Credebt

A Message from Lord Pickles and Lord Blunkett, followed by Credebt's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Credebt is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett
Pickles signature Rt Hon The Lord Eric Pickles

www.credebt.co.uk

THE PARLIAMENTARY REVIEW
Highlighting best practice
THE PARLIAMENTARY REVIEW
Highlighting best practice
32 | CREDEBT
Managing Director
GlenMorgan
Glen Morgan established his own firm, Credebt, in
2009. He tells
The Parliamentary Review
that credit
management expertise is not just an advantage for his
team, but a necessity – every single team member at the firm
has at least 15 years’ credit management or invoice finance
experience. This, Glen says, is the reason his team can secure
results that others simply can’t. In the past 11 years, Credebt
has recovered over £300 million across 1,000 cases – and the
team hope this success will only continue.
Prior to establishing the business, I had worked in the credit management sector for
17 years. In the last ten years of this period, I was working at director level, assisting
international blue-chip companies to collect their debt. This required a rounded
solution: I would amalgamate teams, write new policy and greatly reduce the overdue
debt of the business.
In 2009, I decided I wanted to establish my own firm. Originally, we acted as a
consultancy, with our first project supporting a large company that was undergoing
a $12 billion acquisition of its biggest rival, but over time, we evolved into supporting
SMEs. Just as our market changed over time, so too did the services we offered.
Unfortunately, we were occasionally contracted at too late a stage to save a client’s
business, but we were subsequently retained by the insolvency practitioner to deal with
the collection of debts. The business quickly grew along these lines, with our focus
shifting to working with these insolvency firms. This largely involved maximising returns
to creditors and preparing the businesses to enter insolvency as smoothly as possible.
In more recent times, over the last four years, we also started to help many invoice
finance firms and the direction of the business has come full circle. Now, insolvency
practitioners and invoice finance companies refer us to their clients who are struggling
and task us with repairing the credit management of the business. We devise
credit policies, help them to improve their collections by taking over the process or
supporting them through it and help bring the business back to full functionality.
The business itself has expanded rapidly. In 2018, we achieved a turnover of
£907,000, with this projected to increase to £1.4 million in 2019 and £2 million by
the end of 2021. This financial expansion has been accompanied by a growth in our
staff, with our team expanding from six to ten in the last 18 months alone. As well as
our head office in Bristol, we have now opened two new regional offices.
Harnessing innovation to tackle cashflow issues
While working in one of my previous roles, I designed a debt collection and credit
control system, which has since been responsible for the collection of around
£5billion. In 2017, I started to look at how I could apply this system to the SME
market. Of the 1,000 cases plus we have worked on for SMEs, in 85 per cent of
cases the reason they were struggling was due to cashflow issues. Late payment is
AT A GLANCE
CREDEBT
»Managing Director:
GlenMorgan
»Established in 2009
»Based in Bristol
»Services: Assisting invoice
finance companies, insolvency
firms and their clients with
their cashflow
»No. of employees: 10
Credebt
BEST PRACTICE SPONSOR 2020
THE PARLIAMENTARY REVIEW
Highlighting best practice
32 | CREDEBT
Managing Director
GlenMorgan
Glen Morgan established his own firm, Credebt, in
2009. He tells
The Parliamentary Review
that credit
management expertise is not just an advantage for his
team, but a necessity – every single team member at the firm
has at least 15 years’ credit management or invoice finance
experience. This, Glen says, is the reason his team can secure
results that others simply can’t. In the past 11 years, Credebt
has recovered over £300 million across 1,000 cases – and the
team hope this success will only continue.
Prior to establishing the business, I had worked in the credit management sector for
17 years. In the last ten years of this period, I was working at director level, assisting
international blue-chip companies to collect their debt. This required a rounded
solution: I would amalgamate teams, write new policy and greatly reduce the overdue
debt of the business.
In 2009, I decided I wanted to establish my own firm. Originally, we acted as a
consultancy, with our first project supporting a large company that was undergoing
a $12 billion acquisition of its biggest rival, but over time, we evolved into supporting
SMEs. Just as our market changed over time, so too did the services we offered.
Unfortunately, we were occasionally contracted at too late a stage to save a client’s
business, but we were subsequently retained by the insolvency practitioner to deal with
the collection of debts. The business quickly grew along these lines, with our focus
shifting to working with these insolvency firms. This largely involved maximising returns
to creditors and preparing the businesses to enter insolvency as smoothly as possible.
In more recent times, over the last four years, we also started to help many invoice
finance firms and the direction of the business has come full circle. Now, insolvency
practitioners and invoice finance companies refer us to their clients who are struggling
and task us with repairing the credit management of the business. We devise
credit policies, help them to improve their collections by taking over the process or
supporting them through it and help bring the business back to full functionality.
The business itself has expanded rapidly. In 2018, we achieved a turnover of
£907,000, with this projected to increase to £1.4 million in 2019 and £2 million by
the end of 2021. This financial expansion has been accompanied by a growth in our
staff, with our team expanding from six to ten in the last 18 months alone. As well as
our head office in Bristol, we have now opened two new regional offices.
Harnessing innovation to tackle cashflow issues
While working in one of my previous roles, I designed a debt collection and credit
control system, which has since been responsible for the collection of around
£5billion. In 2017, I started to look at how I could apply this system to the SME
market. Of the 1,000 cases plus we have worked on for SMEs, in 85 per cent of
cases the reason they were struggling was due to cashflow issues. Late payment is
AT A GLANCE
CREDEBT
»Managing Director:
GlenMorgan
»Established in 2009
»Based in Bristol
»Services: Assisting invoice
finance companies, insolvency
firms and their clients with
their cashflow
»No. of employees: 10
Credebt
33CREDEBT |
FINANCIAL SERVICES
one of the most pressing issues facing
the market at the moment, something
which has been recognised by the
government through its appointment of
the Small Business Commissioner.
Historically, the only way to deal with
this issue was to go to debt collection
agencies, who can charge ten to 15
per cent. We wanted to solve this
problem and provide a cost-effective
and automated solution that could help
SMEs to receive full payment on time.
We have partnered with a developer to
create an app to complete this function,
which is due to be launched in October
2019. This app is designed to work
for all SME businesses with a turnover
of up to £25 million and will help to
revolutionise this area of the market
and the way SMEs collect debt.
The need for legislation
Although technology can help to
tackle this issue, I believe legislation
is needed. When the Small Business
Commissioner was first appointed, the
position was not vested with sufficient
power to enact real change. They have
tried to improve practice more generally
but sooner or later, they will realise
significant change is required. Larger
penalties are required for late payment.
The Chartered Institute of Credit
Management has devised a payment
code whereby businesses are struck off
from if they pay late. This means these
companies would be unable to pitch for
government contracts over £5 million.
In my view, this doesn’t go far enough.
Beyond financial implications, late
payment can have a severe effect on the
mental health of those involved. Leading
to increasing anxiety and inflated levels of
stress, the mental and emotional impact
of late payments must be considered
alongside their economic effect.
Because of this, legislation should
go beyond late payment to create
guidelines for the initial payment periods
themselves. I believe blanket maximum
payment terms should be imposed to
ensure a decreased risk of late payment
and help reduce the levels of anxiety
and stress that this may cause.
In addition, the credit and debt
collection sector is profoundly affected
by political instability, particularly
elections. Investment and recruitment
decisions are often postponed whenever
there is an election and this stasis can
result in companies entering insolvency.
It is essential that MPs and politicians
across the political spectrum realise the
effect that elections, and wider political
instability, can have on the business
environment, especially among SMEs.
Another key issue Credebt faces is
the struggle to get onto bank panels.
Several firms have sat on these panels
for many years and, as a relatively
new organisation, we struggle to get
the recognition we deserve. As we
look to the future, this will be a major
priority of ours. We are also targeting
the evolution of our processes to meet
the needs of the industry, something
particularly important as these processes
have become increasingly difficult since
the last recession.
We are hiring new recruits to cover
London and the South East and
our plan is to continue our growth.
With the development of our app,
“itsettled”, and the expansion of our
workforce, I am confident we can
continue to work towards our ultimate
goal: helping as many businesses as
possible to maximise their cashflow.
Most of the Credebt
team
With the
development of
our app,
“itsettled”, and
the expansion
of our
workforce, I am
confident we
can continue to
work towards
our ultimate
goal: helping as
many businesses
as possible to
maximise their
cashflow

www.credebt.co.uk

This article was sponsored by Credebt. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from Rt Hon Elizabeth Truss.

Rt Hon Elizabeth Truss's Foreword For The Parliamentary Review

By Rt Hon Elizabeth Truss

Even by the standards of the day –this has been one of the most exciting and unpredictable years in British politics.

The leadership election we’ve just seen marks a huge moment in our country’s history. This government is taking a decisive new direction, embracing the opportunities of Brexit and preparing our country to flourish outside the EU.

As international trade secretary, I’ll be driving forward work on the free trade agreements that are going to be a priority for the government. Free trade isn’t just an abstract concept bandied around by technocrats. It is crucial for a strong economy and for the ability of families to make ends meet. Free trade benefits people in every part of our country, as British firms export to new markets and people doing the weekly shop have access to a wider choice of goods at lower prices.

The essence of free trade is in the title: freedom. It’s about giving people the power to exchange their goods without heavy government taxation or interference. Commerce and free exchange are the engine room of prosperity and social mobility. I’m determined to tackle the forces who want to hold that back.

One of my priorities is agreeing an exciting new free trade deal with the US, building on the great relationship between our two countries and the Prime Minister and US President. But I’ll also be talking to other partners including New Zealand, Australia and fast-growing Asian markets.

And with the EU too, we want a friendly and constructive relationship, as constitutional equals, and as friends and partners in facing the challenges that lie ahead – a relationship based on a deep free trade agreement. Our country produces some of the world’s most successful exports, and the opportunity to bring these to the rest of the world should make us all excited about the future. It is this excitement, optimism and ambition which I believe will come to define this government.

For too long now, we have been told Britain isn’t big or important enough to survive outside the EU – that we have to accept a deal that reflects our reduced circumstances. I say that’s rubbish. With the right policies in place, we can be the most competitive, free-thinking, prosperous nation on Earth exporting to the world and leading in new developments like AI. To do that, we’ll give the brilliant next generation of entrepreneurs the tools they need to succeed. Since 2015, there has been a staggering 85 per cent rise in the number of businesses set up by 18 to 24 year olds – twice the level set up by the same age group in France and Germany. We’ll help them flourish by championing enterprise, cutting taxes and making regulation flexible and responsive to their needs.

As we do that, we’ll level up and unite all parts of the UK with great transport links, fibre broadband in every home and proper school funding, so everyone shares in our country’s success.

2019 has been the year of brewing economic and political revolution. 2020 will be the year when a revitalised Conservative government turbo charges the economy, boosts prospects for people across the country, and catapults Britain back to the forefront of the world stage.



Rt Hon Elizabeth Truss
Secretary of State for International Development