decisions on when to chase debt, what credit terms you can offer this company, or how you can adjust should this company cease trading.

Sign up free to get started and find out how the companies you’re trading with are doing.