Crowdmix Ltd in Administration

London based start-up Crowdmix Ltd was in the process of developing a social media music platform. But before it could even launch its product fully, it ran out of money despite having previously raised £14 million in funding.

As of Monday 11 July, 2016, it has left its creditors, many of them freelance contractors, tens if not hundreds of thousands of pounds out of pocket. If you’re owed money by Crowdmix the prognosis for recovery is not good, so let’s look at what happens next.

The state of late payment in the UK

British businesses are facing a unique set of circumstances right now - the global economy is emerging from the deepest recession in living memory, domestic trade is uncertain with the EU Referendum looming, and there are issues of legislation from the National Living Wage to auto-enrolment pensions that are affecting company finances on a national scale too.

With all of this in mind, what are the implications for businesses of all sizes when it comes to getting paid for the work they do?

The Right and Wrong Way to Check Credit

We recently wrote about a large fraud case involving at least six connected companies. Each of these companies used false accounts, identity theft and fake documents to achieve large amounts of credit. When the goods arrived, they immediately vanished, but they were never paid for. The suppliers were left out of pocket, and the fraudsters disappeared with the proceeds.

Clearly, this was a very large and highly organised fraud, and 6 companies known to be involved have been liquidated. This kind of operation is unusual, but increasing in prevalence and we suspect it will only get worse as more criminals start to hear about it.

Fraudulent Companies Caught Gaming the System and Faking Their Credit Reports

The Insolvency Service has just completed an investigation into a network of fraudulent companies in the UK. The implications of this investigation should act as a cautionary tale for anyone that offers credit to their customers.

In this case, scammers used fake financial accounts to acquire goods on credit with suppliers, using fake details and false documents to elevate credit limits artificially. As the scam progressed, these companies acquired goods they had no intention of paying for and unwary suppliers continued to offer credit, because all of the companies looked profitable on paper.

'Shock' as one of Lancashire's oldest agricultural firms enters administration

News that one of the oldest agricultural firms in Lancashire has entered administration has been met with shock and dismay. Riley Brothers International Haulage Ltd, the most recent iteration of a company with a history stretching back more than a century, entered administration on the 18th of December 2015 with the loss of more than 130 jobs.

Four reasons you should ask your new client for a deposit

When you sign up a new customer or client, it’s tempting to skip the formalities. New customers are always keen and it seems like nothing can go wrong. The last thing you want to do is sour the relationship, or risk losing a client to a competitor. If you ask for a deposit, are you at risk of scaring them away?

In truth, most businesses are used to paying deposits especially if they are dealing with freelancers or micro businesses, and there are plenty of good reasons that you should ask for one.

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