If businesses in Cambodia can pay on time why can’t businesses in Cambridge?

Back in February we set up a loan scheme with the international development agency Lend With Care in order to support the growth of businesses around the world.

Our loan was shared amongst four entrepreneurs in Vietnam and Cambodia and was used to purchase animals for rearing, obtain more land for farming, and set up a energy efficient plant for household gas.

So far 17% of our total loan has been paid back, and all of it on time, and no payments have been missed.

LendWithCare Payments

If only this schedule of payments could be met by all the other businesses we trade with.

In the UK the standard length of payment terms (i.e. the  time a business has between when an invoice is raised and when it is due to be paid) is 30 days, however, the average time it takes a small business to get paid is 71 days!

This delay between expected and actual payment causes immense problems for business owners who need to pay salaries, replenish stock, or plan for growth.  For those who can’t fund this cashflow gap through additional loans, overdrafts, or invoice financing face real survival dilemmas.

Some recent research we have undertaken with freelance workers has shown that they face the same problem and 36% of them have even turned to payday loans to overcome the problem.

But it doesn’t have to be like that.  If farmers in Cambodia can make their payments on time, why can’t businesses in Canterbury, Colchester, and Cambridge?

At CreditHQ we believe that people should pay what’s due when it’s due, and that’s why our products tell you which businesses pay on time and which don’t, so our customers can make decisions on who they should trust their own livelihood with.

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.

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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.

Ormsby Street selected to present at Finovate Spring

We’re heading off to San Jose next week, as we’ve been selected to present CreditHQ at the prestigious Finovate Spring event in San Jose.

Finovate Spring is a demo-based conference for innovative startups and established companies in the fields of banking and financial technology. Held in San Jose, California, the event offers an insight-packed glimpse into the future of money via a fast-paced, intimate, and unique format.

Finovate Spring

FinovateSpring is a conference on steroids and a great opportunity to see new technologies and upcoming companies changing the world of financial technology.  Victor Smilgys, Keypoint CU

Competition is fierce to appear at this event, with around 70 companies from the financial technology sector showcasing new products or technology over the course of two days – both on stage and on their company stands to an audience of over 1500; including investors, VCs, entrepreneurs, expert analysts and influential press.

Our CEO and co-founder, Martin Campbell, will be presenting some great new features of CreditHQ, including our new bookkeeping integration. Of the integration, Martin said:

When connected to Xero, CreditHQ, like a good financial controller, monitors every customer and every invoice the company has.  Unlike a financial controller, it has access to real-time credit scoring and payment performance information from multiple sources as well as insight into thousands of other small businesses using the product to chase invoices and recover debts.

Combining these data sources and feedback from tens of thousands of users using a patent-pending data-driven approach, the next generation Insight Engine is able to identify cash flow problems and credit risks for your business and highlight the most effective way to resolve them, and present a prioritized action plan to the business leader who can then simply approve the actions that the insight engine has planned.  

As well as highlighting actions for our own customers, our bank partners who provide the product to their SME customers, also gain insight to help them target the right products and support at small businesses customers they historically have very little data about.”

If you’re heading to Finovate, please come and say hi and let us show you how CreditHQ can help all small businesses combat the problem of late payments and focus on growth and success. For 20% off your ticket(s), use code: OrmsbyStreetCompFS16

We’ve been nominated for a Benzinga Award!

Ormsby Street have been chosen as a finalist for this year’s Benzinga Awards – in the ‘leveling the playing field’ category

bzawards-finalists-2016-official

The Benzinga Awards (BZ), is a competition to showcase the companies with the most impressive technology, who are paving the future in financial services and capital markets.

Last year’s winners include HedgecoVest who were the overall winner, with Estimize taking first place for best startup.

If you’d like to join in the celebrations in New York on May 24th, click here for full information and details of how to grab your ticket.

Good luck to all the other finalists!

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.

What UK FinTech can learn from SXSW 2016

I’ve recently been at this year’s South by South West (SXSW), or ‘south by’ as it is referred to by the locals.

Although popularly known as one of the world’s largest music and film festivals, it also brings together technologists, entrepreneurs, creatives and marketers at SXSW Interactive.

My company, FinTech startup Ormsby Street, was selected to attend SXSW by UKTI as one of its Tech Ambassadors.

London’s rise to its current position as one of the main global FinTech hubs over the past years or so, has been well-documented, yet for all the undoubted successes, there is still much to learn. The bigger FinTech startups still in the main originate from the US, so what is done differently in the US to the UK and what can UK FinTech startups learn from their US counterparts on show at SXSW?

FinTech at SXSW

This was the second year we have been at SXSW, and I noticed a small but dedicated focus on FinTech compared to 2015. FinTech was everywhere this year. I attended the ‘Payment and Fintech’ section of the SXSW Startup Accelerator, which saw Chroma, a ‘new stock market for the small business economy’ win and also a similar event focused on ‘Banking and Fintech’.

A lot of FinTech solutions are focussing on moving money around – be that through novel payment systems using mobiles or the web, or international transfers. This is prime territory for innovation and an area where banks lag behind what technology can achieve because they’re using older systems.

The other area where banking is out of whack with society, is in that of trust – this was a major theme across SXSW. Trust is the real currency of banking, but the standards and the processes that banks use are very different from those that we use in the rest of our lives. For most purposes, your phone number or your social media account are enough to identify you, but for good reason this isn’t the case in banking and so innovators are trying to find a middle way on this debate between security and convenience.

Security vs Convenience

This debate was happening all across SXSW and was one of the one themes in Barack Obama’s keynote speech. I was lucky enough to get my name pulled out of the hat to attend this, and while the President didn’t comment on the current FBI and Apple case directly, he did put forward the argument that authorities need access to data on electronic devices because the ‘dangers are real’.

He outlined his commitment to strong encryption but also discussed how smartphones and other electronic devices are designed as such that data on them is permanently locked away. What are the implications if authorities are looking to catch child pornographers or disrupt terrorist plots? Weighty issues, but the challenge of balancing encryption, security and convenience is one that almost every FinTech startup must address at some stage in their development, and it’s no doubt out of concern for its own recent startup: “Apple Pay” that Apple is making a big deal of this issue.

Products, not companies

FinTech remains a really hot topic because the experience we all have with personal banking and with business finance – paper forms, signatures and face to face conversations – is all rooted in the age of paper and therefore ripe for innovation.

Yet much of the innovation at SXSW has been around product, not the companies behind them. Most of the big business here (and there is a lot) is looking for a product that will address a gap in their own offering, rather than looking to acquire a company which would remain in any way self contained.

What this means for the FinTech startups involved, is that they must make something that truly disrupts and they must be open to collaboration and partnerships with multiple big businesses at an early stage. If a new FinTech product is only of moderate convenience, then its days will be numbered before it’s snapped up by one bank or another, and while a acquisition may be the end goal for many FinTech startups, only those who can forge partnerships with multiple major banks are likely to find the route to longer term independent growth.

Finally, something that became clear from a number of sources across SXSW, is that FinTech startups face a tougher regulatory battle than those in other sectors. Every startup should plan to scale from the moment they launch, but anyone doing so in such a highly regulated market such as FinTech needs to be certain of what they doing – get it wrong and the entire business can stall.