Are credit reports damaging your business? Changes to regulations are affecting corporate credit scores. What can you do to improve your credit rating and win new business?

1. Are credit reports damaging your business? Ed Strang ROSS STRANG LIMITED www.businessfitnesscentre.co.uk @ netLinked Bishop’s Stortford ROSS STRANG LIMITED The Business Fitness Centre 1

2. Introduction I am Ed Strang, an experienced Chartered Accountant & former Finance Director of an international services company. I established ROSS STRANG LIMITED and started the Business Fitness Centre recently – a business advisory service dedicated to helping you and your business achieve success. In addition, to business strategy, finance and commercial advice we also specialise in credit management services. I joined a network of former senior directors, Stewart Enterprises Limited, with extensive business experience including unrivalled knowledge of the credit reporting industry. Together we have developed tools to help business owners and managers [and the accounting / audit profession] understand credit management and its impact on your business. We can help you to optimise the credit report for your business. Corporate Credit Report [also known as your “Business File”] There are over 2.6m limited companies in the UK. Each company has a Business File from incorporation, building up a history and credit profile. This is based on information filed at Companies House – including Memorandum & Articles of Association; forms confirming the appointment and resignation of directors, issue of shares & other legal notices, annual returns and annual accounts. Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 2

4. Suppliers

5. Other trading partnersDo you know what your credit report tells ALL interested parties? Good or Bad Credit Score? Is it accurate? Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 3

6. Who views your corporate credit report? Customers – Existing and New Suppliers Business Partners Banks Tenders Govt. Depts. Competitors Potential Acquirers ……………………………………………………….. and Criminals Why do they use credit reports? Risk management – credit exposure / track record / continuity of supply Compliance with corporate guidelines Planning, including acquisitions Again, Do you know what your credit report tells ALL interested parties? Good or Bad Credit Score? Is it accurate? Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 4

7. Does he understand your business? ROSS STRANG LIMITED The Business Fitness Centre 5

9. Business development

10. Tender competitiveness

11. Supplier pricing – reducing your competitiveness and margin

12. Bank credit rating & terms

14. Poor financial ratios ….. Fair - or unfair (to be explained)

15. County Court Judgements

16. Borrowings

17. Late filing accounts

18. Late filing annual returns

19. Payment history Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 6

22. The regulations have changed! Some would argue that the biggest losers are those who analyse the finished product to assess and protect themselves from commercial risk. Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 7

24. Then £1.2 Million

25. Then £2.4 Million

26. Then £4.6 Million

27. Now£6.5 Million (and less than 50 staff) SMALL?The volume of access by Credit Control, Business Development, Supply Chain Management, Local Authority, Non Govt. Organisations and Banks has increased dramatically - and will continue to do so - especially during tough trading conditions and a difficult lending environment. Over 10m searcheslast year! Your Credit Report and the way it being interpreted is more important to the future success of your business than it has ever been. Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 8

29. Gross Profit

30. Overheads

31. Dividends

32. Breakdown of Debtors

33. Breakdown of Creditors

35. Did your business make a profit (& pay a dividend) or make a loss?

36. Do you have short term obligations to meet ……. Or directorsloans, which will not be payable for over 12 months?Does this matter ………. Absolutely!! This changes the EXTERNAL image of your business!! Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 9

38. Our focus is on the conclusions they reach

39. Conclusions based on the accounts prepared for you business

40. And the knock-on effect these decisions will have on your business

41. Effects which can be far reaching

43. Others would argue those seeking to mitigate risk are the biggest losersArguably, it is the company being assessed that loses out! Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 10

45. Delayed or

47. 60 %

48. 40 %

49. 20%The most common rating (c60%) set by D&B , Equifax, Experian & Riskdisk is ZERO – Code Red Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 11

50. External Interest In Your Accounts Companies House reports in 2010 that 98.4% of all business files are accessed (viewed) within 60 (SIXTY) SECONDS of the new account information going public. Business Information Agencies (Like D&B , Equifax, Experian & Riskdisk) have electronic updates & normally have new accounts analysed and interpreted in a new report within 24 Hours. Companies that have an interest in your business will be alerted to the new assessment in the time it takes an electronic signal to reach them!! What will the next set of accounts produced for your business trigger? The impact of Stage 4 Effect can be devastating when credit limits and contract limits are withdrawn. Banks activate secured charges Banks call in overdrafts Trade suppliers put accounts on stop Insurers prohibit additional trade credit supply Deals in progress are lost Warning – Act Now Credit Limit Withdrawn Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 12

51. What can you do to improve your credit reports 1. Review the ever changing statutory accounting process from a Credit Management perspective, rather than an accounting perspective. 2. Business owners should treat the production of annual accounts as a managed process. Traditionally, they may not have the skills or knowledge, and few consider it important. Business owners quickly realise that this is more to do with revenue generation, winning business and facing fewer road blocks ahead. 3. Understand the information to be presented & opportunities to help credit analysts improve your credit score. This is often simple house-keeping, better transparency and might even be timing! A firm of Accountants in Ayrshire commented “I have been a CA in the UK & Canada for 40 years and have never considered these issues from the Credit Management perspective. It makes complete sense but you need to come at it from that angle. I think I am in shock.” This is not unusual! Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 13

53. Our clients can move forward without artificial obstacles in their way

54. Our clients enjoy improved revenue generation

55. Our clients can be confident on the impression gained by any would be enquirerNever heard of this ………? Ask your accountant, why they haven’t addressed this issue for your business! Don’t accept stock answers that “competitors will use this info….. “ or “it will cost a lot more.” I am happy to supply & discuss your latest credit report, without obligation. Call 07798 744106 now. Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 14

57. Be careful how you interpret credit reports on your customers, suppliers & other trading partners!

58. My experience – as a Finance & Commercial Director - shows that many credit reports are misleading. I spent precious time to get a better understanding of customers & suppliers ….. But many companies & govt. depts. will simply remove your business as a trading partner!!

59. We consider Credit Repair Companies who seek to remove negative information by unlawful means to be unethical. Don’t let misleading credit reports damage your business Are credit reports damaging your business? ROSS STRANG LIMITED The Business Fitness Centre 15

60. Credit Management Strategy from ROSS STRANG LIMITED The Business Fitness Centre 16