News
12 June 2009
Construction companies - Don't fold when you can flourish
The number of County Court Judgments (CCJs) in the construction sector has shot up 55% over the past 12 months.
The downturn in the property market has undoubtedly affected most, if not all, construction firms. But now more than ever, firms need to closely monitor cash flow and ensure that as debts accrue they are collected expediently and any potential problems dealt with swiftly. Beswicks’ property litigation solicitor, Richard Simmonds, sheds more light on the perils facing the construction industry.
Data from business information and credit analyst CreditScorer showed that there were 14,329 CCJs in the construction sector in the 12 months to April 2009, with a total value of £86.6m.
The figure is far higher than the year to April 2008, when there were 9,234 CCJs in the sector, with a total value of £57.8m.
“No company wants a CCJ registered against it, but in an industry where the availability of credit is vital, firms need to be vigilant in managing debt and ensuring that CCJs are avoided wherever possible” explains Richard Simmonds. “CCJs are used as indicators of credit worthiness by credit rating agencies and in the current climate, a bad credit rating can mean that essential loan gets refused or perhaps more importantly, that overdraft gets recalled.”
A recent survey showed that just 2% of the construction firms asked were getting paid within 30 days. “This is simply unacceptable. With better credit management, firms can help mitigate the risk of debts accruing and reduce the amount they write-off as bad debt.”
If your firm is facing claims or has debts accruing it is best to act quickly and decisively to protect your position. Bringing sepcialist debt recovery solicitors, such as Beswicks, on board at the earliest opportunity will ensure you have the best chance of recovering what is owed to you.
“At Beswicks we help all manner of clients protect their businesses through effective credit management and liability exposure. Whether this be managing a client’s debts through our dedicated debt recovery service or bringing and defending claims in the county and high courts, we are on hand to take any and all action necessary.”
The options available to clients when they find themselves either owing, or being owed, money, are more than most believe so as soon as you find yourself in that position, why not contact one of the team and have a chat about what you can do.
If you would like to learn more about how Beswicks can help steer you through these difficult times, please contact Richard Simmonds on 01782 205000 who will be glad to assist.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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