It is with great sadness that we announce that Martin Williams has sadly passed away.

Accountancy Age staff would like to extend their deepest sympathies to Martin's family his friends and his colleagues at Graydon.

Our story on Martin is here.

THE LACK of sales activity in Britain's stores seems to be having a negative impact on levels of production in UK factories, denting hopes of an economic recovery.

News from the latest Purchasing Managers Index out today records that the index has fallen sharply to 52.1 from April's figure of 54.4.

Forecasters were pessimistically looking for a figure of 54.2 in May, so the results were worse than anticipated. Consumer goods producers were particularly bleak with their outlooks, but no wonder given the obvious reticence of punters in our high streets to part with their money.

Over the last few weeks, we've seen countless retailers hatching survival plans that in many cases will involve a number of shop closures. HMV, Mothercare and JJB Sports are just a few examples, whilst other groups have fallen by the wayside. (Oddbins and Focus DIY are two that couldn't avoid administration).

Deloitte recently produced figures showing that retail insolvencies rose by 30% in quarter 1 of 2011.

I'm in no doubt that the financial trouble on Britain's high streets will actually get worse before it gets better. I can only hope too that the service industries and manufacturing sector can pick up in the short term to help keep UK GDP in positive territory.

MORE RESEARCH has come to my attention from BDRC Continental on behalf of BACS, saying that SMEs continue to suffer from slow-paying bigger clients - average wait time - 39 days beyond terms.

There's nothing particularly earth-shattering about this news, although the research does pick up a big improvement in how public bodies pay their bills, while 33% point the finger clearly at larger private limited companies for being the worst offenders.

Slow payments of trade debts is an age old problem for SMEs, but in a "dog eat dog" world, will bigger private organisations ever decide to forgo the obvious financial advantages of holding on to money that effectively isn't theirs ? I doubt it very much.

Legislation is in place that allows businesses to claim statutory interest on overdues, but SMEs are generally too frightened to use it in case they aggravate their customers.

No-one is going to change business culture overnight, but SMEs can help improve their cash flow situations by taking direct action themselves.

Firstly, SMEs must ensure they state their payment terms on credit application forms and invoices.

They should always ask a customer whether they will need to quote a purchase order on any invoice submitted. Before any due date, but after delivery of the goods or services being invoiced for, make sure the client is happy with what they received. This phone call will eliminate the possibility of the client using the stalling tactic of blaming non-payment of an invoice on a product/service quality issue.

There are hundreds of tips one can give to SMEs. Perhaps readers of this blog can add a few more to my short list

THE EU parliament's 2010 proposal to exempt micro businesses with under €1m (£880,000) turnover from filing accounts at official registries is still being contested, it seems, at EU Council level.

Only when the Council, under Hungarian Presidency since January this year, ratifies the directive by gaining 255 Council votes out of a possible 345, can member state governments start to implement law changes in their own territories.

According to my European sources, there is a sizeable blocking group at the present time headed by France, Italy and Belgium, meaning that the main proponents (Germany and the UK) are well short of their 255 target.

In order to achieve consensus, apparently, a watered down version of the directive (only companies with less than €500,000 turnover would be exempt from statutory filing), is being discussed at council level but a positive outcome is still awaited.

I'm not surprised at all that Germany is leading the charge for less financial transparency in Europe. For many years, the German authorities penalised GmbH companies that flouted statutory filing law by such paltry sums that very few balance sheets ever existed at official registries.

The Germans seem to be returning to their long held conservative position of "keep companies' financial positions well under wraps" . As for the British Government's position - well, it simply baffles me!

For many decades, the UK prided itself on having one the best companies registries in the world, containing a wealth of financial and other statutory information that helped facilitate trade between buyers and sellers on open credit terms.

Now, UK ministers seem happy to push for a degraded registry unworthy of its name and tradition. And all because they think non-filing of accounts will save micro businesses time and money; thinking that in my opinion is totally flawed.

I take some comfort from knowing that there are politicians in other parts of Europe who seem to be agreeing with me!

A BIG SIGH of relief all round this morning as the UK's GDP growth figures for Q1 2011 show us back in positive territory - albeit a tentative 0.5%. So, we've managed to avert a double-dip recession, but will still find it difficult for some time to come to raise ourselves above a bumpy ride along the bottom.

In these situations when good economic news is followed by bad, and then round and round it goes, it's no wonder that the general populace is wary about the future, and therefore worried about spending.

That is why the retail and leisure sectors find circumstances difficult to trade in, particularly when incoming revenue doesn't generate enough cash to pay debts when they become due.

Last week, I read that Von Essen Hotels Ltd, owners of some very swanky castle-type hotels went into administration after defaulting on debt repayments to their main bankers.

The Von Essen holding company has some very attractive trophy assets in its portfolio, so even though the debt mountain is as high as £250m, banks should find a way of getting their money out.

Other unsecured trade creditors may not be so lucky, but then they would have weighed up the credit risk when supplying a highly-leveraged hotel group like this during tough economic conditions, right?

VINCE CABLE'S PROPOSALS to raise audit thresholds and abolish statutory accounts filing for microbusinesses have certainly provoked plenty of reaction. Philip King, CEO of the Institute of Credit Management, went so far as saying they displayed "naivity verging on madness"!

I've got to say I support the government wholeheartedly in its attempt to reduce so called red tape from the lives of small business owners and directors, but as I've said before in my Risky Business blog, helping SMEs cut back on management time spent on financial disciplines and controls doesn't seem sensible or desirable to me.

For the last twenty years or so, I have been a board director of Graydon, a "medium sized company" that would be impacted by Cable's recent proposals. Personally, I very much appreciated the work done by my finance dept in producing comprehensive management accounts each month and credible audited accounts at year end.

Undoubtedly, this work helped the board run an efficient and profitable business.
Being honest, what began to really frustrate me as a director was the growing administrative burden in the areas of compliance and HR regulation. Sometimes, it almost felt you were trying run a business with one arm tied behind your back.

I therefore welcome the news that the upcoming budget may try to address SME concerns related to maternity leave, employees' rights to take leave for training, and flexible working hours for employees with children up to the age of seventeen; legislation that has made the lives of business owners much more onerous. There's got to be a better balance!

In other words, I'm all in favour of cutting red tape to help SMEs - but please, let's cut the right kind of red tape !!!

The initial success of a new SME lending service aimed at bypassing traditional banks may be getting the major clearers into a flat spin.

Since its launch in August, FundingCircle.com has attracted over 1600 private lenders who have so far lent over 1 million pounds to small businesses.

The service offers lenders (investors) a return of around 8%. For the small business borrower, this is a far cheaper interest repayment rate than the typical bank loan on offer with interest rates up at around 12%. With innovative financial services like Funding Circle competing directly with banks in the small business finance space, the banks are going to have to keep an eagle eye on market developments.

FundingCircle.com may attract copycat services if its success continues, spelling out more danger for the banks in the future.

The major clearers may have been reluctant to lend to even creditworthy business concerns during the crisis, but coming out the other side of the downturn, they might not find they are operating in the same cosy world when they do return in earnest to the lending game.

Alternative sources of finance have sprung up while they've been playing hard to get. Some may say they deserve what they get!

Yes, i admit it! I made a mistake in my Risky Business blog on the 6th September......but it was only a little mistake, honest! I predicted that the credit agency employed by the British Bankers Association to look into whether the 6 major banks had or had not lent to "viable" businesses during the recession would report that bank lending decisions were generally completely justified.
Findings from the credit agency research, according to Angela Knight of the BBA, reveal that around 7,000 companies may have missed out on loans they should/could have had approved during the economic downturn.
Given that the business population in the UK is around 5 million, I reckon that Angela Knight is putting her hands up and saying sorry, the banks refused to approve loans to around 0.15% of the business population that was viable and shouldn't have been refused access to finance; an admission that a mistake was made...... but only a little one!...
I'm not sure who believes in these results, but I like the BBA's spin on this; i.e. own up to something wrong as it makes you look honest, but then minimise the wrong doing so it looks like it didn't matter much. I call this the old Bill Clinton trick......you know, the " i did smoke marijuana once......but i never inhaled".
My view is that if it was only 0.15% of the business population that was wrongly refused access to finance during the recession, no one (except of course for the businesses involved) would have noticed the problem. The truth is that anecdotal evidence up and down the country points to a much bigger problem with regard to bank lending.
Banks were probably absolutely right to reject many loan applications during the recession because the risks were too high, but I guess no one will ever know how many loans were refused for no good reason at all.